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July
17, 2006
Discover,
First Data Deal Could Increase Acceptance of Discover Card
Discover Financial Services and First Data Corp. announced an
agreement Friday in which First Data will offer Discover Network
card acceptance as part of its services to small- and medium-sized
merchants. The agreement should lead to a more convenient acceptance
process for small businesses that use First Data's services,
which in turn could mean consumers will find more merchants
accepting Discover credit cards.
A
long-time competitive disadvantage for Discover has been that
it simply isn't accepted at as many locations as MasterCard
or Visa. (Differing estimates peg Discover's merchant acceptance
at about 65-75% of Visa and MasterCard's.) And many processors
such as First Data have offered merchants more of a "one
stop shop" in handling MasterCard and Visa transactions,
while Discover transactions have required additional payments
steps and paperwork. Agreements such as the one announced Friday
could enhance the perception that accepting Discover cards is
as easy as accepting the others.
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