MOUNT SNOW, Vt. -- ISOs can benefit by alerting merchants to the progress Discover is making in card acceptance, a speaker maintained here Wednesday at the Northeast Acquirers Association annual conference.

ISOs are losing business because some merchants don’t realize their systems accept Discover cards, John Badovinac, the brand's senior manager of acquirer relations, told attendees.

About 98% of the nation’s merchants have the technical capacity to accept Discover, an increase of 139% in the last five or six years, Badovinac said.

Discover employees visited half a million merchants last year to let them know they can take Discover cards, he noted.

“That means we want to work with you,” Badovinac told attendees.

Discover also is spending heavily on consumer advertising to let the public know Discover could be accepted just about anywhere, he noted.

That advertising should pay off because consumers want to use Discover, Badovinac asserted.

One in four households have Discover cards, and research shows the cardholders form a lower opinion of merchants that decline the cards, he said. In fact, 51% of Discover cardholders don’t go back to merchants that won’t accept their cards, according to researchers.

The perception that accepting Discover is expensive for merchants doesn’t ring true, Badovinac continued, because a study indicates 78% of consumers use reward cards as their primary cards.

The average Discover cardholder is 41 years old, has household annual household income of $106,000 and spends more on an average purchase than Visa or MasterCard cardholders, he noted.

Besides telling merchants about Discover’s progress in the United States, ISOs should alert merchants to the card’s international connections, Badovinac said.

Merchants with the technical capability to accept Discover, which now includes just about all merchants, can also accept JCB, Union Pay, BC, DinaCard and Diners Club International.

The world’s growing middle class spends an average of $4,200, not including airfare, on their Discover-related international cards during visits to the U.S., Badovinac told attendees.

Persuading merchants to display signs indicating acceptance of the international cards could boost sales, he suggested.

Meanwhile, the deals with international card brands are reciprocal, so Discover cards are accepted at 21.5 million stores and restaurants around the world, Badovinac said.

ISOs also stand to benefit from Discover’s new relationship with PayPal, he said. PayPal cards run on the Discover “rails” and growing in number.Discover is encouraging ISOs and their sales agents to use test cards to ensure their merchants’ equipment accepts PayPal cards, and it issues a kit to get them started, Badovinac said.


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