Discover Financial Services DFS recently announced a strategic alliance with Telered, transforming the payment experience and increasing acceptance for cardholders. This partnership aims to enhance payment systems and create opportunities for individuals, businesses, and financial institutions.

This move bodes well for DFS, as it will benefit from the Panamanian merchant network's acceptance of its cards, enhancing convenience for tourists and global business travelers. Higher domestic and cross-border transactions will aid DFS’s discount/interchange revenues in the future. The metric declined 4% year over year in the third quarter of 2024.

This partnership will also enable Sistema Clave users to access over 70 million global merchants and 1.8 million ATMs, allowing seamless international transactions. Local users will continue benefiting from pin security and the low cost of the Sistema Clave Card while also being introduced to contactless technology for payments and integration into digital wallets.

The agreement also benefits local merchants by expanding their reach to more than 345 million cardholders, including Discover, Diners Club, and PULSE networks. This expansion effectively increases revenue opportunities for Panamanian businesses, fostering economic growth and global integration.

Project Clave 2.0 will be completed in three stages over a year. The first stage involves changes to Telered’s infrastructure and interconnection with Discover Global Network. The second and third stages include issuing the new Clave Global card, transitioning users to the updated system and enabling acceptance at merchant locations and ATMs.

DFS’ Price Performance

Discover Financial’s shares have gained 41.3% in the past six months compared with 25.4% growth of the industry.

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DFS Zacks Rank & Key Picks

Discover Financial currently has a Zacks Rank #3 (Hold).

Investors interested in the broader Finance space may look at some better-ranked players like Jackson Financial Inc. JXN, ProAssurance Corporation PRA and WisdomTree, Inc. WT. Jackson Financial and ProAssurance sport a Zacks Rank #1 (Strong Buy), while WisdomeTree carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Jackson Financial’s current-year earnings is pegged at $18.80 per share, which indicates 46.4% year-over-year growth. It witnessed two upward estimate revisions in the past 60 days against no downward movement. The consensus mark for JXN’s current-year revenues suggests a 119.7% surge from a year ago.

The Zacks Consensus Estimate for WisdomTree’s 2024 earnings indicates 75.7% year-over-year growth. During the past two months, WT has witnessed three upward estimate revisions against none in the opposite direction. It beat earnings estimates thrice in the past four quarters and met on the other occasion, with an average surprise of 7.3%.

The Zacks Consensus Estimate for ProAssurance’s current-year earnings suggests a 571.4% year-over-year improvement. During the past two months, PRA has witnessed two upward estimate revisions against none in the opposite direction. The consensus mark for current-year revenues is pegged at $1.1 billion. It beat earnings estimates thrice in the past four quarters and missed once, with an average surprise of 61.5%.

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