The deal represents American Express' first card-issuing partnership in Canada. In addition, CIBC is now the first Canadian bank to offer both American Express and Visa credit cards to customers.

The new CIBC 'entourage' smart card is a credit card embedded with a smart-chip microprocessor that functions like a mini-computer, capable of carrying multiple applications. Initially, the smart-card technology will be used to enhance the security of purchases. Additional functions can be added over time such as applications for managing loyalty points programmes or conducting electronic banking activities, say the firms.

Cardmembers can use the CIBC entourage cards at American Express merchant locations around the globe, and take advantage of American Express’ global service through its 1700 travel service locations and more than 500,000 ATMs worldwide.

Christine Croucher, executive vice president, CIBC card products division, says: "CIBC’s alliance with American Express brings customers greater innovation, more choice, global assistance and the ability to make secure purchases over the Internet."

Under terms of the agreement, CIBC will issue the cards, own the accounts and handle the customer service support for the entourage American Express Cards, including authorisations, billing and credit management. CIBC will also be responsible for marketing the cards to existing and new customers in Canada. This will include television advertisements, direct mail, online media and various outdoor media.

CIBC is American Express' third network partner in North America, following Banco Popular and Banco Santander in Puerto Rico. The Canadian breakthrough follows the US government's October victory in an antitrust lawsuit brought against Visa and MasterCard, which claimed exclusionary rules preventing banks from issuing rival cards were anticompetitive.