PULSE, a leading debit/ATM network and part of Discover Financial Services (NYSE:DFS), has signed an agreement with Obopay Inc., a California-based company that specializes in mobile payment technology and services. Both the companies have agreed to enable real-time money transfer capabilities for PULSE financial institution participants. In other words, PULSE network can now offer real-time person-to-person (P2P) and account-to-account transfer (A2A) services based on the Mobile Money for Banks and Credit Unions offering from Obopay. Customers can also receive funds from other institutions to their debit card accounts instantly.  Discover Financial competes with Visa (NYSE:V) and MasterCard (NYSE:MA) in the mobile payments market.
The demand for instant services is growing rapidly in today’s fast-paced world. We expect real-time mobile money transfer to gain popularity over time and increase Discover’s mobile transactions. Financial institutions will find this service useful as it eliminates the risk of inadequate funds in accounts. Additionally, they will be able to leverage the existing connectivity and settlement processes they already have in place with the PULSE network and add new solutions without the need for core banking system integration.
We have a price estimate of $25.98 on Discover’s stock, about 15% below its current market price.Notes:
- PULSE and Obopay Collaborate to Provide Real-time Payment Solution, Feb 23, 2012, Press Release [↩]