Discover made arguably the biggest splash in the payments world last week, announcing an extension of their partnership with Russian Standard Bank and agreeing to issue Discover cards in Europe for the first time.
The impact the deal will have on both parties, and the credit card industry in Russia, is obvious. Discover is the fourth-largest payments company in the U.S., while RSB is Russia’s largest credit card issuer.
But what started Discover down the path towards a relationship with RSB? After deals to extend service in China, India and now Russia, among other countries, where does Discover see it’s global issuing policy headed in the future?
Discover filled PYMNTS.com in on the deal from the company’s point of view, as well as Discover’s burgeoning global strategy. They pointed out that Discover and RSB have a relationship dating back to June 2011, when the two financial powers partnered for Diners Club International card services. Also cited was the DCI card initiative, which Discover acquired in 2008, as a significant benchmark in Discover’s global strategy.
To see our full Q-and-A with Discover, read below.
PYMNTS.com: Your partnership with RSB represents the first time Discover cards will be issued in Europe – what does this mean for Discover?
Discover: This announcement signifies the company’s continued commitment to becoming a global brand.
PYMNTS.com: Discover’s been expanding its global footprint lately with moves to China, India, Ecuador and now Russia. Describe what you hope to accomplish by expanding to Europe, Latin America and Asia.
Discover: One of Discover’s strategic priorities is to expand its global footprint, which it did in 2008 with the acquisition of Diners Club International and then with other subsequent network-to-network deals. To-date, our efforts have focused mainly on global merchant acquiring for the benefit of US Discover cardmembers and International Diners Club cardmembers. For Discover, there is a significant branding and recognition benefit to issuing Discover cards overseas. The countries that issue Discover also receive the benefit of launching a brand that has a proven track record of success in cash rewards, service and value in the U.S.
PYMNTS.com: Discover and RSB partnered for Diners Club International Cards last year – was there anything about that program that led you to believe your new partnership with RSB would be a success?
Discover: Correct, our partnership with RSB is a relatively new one, having joined forces with them in June 2011. We chose to work with RSB to help us meet our aggressive growth goals in Russia because they have strong credit card expertise, a history of innovation and a large-scale retail network. Working with them to issue Discover cards in that region is a natural next step.
PYMNTS.com: Explain to us some of the details of the partnership. Exactly what services will Discover be providing to RSB, and vice-versa?
Discover: We have extended our existing partnership with RSB to allow them to become the exclusive partner for issuance, acceptance and promotion of Discover cards in Russia. This is the first time that Discover cards will be issued in Europe.
PYMNTS.com: Will there be further expansions in the future? Give us a sense of what direction Discover is headed in in terms of the global market.
Discover: Discover is actively engaged in many conversations to expand its footprint overseas. Working with Diners Club franchises to issue Discover cards is clearly an important and natural part of the conversation.