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Details surrounding Discover debit strategy are murky

March 26, 2006

Digital Transactions:More than a month after officially entering the signature-debit card market, details of Discover Financial Services Inc.'s debit card strategy remain sketchy. Discover's pitch to financial institutions to issue its debit cards is built around Discover's ability to offer issuers an interchange rate that is competitive with rates offered by Visa U.S.A. and MasterCard International, but which will not eat up as large a portion of merchant revenues on a per-transaction basis. Despite Discover's claims of being both issuer- and merchant-friendly, little, if any, information about interchange rates for Discover debit and the network fees is circulating.

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