The biggest names in digital payments — PayPal, Isis, Google — have one thing in common: they all have a relationship with Discover Financial Services.
“We want to be the best partner in the world,” David Nelms, Discover Financial Services chairman and CEO, said at the Electronic Transactions Association's 2013 Annual Meeting & Expo in New Orleans.
He focused on Discover’s partnerships with PayPal Inc., RuPay and independent sales organizations.
Retailers are beginning to accept PayPal at stores through the Discover network, Nelms said. The move reflects PayPal’s desire to provide new technology through established infrastructure, he said.
Discover was also the first network to work with the Isis mobile payment initiative, and as an issuer it supports Google Wallet.
ISOs and sales agents should take advantage of the Discover-PayPal relationship by promoting it to merchants and thus appearing technologically savvy, Nelms said.
Besides giving Discover a presence in India, the alliance with RuPay enables Indian RuPay cardholders to use their cards on visits to the United States, he said.
Nelms also outlined the sweeping changes he’s seen during his 15 years in the top spot at Discover, noting that 11 of the nation’s biggest card issuers in 1998 have left the business. In the same time period Discover acceptance has grown from 3.6 million locations to more than 200 million worldwide, he said.
But the changes of the past will seem mild compared with the seismic shifts ahead, Nelms said.
In dealing with change, the card industry should heed the problems that have befallen other industries, he warned. The recording industry, he noted, failed miserably in its attempts to change with the times.
Television, on the other hand, has progressed from three networks to a welter of complexity, he said.
One change at Discover has been to emphasize the importance of relying on ISOs to reach merchants instead of depending upon a Discover inside sales team.
Big changes he expects include an integration of banking and retailing, the proliferation of mobile payments and the acceptance of the EMV-chip card standard.
Prepare for a disruption in retail banking as branches shut down and the line blurs between banking and retailing, he said. Meanwhile, mobile payments will grow in importance.
“The smartphone is the center of the universe,” he said, noting that users are so enamored of the devices that about two-thirds of users keep them at bedside as “alarm clocks.”
Discover has changed its collective mind about EMV, Nelms told the crowd.
“Two years ago, we predicted leapfrogging EMV,” and moving on to mobile. “Now we believe in EMV.”
In closing his presentation, Nelms advised ISOs to keep up with a changing world.
“To cling to the past is to risk being left behind,” he said.