Discover Cards to Go International in 2010

In what would be a notable step forward, Discover Financial Services’s flagship card will be available for overseas payments in 2010.

Currently, Discover Network Cards are accepted only in the United States. But with Discover Financial Services’s purchase of Diners Club last spring, the company will be able to create “network interoperability,” meaning that its cards can be used across its various payments platforms, within 18 months.

Diners Club, for which Discover paid $165 million, has a great international presence. For example, Diners Club has 44 global issuer licensees, including Bank Austria Creditanstalt and Banco Santander.

About $212 billion of payments and charges were conducted through Discover Financial Services’s various channels in the 12 months ending last quarter. That compares to $186 billion in 2007.

It is difficult to gauge what international acceptance will be worth to Discover’s flagship cards. David Nelms, the chief executive of Discover Financial Services, acknowledged recently that international spending is a “relatively low percentage” of activity for its U.S. cardholders. Nevertheless, Nelms said the addition will a) be profitable to Discover; b) will make Discover more appealing to travelers, corporations, and consumers looking for frequent-flyer programs, rather than the cash-back programs Discover currently hawks; and c) should expand Discover card usage overall.

International acceptance will help Discover “stay in front of the wallet,” he said.