Discover Card announced on September 4th that they have partnered with Russian Standard Bank (RSB) and will start issuing their cards in Europe. Discover card was first introduced 1985 by Sears, and in 2006 they introduced the Discover debit card under the Pulse payment system which Discover acquired in 2005.
The Russian Standard Bank is the largest credit card issuer in Russia and their partnership with Discover could prove to be one of the biggest announcements in the credit card industry to date. Discover is already being offered in China and India, both who recently extended their service agreement with the card giant. In this new deal, Russian Standard Bank will promote and issue Discover cards and in return Discover will add to Russian Standard Bank’s portfolio to increase sales and customer-base.
When asked what Discover Card hopes to accomplish by expanding their portfolio in the European market in a recent interview, Discover spokesperson said:
“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.”
The day after the news, Discover’s stock rose two cents, closing at $38.75 at the end of the day. Discovers stock is now at $39.41 with the close of the business week on Friday. The deal has also made Russian Standard Bank the exclusive partner for issuance, acceptance and promotion of Discover cards in Russia. This could be a good or bad thing, while it does introduce Discover to the European market, it also prohibits the card being offered from any other card issuing bank in Russia for the time being.
Dmitry Levin, the CEO of Russian Standard Bank goes onto say in a press release from Discover:
“This partnership will allow Russian Standard Bank to enrich its portfolio of card brands and introduce the technical and service know-how of Discover, an expert of credit cards and loyalty programs in the U.S. The brand history of Discover is a story of great success which the company has achieved in just a few decades in the highly competitive market of financial services in the U.S. I am confident that the Discover card from Russian Standard Bank will become very popular amongst Russian consumers, too.”