Seattle-based Amazon also said it has obtained a warrant to purchase up to 4.4 million shares of NextCard stock, a stake of approximately 9.9 percent.
The agreement with NextCard comes a day after Amazon announced major plans for expansion. Yesterday, the Internet merchant said it is opening four new stores--home improvement, software, video games, and gift ideas. Also, as part of its expansion efforts, the company said it bought Tool Crib of the North, a catalog company that offers tools and other equipment.
Under the agreement with NextCard, whose claim to fame is that it created the first Internet Visa credit card, the two companies said NextCard will be the sole provider of the new cobranded credit card. The receivables generated from the Visa or MasterCard accounts as well as the cobranded cardholder relationships will be assets of NextBank, a subsidiary of NextCard, the companies said.
Amazon said its more than 13 million customers will receive exclusive NextCard privileges, including instant online approval, a choice of customized offers, personalized credit card designs, a security service for the card, and other online customer services, such as account alerts, electronic statements, and bill payment.
The five-year pact will begin in early 2000, the two companies said.