PULSE, a unit of
Discover Financial Services
), has announced an extension of its network provider agreement
with Motorola Employees Credit Union ("MECU"). Per the new
agreement, MECU's 39,000 members will be able to use PULSE's PIN
debit network for monetary transactions.
The new agreement entitles members the access to PULSE's
point-of-sale terminals at various retail locations as well as its
380,000 ATMs in the U.S. The agreement is an extension of PULSE and
MECU's long-standing business arrangement. PULSE has been providing
its services to MECU's members since 2007.
The extension of the agreement reflects PULSE's ability to
satisfy its customers through its exemplary services. The company
was able to enhance the debit economics of MECU through its
efficiency. This was reflected in MECU's comprehensive analysis of
its debit program transaction history.
The review, conducted with the assistance of the Illinois Credit
Union League Service Corporation, revealed that MECU's debit
economics improved whenever it used PULSE network for its debit
transactions. PULSE provides a safe and efficient network for
transactions to the credit union, which has 10 branches across five
Apart from the debit network, the agreement also provides MECU
with access to the PULSE Debit Dashboard and DebitProtect. PULSE
Debit Dashboard is an Internet-based tool that provides data
related to a debit program if a client wants to analyze it, while
DebitProtect is a fraud detection service.
PULSE is a part of Discover's Payment Services segment, which
witnessed a 10% growth in its pre-tax income and a $10 million
surge in revenues in the second quarter of 2012, primarily due to
an increase in point-of-sale transactions on the PULSE network. We
expect the strong operating performance of PULSE to continue in the
future as well, based on its ability to retain existing customers
while continuing to acquire new ones.
Discover, which competes with
), carries a Zacks #2 Rank, which translates into a short-term Buy
rating. We maintain a long-term Outperform recommendation on its
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