Discover Financial Services DFS enters into a partnership with Saudi Payments that will enhance the global acceptance for both companies. This deal will enable Discover, Diners Club International, PULSE and network alliance cardholders to use their cards on the mada network.
Saudi Payments is a wholly owned unit of the Saudi Arabian Monetary Authority, founded to operate and develop all major national payment systems.
The expansion of footprint consists of Point-of-Sales (POS) on e-commerce platforms and at ATMs across the Kingdom. Further, this will boost international acceptance for all cardholders apart from additional payment options in the Saudi digital payment environment. It even enables Saudi banks to issue cards that will be accepted on the Discover Global Network for international purchases and cash access outside the Kingdom.
Rationale Behind the Deal
Discover Financial keeps collaborating with companies to provide global reach to its partners.
Notably, customers will be able to gain traction from higher payment options comprising more than 48 million outlets in 200 countries. Discover Global Network cardholders will be able to use more than 470,000 POS terminals at local merchants and above 18,000 ATM access points in Saudi Arabia.
This move is in line with Saudi Payment’s strategy to expand options in the Kingdom’s digital payment scenario. Per management, the action supports the Kingdom’s target of becoming 70% cashless by 2030.
Moreover, it is expected to make payment methods more convenient and faster.
The Discover Global Network consists of Discover Network, Diners Club International, PULSE and above 15 alliance partner networks worldwide. It has 44 million plus merchant acceptance locations and 2 million ATM cash access sites across the globe. The company has been constantly taking initiatives to extend its presence.
In February, the company's payments brand Discover Global Network reached an agreement with National Bank of Oman (NBO) to improve acceptance for Discover, Diners Club International and affiliate network cards. We expect all these endeavors to bode well for Discover Financial.
Shares of this currently Zacks Rank #3 (Hold) company have lost 37.5% in a year’s time, wider than its industry’s decline of 29.5%. You can see the complete list of today’s Zacks #1 Rank stocks here.
The price performance came against other stock movements in the same space, such as MR. COOPER GROUP INC COOP, Global Payments Inc. GPN and Fiserv, Inc. FISV, which have gained 52.5%, 2.6% and 3.5%, respectively, over the same time frame.
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