Discover Luring Banks with Lower Fees
Visa and MasterCard have had a stronghold for quite some time on supplying banks with credit and debit cards. But Discover is making efforts to change that.
Discover Financial Services has been in negotiation with several banks recently trying to get them to convert to their services instead of Visa or MasterCard. It has succeeded with a few banks in Illinois, but Discover plans to expand well beyond that state in the coming months.
The main reason that banks are considering the transfer is because Discover promises lower fees. The company also gives banks a chance to use their names on the cards without the Discover logo. With Visa and MasterCard, the bank has to showcase the Visa or MasterCard logo in addition to the bank’s name on the front of the card.
Discover has been in a catch-up phase for a while now because many merchants initially did not accept its card. Now, close to 95% of the businesses that accept Visa and MasterCard also accept Discover at their registers.
“Change is sometimes difficult for financial institutions, so it’s up to us to tell a convincing story,” said Steve Sievert from Discover’s payment network.
Discover now has a much better story to tell.