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Discover’s Network of Networks Strategy Makes it More Global and Much Bigger Than It Appears

Before taking off on any international trip, most of us face the biggest anxiety of paying and transacting in a foreign country. Over the last decade, banks and networks have dramatically increased their fees for overseas transactions. On the other hand, some credit cards come with perks and benefits to allow a convenient trip, while some others could stick you with a bunch of unnecessary hidden fees. Now imagine an international trip from the US to China, India and the UK, where you can make purchases through your credit cards without paying any foreign transaction fees. This could be the reality if you use your Discover card.

When Discover entered the credit card business in 1985, its current competitors were already entrenched. So it had to innovate with unique differentiators such as no annual fee, 24/7 customer service, and its Cashback Bonus program. Discover entered the credit card business in 1985, its current competitors were already entrenched. So it had to innovate with unique differentiators such as no annual fee, 24/7 customer service, and its Cashback Bonus program.

Today, Discover has millions of loyal cardmembers throughout North America, with more than 5,000 new merchants start accepting Discover each day. There are over 30 issuers of Discover cards, with 1.6M ATMs worldwide and the numbers continue to grow. The network volume for the company was $322 billion, including $116 billion of Discover card volume.

One of the major differentiators for Discover is that it is both the network provider and the issuer. On the other hand, its competitors, Visa and MasterCard are associated with hundreds of member banks around the globe that issue their own versions of these cards. Mostly, there are two fees associated with these cards:

- Issuer fee: The issuers charge cardholders interest on their purchases and cash transactions. Some issuers also charge its users an annual fee just for the privilege of carrying their card. Apart from that, they also charge other potential fees—for cash advances, late payment, etc.

- Association (Network) fee: Companies like Visa and MasterCard also make money by charging the banks who issue their cards an association fee—that is, a fee to be associated with them.

Another differentiator for Discover is being innovative, a theme that runs through all its products and services. Just as Discover card had innovated earlier in its history and continues to do so today, the Discover Global Network took to innovating through its fees, as the combined fee applicable is generally lower compared to other networks as it is both the issuer and network.

Discover Global Acceptance

The Discover Global Network is the third largest payments network in the world, and is continuing to expand its global footprint by partnering with regional card networks as well as relying upon its Diners Club franchises. These strategic alliances increase the Discover acceptance footprint, while delivering value and volume to merchants and partners without charging any foreign transaction fees.

Below is a list of some countries and local/regional card networks that have entered into strategic partnerships with Discover.

Asia

Country: India

Strategic Partner: NPCI

Discover Financial Services has entered into a strategic alliance with the RuPay, a national payment network in India, established by National Payments Corporation of India. This will allow cardholders to use Discover and Diners Club International cards at ATMs and point-of-sale terminals across the country. POS and ATM transactions by RuPay network cardholders within India will be processed on the RuPay network. Outside India, RuPay Global Cards issued on the Discover platform will also be processed on the Discover Global Network. This will provide international access to RuPay cardholders following the tie-up with Discover Financial Services.

Country: China

Strategic Partner: UnionPay

More than 10 years ago, Discover Financial Services and China’s UnionPay entered into an agreement to allow their cardholders access to each other’s payment networks. In China, foreign card acceptance is quite low. China UnionPay provides Discover access to all ATMs and electronic payment merchants in Mainland China. China UnionPay has surpassed 3.5 billion cards and provides Discover with acceptance at over 4.8 million merchants and 415,000 ATMs in Mainland China.

Country: Japan

Strategic Partner: JCB

In Japan, Discover Financial Services has an agreement with the JCB Brand. JCB expands Discover acceptance to more than 1 million Japanese merchants and ATMs.

Country: South Korea

Strategic Partner: BC Card

In 2011, Discover Financial Services implemented an agreement with BC Card, the leading Korean payment network, which allows BC Card cardholders to utilize the Discover, Diners Club International and PULSE networks for international purchases and cash access outside Korea.

Country: Vietnam

Strategic Partner: Banknetvn

Discover Financial Services entered into a strategic alliance with Banknetvn, (formerly Smartlink Card, JSC,) a leading domestic payments network in Vietnam. Through this alliance, Discover and Diners Club International (DCI) cardholders get the ability to use their cards at more than 16,000 ATMs in Vietnam via a network of local commercial banks.

Country: UAE

Strategic Partner: Network International

In 2013, Discover Financial Services signed an agreement with Network International, a leading payment solutions provider in the Middle East, announcing that Discover cards will be accepted at all Network International point of sale (POS) merchants across the UAE.

Europe

Country: Serbia

Strategic Partner: DinaCard

Discover Financial Services announced a debit issuing program with DinaCard, Founded in 2003, DinaCard is the system of national payment cards operated by the National Payment Card Center, a division of the National Bank of Serbia, Serbia’s central bank. It is the largest acquiring network in the country. Through this agreement, more than 2.5 million customers of DinaCard are able to pay and withdraw cash globally.

Country: UK

Strategic Partner: Link

In 2011, Discover Financial Services announced an agreement with LINK, the leading ATM network in the UK, which provides ubiquitous cash access across the UK for Discover, Diners Club and Global Card cardholders. Discover card can be used to obtain cash advances at over 59,000 LiNK ATMs located throughout England, Scotland and Northern Ireland. Only a PIN is required to obtain a cash advance from an ATM.

Africa

Country: Nigeria

Strategic Partner: Verve

In 2013, Discover Financial Services and payment processing service provider Nigerian Interswitch Ltd. Partnered. Through strategic alliance, Verve Global cardholders will have access to Discover Global Network for international purchases and easy access outside of Nigeria. Similarly Discover, Diners Club, and Global cardholders will have access to purchases and cash accounts in Nigeria through Verve network.

South America

Country: Brazil

Strategic Partner: Elo

In August 2015, Elo, the Brazilian credit card brand, signed an agreement with Discover Financial Services to allow Elo cardholders to make international purchases and withdraw cash on the Discover Global Network.

North America

Country: Puerto Rico

Strategic Partner: Banco Popular de Puerto Rico

Discover Financial Services and Banco Popular de Puerto Rico (BPPR), Puerto Rico’s largest commercial bank, announced an agreement in 2011 to expand Discover card acceptance in Puerto Rico. The deal provides Banco Popular de Puerto Rico merchant customers access to the Discover and Diners Club International networks.

Country: Canada

Strategic Partner: Interac

In 2009, Discover Financial Services announced an agreement with INTERAC, Canada’s national debit card service. The agreement provides Diners Club, Discover, and PULSE cardholders the ability to withdraw money from ABMs of participating Acquirers in Canada.

Strategic Partner: Diners Club International

Diners Club International is owned by Discover Financial Services (NYSE:DFS), a direct banking and payment services company with one of the most recognized brands in U.S. financial services. Established in 1950, Diners Club International became the first multi-purpose charge card in the world, launching a financial revolution in how consumers and companies pay for products and services. Today, Diners Club is a globally-recognized brand serving the payment needs of select and affluent consumers, offering access to more than 600 airport lounges worldwide, and providing corporations and small business owners with a complete array of expense management solutions. With acceptance in more than 185 countries and territories, millions of merchant locations and access to more than 1 million cash access locations and ATMs, Diners Club, as a strategic partner of the Discover Global Network, is uniquely qualified to serve its cardmembers all over the world. For more information, visit.

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