Direct banking and payment services company,
Discover Financial Services
), has entered into a strategic alliance with Smartlink Card
Service JSC. Vietnam-based Smartlink is a well known domestic
payments network in that country.
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Pursuant to the agreement, cardholders of two out of three
operating networks of Discover Financial namely The Discover
Network and Diners Club International (DCI) will be able to
access more than 16,000 ATMs in Vietnam. A network of local
commercial banks will support this cardholder benefit.
As consumers will be able to use their cards at more cash access
points, this partnership should help Discover Financial attract
the technology-friendly crowd toward its products, thereby
boosting Discover Financial's client base. This should boost the
transaction volume of Discover Financial on the international
domestic payment network, and consequently revenues of both the
direct banking and payments services segments of the company.
Smartlink processes transactions connected to 51 banks and
financial institutions, and supports 55 million local debit cards
in the Vietnamese market. Discover Financial aims to utilize
Smartlink's network to promote card-payment market development in
Vietnam and allow Vietnamese banks to use Discover's payment
The aforementioned transaction fits in with Discover Financial's
global expansion strategy of supporting growth of local leading
international networks. Vietnam, being an emerging economy,
provides payment processors with immense growth opportunities in
the card-payment market. Discover Financial's presence in Vietnam
will allow it to tap this opportunity and increase its global
Discover Financial is working hard to establish a foothold in the
international card market to enhance its global client base. The
company added significant international networks to its existing
Discover network since the acquisition of the Diners Club in
2008. The Aug 2013 Paydiant agreement and the May 2013 initiative
with Ariba aimed at transforming B2B payments by eliminating
paper transactions were undertaken with the same objective. These
alliances should bolster the global client base of the company as
these networks combine the world's leading web-based trading
communities with industry-leading cloud-based applications.
Discover Financial currently carries a Zacks Rank #2 (Buy). Other
financial services companies like
Encore Capital Group, Inc.
The Hartford Financial Services Group, Inc.
First Cash Financial Services Inc.
) with the same Zacks Rank #2 are also worth considering.