Monday, April 07, 2008

Discover to Buy Diners Club

Discover Financial Services (Discover card) is buying the Diners Club credit card from Citigroup. Integration will take awhile (two to three years for full implementation, according to the announcement), but once in place it should mean that Discover cards will be accepted wherever Diners cards are taken, and vice versa.

One interesting and curious aspect is that the current Diners Club card in the U.S. is affiliated with and carries a MasterCard brand, and is currently accepted at any MasterCard merchant. Diners has an interesting array of value-added travel services (airport lounge access, primary car-rental insurance, frequent-flyer point transfers, much more international acceptance than Discover). Discover has been known for its various cash-back rewards programs and 0% foreign-exchange fees (although the card is seldom accepted internationally, except for Canada, Mexico, Central America, the Caribbean, and China).

It will be fascinating to see what card(s) come out of this alliance, and what the branding will be, but we would expect a much more useful (both U.S. and international) travel product.