Discover Financial Services' (DFS) credit cards will be issued
in Europe for the first time under an existing deal the lender has
with Russian Standard Bank--Discover's latest effort to expand its
small international footprint.
Russian Standard Bank, the largest credit-card issuer in Russia,
will issue Discover cards to consumers there, the companies said
Tuesday, following an agreement struck last year allowing the bank
to issue and service Diners Club International cards. Diners Club
is owned by Discover.
Discover operates both a payments network that processes
transactions like Visa Inc. (V), MasterCard Inc. (MA) and American
Express Co. (AXP), and it competes against banks in the U.S. to
issue its own credit cards. As the smallest of the four payments
networks, it has been trying to expand its footprint in countries
like China, India and elsewhere through card-issuing partnerships
and processing deals.
In March, the Riverwoods, Ill.-based company announced the
expansion of its relationship with its Diners Club franchise in
Ecuador that resulted in the first international issuance of
Discover credit cards. Earlier this month, Discover signed a deal
with Industrial & Commercial Bank of China Ltd. (IDCBY),
China's largest bank by assets, to start a Diners Club franchise
there and issue Diners Club cards.
With the expansion, Discover hopes to generate more transaction
volume over its network. More than half of MasterCard's revenue is
generated outside the U.S., and Visa has been pushing to generate
more than half of its revenue from outside the U.S. by 2015.
Discover does not break out international revenue in its
regulatory filings.
Discover's shares closed up 0.1% at $38.75 on Tuesday and are up
more than 61% this year.
Write to Andrew R. Johnson at andrew.r.johnson@dowjones.com
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