In an attempt to tap the large potential customer base, Discover Financial Services (NYSE:DFS) – through its business unit Diners Club International LTD. – has been looking to make deals in emerging markets in Asia. Earlier this month, the company entered an agreement with Bangkok Bank in Thailand,  and is also associated with the RuPay payment gateway system that was launched in May 2014 in India. 
Discover is the third largest credit card company in the U.S. after Visa and MasterCard in terms of cards in force. Outside the U.S., Discover’s network has acceptance in more than 185 countries. The Trefis price estimate of $60 is about in line with the current market price. In this article, we take a look at Discover’s new partnerships in Asia.
Partnerships In Asia
Discover has been looking to capture the Asian markets, which remains largely underpenetrated. According to a study of payment patterns compiled by McKinsey Insights, the Asia-Pacific region accounts for nearly 75% of global transactions, yet contributes only 30% of global revenues . This is likely to increase going forward as consumers shift more from cash to electronic and card payments., which presents a great opportunity for credit card companies.
Thailand – Bank of Bangkok
In May 2014, Discover announced a partnership with Thailand’s Bangkok Bank, wherein merchants using the Bangkok Bank terminal network in Thailand will now accept Diners Club International, Discover, BC Global, DinaCard and RuPay cards, which are all part of the Discover Global Network. . At present, Bangkok Bank is Thailand’s largest bank with nearly 20 million account holders.
Some 97% of the transactions within Thailand were cash-based in 2010, but fueled by economic growth and the adoption of newer payment modes, cashless transactions are likely to register a 20% growth rate in the 2010-2015 period, according to McKinsey report. 
India – RuPay Payment Gateway
The National Payments Corporation of India (NPCI) launched India’s own payment gateway called RuPay in May. Discover and NPCI signed an MoU in 2012 to allow wider network acceptance for RuPay. The agreement allows acceptance of Discover cards and Diners Club International cards at NPCI ATMs and point-of-sale terminals for purchases in India. It also enables RuPay cardholders to utilize the Discover, Diners Club International and PULSE networks for international purchases and cash access outside of India.  Although competition with existing systems will be be a challenge, if RuPay – which is supported by the government with an objective of financial accessibility to a larger population – gains traction, it can be a profitable deal for Discover.
RuPay cards, which are accepted at 160,000-plus ATMs, around 1 million point-of-sale terminals and most of the e-commerce merchants (about 10,000) in India, it will facilitate a tremendous growth opportunity for Discover in the Indian market with direct access to a large untapped consumer base.