Recently, Discover Financial Services (DFS) announced a long-term agreement with Nigeria-based Interswitch Limited, whereby Discover and Diners Club International (DCI) cards will be accepted at all ATMs and point-of-sale (:POS) terminals supporting Interswitch’s network in Nigeria. Moreover, the holders of Verve cards will have access to the Discover global network – which comprises the Discover, DCI and PULSE networks along with Discover Financial’s partner networks – for international card transactions. Interswitch is the promoter of Verve.
The companies have planned a three-phase implementation of the agreement. In the initial phase, the Verve cardholders will gain access to the global ATM network of PULSE. Thereafter, the Discover and DCI cards will gain access to the Interswitch ATM and POS network. In the final phase, the Verve cardholders will gain access to the Discover global network, which has presence in over 185 countries and territories.
Additionally, Discover Financial and Interswitch will work together to integrate DFS’s DPAS EMV solutions and fraud monitoring solutions to enhance transaction security on both networks. They will also consider opportunities for further collaboration in the future.
The agreement is an important step in strengthening Discover Financial’s global payment network. The company is widening its network to provide wider options to individual and institutional clients. Apart from offering a global reach, the company strives to fulfill the localized preferences of clients by teaming up with regional payment networks, such as Interswitch, which is the largest integrated payment processing service provider in Nigeria.
Discover Financial is working hard to establish a foothold in the international card market through various alliances. The company now has a presence in China, Japan, Korea, Serbia and India, among others. Peers in the card business, such as Visa Inc. (V) and MasterCard Incorporated (MA) also regularly form alliances to expand their network presence in the competitive credit card market.
Discover Financial currently carries a Zacks Rank #3 (Hold). Another company worth considering in the financial sector is Encore Capital Group, Inc. (ECPG), which carries a Zacks Rank #2 (Buy).
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