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

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