If Discover’s first-ever credit card issued outside the U.S. is a hit in Ecuador, watch for the company to expand further in other emerging-economy countries, including in Latin America.

Riverwoods, Ill.-based Discover Financial Services on March 14 announced its Discover-branded credit cards will be issued in Ecuador through an expansion of an agreement with a Diners Club International franchise.

Diners Club Ecuador will issue Discover cards there, targeting a “mass audience,” Dan Gingiss, Discover director of global product development, tells PaymentsSource. Banco Pichincha, Ecuador's largest bank, also has a sublicense to issue the cards through Diners Club Ecuador.

Diners Club Ecuador for decades has offered charge cards to upscale consumers and business travelers in Ecuador. Those cards carry an annual fee of $60, but costs vary based on the level of service, a Discover spokesperson says.

Discover’s card in Ecuador will carry a US$35 annual fee and will provide cash-back rewards, which are still a relatively new concept in the country, Gingiss says.

“Ecuador has an interchange system much like elsewhere in the world, and people there are familiar with credit card rewards, but more around points than cash back,” he says.

Ecuador is one of the largest franchises of Diners Club, which Discover purchased in 2008 from Citigroup Inc. (see story).

Diners Club, which has had a presence in Ecuador since 1967, has 100% merchant acceptance in the country and is one of the leading credit card brands there with 40% market share, Gingiss says.

Discover in recent years has significantly expanded acceptance of Diners Club and Discover around the world through a series of agreements, including its latest deal with European acquirer WorldPay in November (see story).

Discover does not disclose its total number of merchant-acceptance locations, but the brand has “broad” acceptance around the world, Gingiss says.

“Merchant acceptance goes hand in hand with issuance. … We expect that through this deal and others we have announced recently we’ll see expansion of both card acceptance and issuance,” he says.

Discover also is “in talks with” several other franchisees of its Diners Club International network that are considering issuing Discover cards in various markets around the world, Gingiss says. Latin America, where credit card penetration is low in many regions, could be a ripe opportunity, he suggests.

Discover on March 7 announced a partnership with National Payments Corp. of India to increase card acceptance there. The deal enables Discover and Diners Club cards to be accepted at National Payment ATMs and point-of-sale terminals (see story).

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