Discover Financial Services is partnering with the National Payments Corp. of India, part of the company’s ongoing effort to increase card acceptance abroad by teaming with local networks.

National Payments is an organization of India’s retail-payment systems established by the country’s banks in 2009. The group’s objective is to consolidate and integrate the various retail-payment systems in India under the RuPay network.

Under the new alliance, announced March 7, Discover and Diners Club International cards will be accepted at National Payments ATMs and point-of-sale terminals. In addition, cardholders with RuPay, the national payment network in India, will be able to make purchases outside of the country over Discover and its Diners Club and Pulse networks.

“We’ve been pretty open about our strategy, which is creating an environment that is supportive with network interoperability,” Diane Offereins, Discover executive vice president and president of payment services, said in a March 8 interview. “It’s kind of the best of both worlds. You get to run your own show in your backyard, but it gives you all the things customers want, … including utility outside of the home market.”

Discover has had discussions with RuPay over the past couple of years, “and their needs matched up perfectly with our strategy,” Offereins adds.

The organizations will phase in the new agreement over the next couple of years, she said.

RuPay ATMs first will accept Discover and Diner’s Club cards later this year; point-of-sale locations will follow early next year. The final phase will enable RuPay Global Card purchases to be processed on Discover’s network worldwide by the middle of next year.

Over the past couple of years, Discover has forged similar various deals to expand acceptance globally (see story).  Last July, Discover forged a processing and merchant-acquiring agreement with First Data Corp. for international operations (see story).

And more partnerships of this type could be on the horizon.

“We’re in lots of discussions with lots of other partners,” Offereins says. “There are still a number of smaller national networks out there that could do something like RuPay wanted.”

But Discover is still struggling to expand acceptance of its cards worldwide, including popular tourist spots in Europe, even after from Citigroup Inc. in 2008. That deal was expected to help boost the bank’s international presence, where it has historically lagged rivals.

Offereins says the company’s strategy in Europe is to partner with acquirers like it does in the U.S., adding that Discover is making inroads in countries including the UK, Germany and France.

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