A co-branded card is issued by a merchant in conjunction with a credit card company or network and can be used to purchase products or services from that merchant. Co-branded credit cards are issued by a bank in conjunction with a specific retailer and can be used at both establishments and anywhere else that accepts cards from the issuing bank's network.
Co-branded cards: a definition.
Co-branded card connections can boost a retailer's bottom line by luring clients who wouldn't otherwise apply for a shop credit card. Nonprofits and other types of groups use them as well.
In the case of a co-branded credit card, two different entities are the card's sponsors. One is typically a store or transportation company. This contrasts financial institutions or card networks like Visa, MasterCard, Discover, or American Express. Co-branded credit cards allow customers to shop at any store that accepts the issuing bank or card network while potentially earning discounts or rewards points on purchases made from the card's sponsoring business.
Pioneers In The Use Of Jointly Branded Cards 
When a store and a credit card company or network join forces to issue a credit card, the card is said to be "co-branded," meaning that it bears the logos of both sponsors. A co-branded credit card can be used wherever that accepts the issuing credit card brand. Co-branded cards first gained popularity among airlines. Along with their own branded cards, many establishments also accept co-branded credit cards from other brands.
Conceiving a Co-Branded Card: The Necessary Steps
You can use a co-branded card like any other credit card to buy anything online or in-store. However, the cards have pictures on them and frequently offer cash back or discounts on specific types of items for specific activities.
Numerous models exist for the organization of co-branded card partnerships. A company (such as a department store, gas station, or airline) or another entity (like a sports team or a university) must work with a bank to issue a co-branded credit card. In many cases, this will be the same bank or financial institution that already processes the store's credit and debit card transactions. Through this arrangement, the acquiring bank's network processor can handle all the processing for co-branded card transactions.
How a Bank That Acquires Merchandise from Merchants
The merchant-acquiring bank collaborates with the store to handle all card transactions. The co-branded card relationship through the acquiring bank helps streamline the transaction process for branded purchases involving only the bank and the store. The third-party card issuer and the co-branded processor will be involved if the merchant uses a third party to issue credit cards. Any reward points a consumer earns at a store can be checked at any time through the card-issuing institution's dashboard.
Card Branding Examples
Co-branded cards first appeared in the 1980s, when airlines started partnering with banks and card issuers to offer mileage reward credit cards. Despite the widespread use of other payment methods, credit and debit cards like those issued by American Airlines (issued by Barclay Bank), United Airlines (issued by Chase Bank), and Delta Air Lines (issued by American Express) continue to enjoy widespread popularity. The hotel industry quickly followed. According to Packaged Facts' report Co-Branded and Affinity Cards in the U.S., 7th Edition, 38% of all co-branded credit card programs are associated with the airline industry.
Card Programs That Allow Multiple Stores to Share a Brand
Online and digital retailers account for the largest share of the co-branded card industry. Some stores have many co-branding partnerships. For instance, Amazon (AMZN) offers two different credit card options: an Amazon Rewards Visa Signature card and an Amazon Business American Express card. They're in addition to the company's own Amazon.com gift card.
Discounts, shopping points, free delivery, early access to promotions, and other perks are all commonplace with co-branded cards. The primary distinction is that the open-loop credit card nature of the co-branded card allows for use outside the store itself. The Saks Credit Card can be used anywhere MasterCard is recognized.
If a store must stock both, why do they? 
A universal credit card can attract more cardholders and be more convenient for many shoppers, especially those trying to limit the number of credit cards they carry. Additionally, the co-branded cards might have more favourable terms (store cards carry notoriously high-interest rates). In addition to being a convenient payment method, the card promotes the store each time the user uses it.
