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Discover Financial (DFS) Gets Wider Payments Access in Italy

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·4-min read
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Discover Financial Services DFS recently inked a strategic deal with BANCOMAT S.p.A, one of the most prominent players of Italy’s debit card payments market, to boost payments acceptance across the country. The move will cater to those cardholders that are part of Discover, Diners Club International and network alliances, all clubbed under the Discover Global Network.

The collaboration with BANCOMAT will offer Discover Global Network cardholders an access to all the merchants of Italy on the back of the strong ties that the former shares with the acquirers. With this access, the cardholders can utilize their Discover Global Network cards and mobile payment products across the BANCOMAT network for conducting payments, which will be accepted widely by the country’s merchants.

Similar agreements reinforce Discover Financial’s continuous efforts to boost the Discover Global Network strategy of extending payment options to its issuing partners and provide varied and flexible options to its consumers.

Also, higher revenues are expected to be generated by Italy’s merchants from the hassle-free links established with the Discover Global Network cardholders, thereby underlining the diversified benefits that the DFS tie-up with BANCOMAT will fetch for merchants and cardholders. The recent alliance can also be termed as a time opportune move by Discover Financial as it strengthens its presence throughout Italy, considering the fact that the country remains one of the top business and tourism spots across the globe.

Penetrating this geographical location through its diversified suite of payment products and services will empower DFS to capitalize on the European nation’s promising business and tourism scope and generate higher revenues in return.

Partnerships like the one with BANCOMAT can only add to the strength of the Discover Global Network that contains an extensive cardholder base for which it processes billions of transactions in more than 200 countries and territories.

The network comprising Discover Network, Diners Club International, PULSE and global alliance partner networks — with a strength of more than 25 — boasts above 60 million merchant acceptance locations and 1.8 million ATM and cash access sites. The power of the network also makes BANCOMAT management optimistic about pursing new business opportunities with DFS in the days ahead.

Discover Financial frequently resorted to collaborations to bolster its capabilities, widen its payments acceptance network and strengthen its global presence. In March 2022, DFS tied up with IBM Consulting to accelerate the digital transformation of its present systems and applications into an open and flexible hybrid cloud architecture.

A very similar move, like the latest one, of boosting the payments network acceptance was pursued by Discover Financial earlier this year. In January 2022, DFS inked a deal with The National Bank of Serbia to boost global acceptance for the Discover Global Network cardholders in Serbia by using their cards on the DinCard payment network.

Price Performance

Shares of Discover Financial have lost 20.5% year to date compared with the industry’s decline of 25%.

Zacks Investment Research
Zacks Investment Research


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Zacks Rank & Key Picks

Discover Financial currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Finance space are Capital City Bank Group, Inc. CCBG, First Republic Bank FRC and Oaktree Specialty Lending Corporation OCSL. While Capital City Bank flaunts a Zacks Rank #1 (Strong Buy), First Republic Bank and Oaktree Specialty Lending carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Capital City Bank delivered a trailing four-quarter earnings surprise of 1.93%, on average. The Zacks Consensus Estimate for CCBG’s 2022 earnings suggests an improvement of 10.1%, while the same for revenues suggests growth of 1.4% from the corresponding year-ago reported figures. The consensus mark for Capital City Bank’s 2022 earnings has moved 17.8% north in the past 60 days.

The bottom line of First Republic Bank outpaced estimates in each of the last four quarters, the average surprise being 7.36%. The Zacks Consensus Estimate for FRC’s 2022 earnings suggests an improvement of 10% from the corresponding year-ago reported figure. The consensus mark for First Republic Bank’s 2022 earnings has moved 0.6% north in the past 60 days.

Oaktree Specialty Lending’s earnings surpassed estimates in each of the trailing four quarters, the average being 13.63%. The Zacks Consensus Estimate for OCSL’s 2022 earnings suggests an improvement of 12.5%, while the same for revenues suggests growth of 21.5% from the corresponding year-ago reported figures. The consensus mark for Oaktree Specialty Lending’s 2022 earnings has moved 4.3% north in the past 60 days.

Capital City Bank stock has gained 2.3% year to date. Shares of First Republic Bank and Oaktree Specialty Lending have lost 32.2% and 12.8%, respectively, in the same time frame.


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