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Discover Financial, Paypal Aid Customers to Redeem Rewards

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Discover Financial Services (DFS - Free Report) has entered into an agreement with PayPal Holdings, Inc. (PYPL - Free Report) , which would enable its customers to use their credit card's Cashback Bonus or Miles for making purchases through PayPal. Cardmembers are required to link their Discover Card with respective PayPal accounts for payment activation via rewards. They can also enroll for the same by creating a PayPal account through their Discover account.

Cardmembers would gain traction from this feasible option to reward themselves. They would be able to enjoy more and better payment options now. Eligible Discover cardmembers can buy with their Cashback Bonus or Miles using PayPal while indulging in online shopping or via applications. Once they link their card with PayPal, they can redeem rewards on eligible transactions at checkout. They can avail of this facility at millions of merchants online.

This feature is an extension of a current partnership between both companies to offer Discover Financial cardmembers a wide array of benefits and experiences with PayPal.

Next year, the company will provide cardmembers with another benefit to help them earn rewards through their partnership with PayPal. This alliance will allow Discover Financial card owners to get 5% cash back on purchases worth up to $1,500 when they shop through PayPal and at restaurants if activated.

The company also recently tied up with the Zelle network for person-to-person (P2P) money transfers. This would permit Discover checking, savings and money market account customers to send and receive funds seamlessly with almost any bank account in the United States. This apart, the company has been constantly making concentrated efforts to strengthen its presence. We expect such initiatives to bode well in the long run.

Shares of this Zacks Rank #3 (Hold) company have gained 19.5% in a year’s time, outperforming its industry’s growth of 12.3%.

Stocks to Consider

Investors interested in the same space might consider some better-ranked stocks like Fiserv, Inc. (FISV - Free Report) and Cardtronics PLC (CATM - Free Report) . You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Fiserv and units provide financial services technology worldwide. It carries a Zacks Rank #2 (Buy) and managed to pull off average four-quarter positive surprise of 0.9%.

Cardtronics offers automated consumer financial services through its network of automated teller machines and multi-purpose financial services kiosks. The company came up with average four-quarter beat of 28.8% and flaunts a Zacks Rank of 1.

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