Is Discover’s Acquisition of the Diners Club Network a Good Thing?

Implications: Discover's acquisition of the Diners Club global network could greatly improve Discover's merchant acceptance.  However, there are major technical and operational hurdles involved in integrating the two networks.

Analysis: Is Discover’s Acquisition of the Diners Club Network a Good Thing? Discover recently closed on its acquisition of the Diners Club merchant network at a relative bargain basement price.  Was this a wise move for Discover?  It’s a question open for interpretation.  On the pro side, it gives Discover global reach in new markets.  Up to this point, Discover has largely been a North American card, issued only in the U.S. but also accepted to a limited degree in Mexico, Canada and the Caribbean.  On the con side: Prior to selling Diner’s to Discover, previous owner Citibank converted its U.S. issues Diners Cards to MasterCard, shortly after losing a very lucrative U.S. government corporate card contract.  Thus, Discover bought a railroad with relatively few trains.  Additionally, there are very formidable technological and inter-operability issues.  Bottom line:  This transaction would have made much more sense a couple of years ago when there were still a significant number of Diner’s Club cards in existence in the U.S.  As it stands now, Discover’s acquisition of the Diners network has limited utility.