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Discover Financial's Tie-Up to Boost Card Business in Mexico

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Discover Financial Services (DFS - Free Report) recently announced that it has collaborated with Promoción y Operación S.A. de C.V. (Prosa). Both the companies will form a strategic network alliance for widely strengthening the acceptance of Discover Global Network in Mexico. With this deal, Discover, Diners Club International, PULSE and network affiliate cards will be accepted on Prosa’s network in Mexico at all ATM kiosks as well as at point-of-sale locations.

Initially, the agreement would enable all Discover Global Network cards on the Prosa network. In fact, all Discover Financial customers would now get card options in Mexico, a key destination for cardholders.

Prosa — which processes more than 3.6 trillion transactions annually at point of sale, ATMs, mobile devices and online — will continue to boost growth for the payments industry in Mexico by dint of this deal with Discover Financial.

The Discover Global Network consists of Discover Network, Diners Club International, PULSE and affiliate networks. With above 42 million merchant acceptance locations and 2 million ATM cash access sites across 190 countries and territories, Discover Financial could successfully enable network to network links around the globe including China, Japan, Korea, India, Brazil, Turkey, Nigeria and all of Europe.

Mexico with its large underpenetrated markets, a solid financial infrastructure and highly scalable models seems the ideal hub of growth for financial transaction service players. For instance, one of the money transfer companiess — MoneyGram International Inc. — has tied up with OXXO convenience stores to help customers in Mexico receive funds sent to them from across the world.

Also, The Western Union Company (WU - Free Report) launched the Western Union mobile app with omni-channel choices, allowing customers in Mexico to transfer cash digitally to more than 200 countries and territories.

Shares of Discover Financial have rallied nearly 29.2% in a year’s time, outperforming its industry’s growth of 8.6%. The stock has a Zack Rank #3 (Hold).

Stock to Consider

Investors interested in the financial sector might take a look at the better-ranked stock of Cardtronics plc , which provides automated consumer financial services through its network of automated teller machines (ATMs) and multi-functional financial services kiosks. Sporting a Zacks Rank #1 (Strong Buy,) the company came up with an average four-quarter beat of 27.17%. You can see the complete list of today’s Zacks #1 Rank stocks here.

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