The PULSE network remains the key driver of payments transaction volume for Discover Financial Services (DFS), growing 4% year-on-year (Y/Y) in the second quarter (Q2/14) to $41.5 billion, representing 51.1% of Discover’s network total volume. Overall, DFS’ network volume is up 4% Y/Y to $81.1 billion. The most robust payments business for DFS is its Network Partners segment, up 7% Y/Y in Q2/14, followed by the Proprietary segment, up 6%. However, DFS continues to struggle with its Diners Club international segment, which slipped down 2% Y/Y in Q2/14.
In Q2/14 DFS processed 1.1 billion PULSE transactions, up 2% Y/Y, after peaking at 1.6 billion in the final quarter of 2013.
DFS PULSE volume grew 4% Y/Y in Q2/14 to $41.5 billion, compared to a $41.9 billion for Q1/14 and $40.1 billion in Q2/13.
DFS proprietary volume grew 6% Y/Y in Q2/14 to $30.3 billion, compared to a $26.5 billion for Q1/14 and $28.6 billion in Q2/13.
DFS Diners volume dipped 2% Y/Y in Q2/14 to $6.7 billion, compared to a $6.5 billion for Q1/14 and $6.8 billion in Q2/13.
DFS network partners volume rose 7% Y/Y in Q2/14 to $2.6 billion, compared to a $2.4 billion for Q1/14 and $2.4 billion in Q2/13.
DFS credit card purchase volume grew 6% Y/Y in Q2/14 to $29.3 billion, compared to a $25.7 billion for Q1/14 and $27.6 billion in Q2/13. The DFS total credit card volume jumped 7% to $31.7 billion in Q2/14, compared to $28.0 billion in the prior quarter and $29.7 billion in the year-ago quarter.
Discover reported that Payment Services pretax income was $31 million in the second quarter, up $52 million from the prior year. The second quarter of 2013 had total pretax charges of $55 million, including a $15 million increase in loan loss provisions, related to supporting Diners Club International franchises in Europe.
RAM Research estimates Discovers’ Payment Services dollar volume will top $52 billion in the third quarter.
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Diners volume is derived from data provided by licensees for Diners Club branded cards issued outside of North America and is subject to subsequent revision or amendment.
Proprietary Network Volume represents gross proprietary sales volume on the Discover Network.