With the objective of tapping the booming credit card market in China, Diners Club International Ltd., an operating unit of Discover Financial Services (DFS - Free Report) , has joined Industrial and Commercial Bank of China (“ICBC”) to introduce a Diners Club International franchise in the Asia-Pacific region. ICBC is one of the largest commercial banks in China catering to a large section of the Chinese population.
ICBC will function as a franchise of Discover Financial in China and will be responsible for issuing and acquiring on behalf of the brand. It is expected that this will significantly increase the market presence of the Diners Club brand.
Since the takeover of Diners Club in 2008, Discover Financial has been on an aggressive acquisition spree, partnering with various institutions to increase the popularity of Discover and Diners Club cards across the globe. The company entered into a franchise agreement with Diners Club Ecuador in March 2012. Discover Financial has also penned agreements with Banco Popular de Puerto Rico commercial bank and WorldPay.
Visa Inc. (V - Free Report) and Mastercard Incorporated (MA - Free Report) , two of the company’s closest competitors, are equally proactive on expanding their services inorganically. Visa entered into an agreement with disbursement and bulk payment solutions provider Obopay Disbursements to pay out electronic funds to a prepaid card. Soon after, the company joined Air Canada to facilitate its Canadian customers with Visa debit card to purchase Air Canada tickets using their debit cards.
Mastercard also joined forces with Rearden Commerce, provider of various business and customer solutions, to offer a brand new personalized website by deploying the latter’s Deem commerce platform. The newly launched website, dubbed “MasterCard Business Network” will enable the smooth facilitation of operations by small and medium-sized businesses as well as aid them to streamline their expenses.
Discover Financial currently retains a Zacks #2 Rank, which translates into a short-term Buy rating.