Discover Financial (DFS) to Forge Alliance With Buy It Mobility
Discover Financial Services DFS has plans to tie up with the fintech firm Buy It Mobility Networks Inc. ("BIM") to introduce the cardless payments method for US merchants, per reports. Buy It Mobility Network’s technology allows customers to make payments directly from their checking accounts with merchants’ applications. This technique is highly popular in Asia.
Per Nilson Report, 11.8 million U.S. merchant points used Discover Financial’s network in 2020. According to reports, U.S. banks earn much higher fees on card purchases. Merchants generally have to pay lower fees on transactions that travel over the Automated Clearing House or ACH, giving them the opportunity to cut prices for shoppers who make this choice. Some of the companies that leverage the BIM technology at checkout include Phillips 66 and Shell.
The financial transactions provider recorded only 2% of card transactions on major U.S. networks in 2020, much lower than the industry biggies like Visa Inc. V, which accounted for 65% of the card transactions.
This is not the first time that Discover Financial took such an initiative. DFS constantly forges strategic alliances to expand its global reach and boost its portfolio. DFS works continuously on integrating choices on a wider scale for its customers to enrich their experience.
With this partnership, consumers will be able to pay retailers directly from their bank accounts. This would increase everyday transactions for checking accounts. This will eventually establish a solid relationship between customers and banks.
In January 2021, Discover Financial inked a deal with The National Bank of Serbia to boost global acceptance for the Discover Global Network cardholders in Serbia. With this tie-up, Discover, Diners Club International, PULSE and Network Alliance cardholders can now use their cards on the DinaCard payment network.
The network consisting of Point-of-Sale (POS), e-commerce platforms and ATMs in the region solidifies the presence of DFS.
Last October, Discover Financial struck a deal with Splitit so that members of the Discover card network can enjoy the buy now pay later option.
Shares of this currently Zacks Rank #3 (Hold) financial player have gained 39% in a year’s time, outperforming its industry’s growth of 23%. Other factors, such as the direct banking business, global expansions and a strong balance sheet remain its long-term drivers. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Stocks to Consider
Some better-ranked stocks in the same space are SLM Corporation SLM and WEX Inc. WEX, both holding a Zacks Rank #2 (Buy) at present.
Earnings of SLM and WEX managed to deliver a trailing four-quarter surprise of 34.4% and 9.9%, respectively, on average.
While shares of SLM have gained 35.1% in a year’s time, the same for WEX has shed 22.1%.
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Visa Inc. (V) : Free Stock Analysis Report
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