Discover Partners with Zynga: Offers Gaming Points, Ads on FarmVille

Discover Financial Services (NYSE:DFS) has recently announced that it has partnered with the leading social game developer, Zynga, to launch an expanded version of Farmville. The deal would allow Discover customers to convert cash-back reward points into Zynga gift card. ^[1] As credit card companies are looking for best ways to integrate social networking opportunities into their delivery process, the deal would benefit Discover in building its brand awareness among online customers. Discover competes with Visa (NYSE:V), MasterCard (NYSE:MA), American Express (NYSE:AXP) and Capital One (NYSE:COF).

We have a price estimate of $26 on Discover’s stock, about 10% above the current market price.

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The deal, which will show Discover’s brand within Farmville games, is first of its kind between a credit card provider and a social games developer. Discover customers can now convert their $25 cash back rewards into $50 worth Zynga points. This will help Discover better connect with young customers and offer them attractive rewards.

Earlier this year, Discover offered its customers who became fans of the company’s Facebook page a chance to win gift cards and other prizes. ^[2]

The deal with Zynga is yet another demonstration of the Discover’s innovative programs to boost its credit card usage. The deal could go a long way in bringing together the online customers and the offline use of the credit cards.

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1. Discover(R) Sponsors First-Ever Zynga FarmVille Game Expansion, Press Release, Discover Financial, Dec 1, 2011 [↩]
2. Discover Expands Online-Game Rewards Program, American Banker, Dec 1, 2011 [↩]