Discover Financial Services
) announced a partnership with
) PayPal under which the latter's customers will have access to
Discover's merchant network. According to Reuters, PayPal will
issue payment cards to its users in the U.S. in 2013, giving them
access to Discover's 7 million retail locations. Further, the
service is expected to be available at international merchant
locations of Discover soon.
The alliance is expected to boost Discover's transaction volume
and consequently, the revenues of the payment services segment,
since PayPal has a large customer base. It will give Discover's
customer alternative payment option at all point-of-sale
Moreover, it will not increase Discover's merchants' expenses as
they need not use any new hardware or software for the arrangement.
Further, PayPal's 50 million American customers will be assured of
the prompt and secure transactions that they are used to, while
having access to wider payment options.
Discover constantly strives to provide flexible and convenient
payment options to cardholders in order to boost its card
acceptances and enhance its competitive strength against bigger
card giants, such as
). Earlier this month, the company announced that it has entered
into a partnership with
The alliance with Google will enable Discover cardholders to
access their credit card using a compatible smartphone by means of
Google Wallet. The partnership is going to be beneficial for
Discover by helping it attract the technology-friendly younger
crowd towards its products.
Back in February of this year, Discover's subsidiary, PULSE,
signed an agreement with Obopay Inc., which allowed the company's
debit card customers to transfer their money instantly through
mobile phones using Obopay's 'Mobile Money for Banks and Credit
Discover currently carries a Zacks #2 Rank, which translates
into a short-term Buy rating. We maintain a long-term 'Outperform'
recommendation on the stock.
DISCOVER FIN SV (DFS): Free Stock Analysis
EBAY INC (EBAY): Free Stock Analysis Report
GOOGLE INC-CL A (GOOG): Free Stock Analysis
MASTERCARD INC (MA): Free Stock Analysis Report
VISA INC-A (V): Free Stock Analysis Report
To read this article on Zacks.com click here.