Discover is the third card brand in the USA, a long way behind Visa and Mastercard, but very profitable nonetheless. Discover bought Diners Club International from Citbank in 2008 which gave it the basis of a global acceptance network.
Diners cards are still issued in various countries by franchise partners. Discover has continued to support the brand by investing in growing its international acceptance network through deals with merchant acquirers and payment gateways. This also gives Discover’s US cardholders the opportunity to use their card abroad. At the same time, the company has partnered with local card schemes so that their customers too can access this worldwide acceptance network. This is an alternative to co-badging domestic cards with Visa or Mastercard for use outside the home country.
More than 25 other networks, issuers and fintechs now run on Discover Global Network’s rails. Latest signings include Woori Card, “one of the largest issuers in South Korea” and US based TYDEI, a healthcare vendor management system.
Despite the years of investment, payment volumes remain quite modest. Volume from Discover’s network partners was $11.9bn in Q3, up 15% primarily reflecting higher volume at AribaPay. This is a tool that offers simple payments for invoices generated by SAP.
Meanwhile, Diners Club volume is growing rather faster “reflecting an improvement in global travel and entertainments spending.” This was $8.8bn, up 34% in Q3.
Payment volume on Discover’s own cards worldwide was $56.6bn, also up 15%.