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Discover, JCB join forces to spur card growth in Japan

Discover broadens its international reach after inking a card partnership with Japan Credit Bureau.

September 6, 2006

In a bid to expand its international presence, Discover Financial Services LLC and Japan Credit Bureau have entered into a partnership designed to increase the acceptance of Discover cards in Japan and JCB cards in the United States.

The agreement, expected to take effect in 2007 in the United States and 2008 in Japan, is a win-win for U.S. merchants and JCB cardholders, because it significantly increases the number of U.S. merchant locations where JCB cardholders can use their cards, says Discover.

"JCB card-holding Japanese citizens now have more payment options when visiting the U.S., as well as the added convenience of being able to use their JCB cards at more merchant locations in the U.S.," said a Discover representative. "Because JCB cards have very limited acceptance in the U.S., this agreement will significantly increase the number of merchant locations where JCB cardholders can use their cards. In turn, international acceptance of Discover Network cards increases through acceptance at new JCB merchant locations in Japan."

Based on Department of Commerce statistics, Discover projects that in 2006 more than 1 million Americans will travel to Japan, where they will spend an estimated $3,400 per trip.

Department of Commerce statistics also show that more than 3.8 million Japanese travelers in 2005 visited the United States, where they spent more than $12.9 billion.

"The alliance with Discover will provide a great level of convenience for our cardholders who travel to the U.S. In addition, by offering Discover Network acceptance to its Japanese merchants, JCB expects to further strengthen its position in providing credit-card payment solutions in Japan," said Hiroya Nobuhara, JCB's president and chief executive.

The agreement also includes an ATM option for issuers, allowing them to accept Pulse cards at targeted ATMs throughout Japan.

Reaching across the globe

The agreement with JCB is the latest in a series of card partnerships Discover has established with international financial entities. Discover recently signed a reciprocal card agreement with China Union Pay. Acquiring deals, such as ones Discover has with companies in Canada, Mexico, the Caribbean and Central America, are expected to help Discover increase the number of international merchants that accept its cards.

Discover's representative wouldn't discuss the company's long-term international strategy. But She did say that "broadening Discover Network card acceptance is a priority for Discover and we are actively pursuing opportunities in key travel destination markets."