Agreement will lead to acceptance of Discover cards in Japan

Discover Financial Services LLC and JCB, the largest credit card issuer in Japan, announced today that they have entered into a “strategic relationship” that will lead to each company accepting the others cards on their network.

Discover, a business unit of Morgan Stanley, will accept JCB cards on the Discover Network in the U.S. and JCB will accept Discover cards on their network in Japan.

The agreement will also allow for acceptance of PULSE cards at targeted ATMs in Japan at the option of the card issuer.

In 2007 Discover Network will begin enabling its systems to handle JCB cards at Discover Network merchant locations. JCB will also begin work on their system to allow Discover Network cardholders to use their cards for purchases at JCB merchant locations and for cash advances at targeted ATMs throughout Japan. JCB’s necessary system enhancement is expected to be completed in 2008.

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“This strategic relationship with Discover will bring significant expansion of JCB card acceptance in the United States,” said Hiroya Nobuhara, president and CEO, JCB. “The alliance with Discover will provide a great level of convenience for our cardholders who travel to the U.S. In addition, by offering Discover Network acceptance to its Japanese merchants, JCB expects to further strengthen its position in providing credit card payment solutions in Japan.”

Both U.S. and Japanese merchants are expected to benefit from the deal. U.S. Department of Commerce statistics also state that more than 3.8 million Japanese travelers visited the U.S. in 2005, and spent more than $12.9 billion and Discover projects that more than 1 million Americans will travel to Japan in 2006, and will spend more than $3,400 per trip.

“Our relationship with JCB will facilitate bidirectional international commerce, which will create new opportunities for U.S. merchants to serve JCB cardholders traveling to the U.S. from Japan and other countries,” said David Nelms, chairman and CEO of Discover Financial Services. “This agreement also creates value for Discover Network cardholders by expanding acceptance into Japan, which is a key international market.”

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