Discover Financial Services (NYSE: DFS) today announced it has expanded its franchise agreement with Diners Club Ecuador (DCE) to include issuance of Discover cards in Ecuador. This is the first time in company history that Discover cards will be issued beyond U.S. borders.
As part of the agreement, DCE has been given the exclusive rights to issue Discover cards in Ecuador and will sub-license the issuing rights to Banco Pichincha, the largest bank in the country. Currently, DCE owns a market share of more than 40% by sales volume in Ecuador through their Diners Club products, and the complementary Discover card product was designed to further grow market share in the country. Discover cards will be processed on the Diners Club network in Ecuador, which boasts 100% merchant acceptance.
The new Discover card will initially offer a basic version of Discover's award-winning cash rewards program, Cashback Bonus, which includes up to 1 percent cash back on all purchases. New card products and features will be rolled out over time, as "cashback" is still a new concept in Ecuador. Cash rewards can be redeemed for a gift card once cardmembers earn $20 (USD) or a statement credit once they earn $40 (USD).
"Discover clearly will benefit from the success of the Diners Club Ecuador franchise, which is a dominant force throughout the country," said Diane Offereins, EVP and President of Discover Payment Services. "By leveraging DCE's strength and expertise in-market, Discover has a tremendous opportunity to build its brand globally and share its most compelling attributes - including best cash rewards, service and value - with the people of Ecuador."
"This agreement gives us the opportunity to expand our financial services product portfolio and introduce consumers in Ecuador to the Discover brand, which has a proven track record of success in the U.S.," said Pablo Salazar, president of Diners Club Ecuador.