David W. Nelms, Chairman and CEO of Discover Financial Services, announced today that the Discover/NOVUS Network is open to financial institutions that want to issue on its network.
“We are prepared to welcome and serve financial institution partners of all sizes who can issue credit, debit, stored value and other payment types on our network,” said Nelms. He also announced that Discover is having advanced discussions with several financial institutions to issue cards on the Discover/NOVUS Network.
During a keynote speech today at the 16th Annual Card Forum and Expo in Orlando, Nelms outlined a number of distinct advantages of partnering with the Discover/NOVUS Network, including cost efficiencies, increased differentiation and flexibility. He emphasized Discover’s strong merchant acceptance, including a growing number of exclusive merchant partners.
“Given Discover’s attractive cost structure, we can offer substantially lower assessments to issuers because our network is more focused and integrated,” said Nelms. “Despite charging merchants less on average than other large card networks, our economics for financial institutions are attractive because issuers will not subsidize other products, international expenses, advertising, affinity/co-brand payments, overhead and legal fees,” added Nelms.
While Discover can link its authorization and settlement systems directly to issuers who process in house, Nelms also announced that First Data, TSYS and Metavante Corporation have already taken steps with Discover to ensure that their bank customers can issue on the Discover/NOVUS Network. These new processor links will facilitate financial institutions’ ability to issue card products on the Discover/NOVUS Network using their existing systems.
Nelms also invited merchants to pursue new partnerships with Discover. “U.S. merchants are fed up with ever increasing merchant discount rates for debit and credit cards, resulting from Visa and MasterCard price increases,” said Nelms. “Merchants are finding that the Discover/NOVUS Network is their solution to the high card acceptance fees charged by other networks,” added Nelms.
New restrictions on the Visa and MasterCard “honor all cards rules” will create new options for merchants, just as the successful outcome of the Department of Justice lawsuit against the Associations will soon create new opportunities for issuers. Both merchants and issuers can benefit from significantly growing volume on the low-cost Discover/NOVUS Network.
Nelms urged both issuers and merchants to call Discover to pursue a partnership.
Discover Financial Services, a business unit of Morgan Stanley (NYSE:MWD), operates the Discover Card brands and the Discover/NOVUS Network for its more than 50 million Cardmembers. The Discover/NOVUS Network is the largest proprietary credit card network in the United States with more than 4 million merchant and cash access locations.