What happened?
American Express
(NYSE:AXP) just lost another partnership. Fidelity announced that it is working with US Bancorp (NYSE:USB) and Visa (NYSE:V) as the new issuer and network for its 2% cash back card.

This marks the second partnership lost by American Express in the last 12 months. Last year, American Express announced that Costco (NASDAQ:COST) decided to end its 16-year partnership.

For what it is worth, Fidelity isn't as big of a deal as Costco. Bloomberg reported that Fidelity customers spent about $11 billion annually on their Fidelity cards, and that the portfolio currently includes only $1.6 billion of credit card loans, which US Bancorp is buying as part of the switch.

Does it matter?
Fidelity makes up about 1% of American Express's annual billed business of $1.02 trillion as of the end of 2014. Importantly, the loan book was never American Express's to begin with, thus the only loss is the loss of $11 billion of annual spending on its network. 

One of the reasons Costco was so important was because of its size. Costco card members made up 8% of global billed business and 20% of American Express's outstanding card member loans, on which American Express also earned interest income.

The Fidelity card fits in American Express's co-brand business, wherein the network typically agrees to issue cards on its network, and the retail brand -- an airline, department store, or investment company, in this case -- stands as the marquee name on the card.

American Express's 2014 annual report and letter to shareholders provides more context on the importance of co-branded deals for American Express. Importantly, as of year-end 2014, co-brand cards made up less than 30% of American Express purchase volume.

Put another way, however, losing 8% of transaction volume from Costco, and 1% from Fidelity, means that American Express has lost roughly one-third of its co-brand volume in the last 12 months. That's a difficult pill to swallow, serving as further evidence that rising competition for co-brand deals is shifting more of the economics away from the networks and to the issuing banks and retail brands.

Jordan Wathen has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Costco Wholesale and Visa. The Motley Fool recommends American Express. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.