DFS-Barclaycard Form Alliance - Analyst Blog

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Diners Club International - a unit of Discover Financial Services ( DFS ) - announced an agreement with Barclaycard Global Payment Acceptance. As per the agreement, merchants who use Barclaycard's payment acquiring services will accept all Discover and Diners Club cards.

Additionally, the cards of Discover Financial's network partners will also be accepted by these merchants. This will significantly increase Discover Financial's merchant locations as Barclaycard has a network of over 89,000 merchants.

The Discover and Diners Club network will be added to Barclaycard's payments processing services portfolio as a standard offering from 2015. Barclaycard is one of the largest payment processing companies in Europe.

The agreement is expected to be mutually beneficial for the companies. While Discover Financial's cardholders will have the benefit of increased merchant acceptance, particularly in UK, the deal should boost the transaction volume of Barclaycard once Discover Financial's cardholders start using its services.

Discover Financial is trying to grow its business through alliances. Last month, the company expanded its business alliance with Japan Credit Bureau (JCB). The expanded relationship will allow the U.S. ATM acquirers to route all JCB transactions over PULSE - Discover Financial's ATM, debit and electronic funds transfer network.

Additionally, Discover Financial has announced affiliations with Birmingham-based Cadence Bank and Nigeria-based Interswitch Limited this year to boost card acceptances and transaction volume. Apart from that, the company launched Discover Cashback CheckingSM - a checking account offering cash back rewards - and Discover It - a new credit card that charges no annual fee, over-limit fee, pay-by-phone fee, foreign transaction fee or any fee on the first late payment - to expand its market presence.

Discover Financial currently carries a Zacks Rank #2 (Buy). Other stocks in the financial sector that are worth a look are Regional Management Corp. ( RM ) - a Zacks Rank #1 (Strong Buy), Credit Acceptance Corp. ( CACC ) - a Zacks Rank #2 (Buy) and Visa Inc. ( V ) - Zacks Rank #2 (Buy).



CREDIT ACCEPT (CACC): Free Stock Analysis Report

DISCOVER FIN SV (DFS): Free Stock Analysis Report

REGIONAL MANAGE (RM): Free Stock Analysis Report

VISA INC-A (V): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: CACC , DFS , RM , V

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