Following its success building broad acceptance in theU.S., Discover Network is building out its global acceptance through a threepart strategic approach.
According to Gerry Wagner, VP ofGlobal Acceptance at Discover Network, the most important questions to ask whenfiguring out which regions to target are, “where do our cardholders travel toand where do they spend?”
Targetingthese areas takes one of three approaches: white-labeling the Discover Network(such as the partnership with China’s UnionPay),acceptance deals with local acquirers, and franchising the network through Diners Club International.
It’sthis three-pronged approach that has resulted in a 68 percent increase inDiscover Network’s payment volume since 2007 and over 30 million acceptancelocations around the world.
While Discover Network is perhaps best recognized forleveraging its relationship with China UnionPay, its current efforts extendbeyond this key relationship.
Intotal, Discover Network has signed around 75 different acceptance agreementsfor the year, according to Wagner. “Some are with merchants specifically, and amarketing program around acceptance, and 33 were with new partners,” he said.
There’smuch talk about China, and Discover Network has seen “explosive growth” therethanks to a network-to-network agreement with China’s UnionPay.
“We’vegot wider acceptance there than Visa and MasterCard and we are the largestacceptance network in Asia. UnionPay looks at Visa and MasterCard as directcompetitors; with us they found a partner [thanks to the white-labelsolution].”
Overtime, building cardholder awareness of the expanding acceptance profile is alsokey, and can lag actual installed capabilities.
Overview by Ken Paterson, VP of Research Operations for Mercator Advisory Group
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