The way payments are made and processed is changing. And Discover (NYSE:DFS) is approaching this shift in an unconventional way compared to competitors Visa (NYSE:V) and MasterCard (NYSE:MA), which could lead to big success down the road.
At the recent TRANSACT 14 conference, which focused on the ever-shifting payment industry that is poised for disruption, individuals were greeted with all sorts of new technology, ideas, and trends that will transform the way consumers pay for things. While much talk was made about the shifting dynamics mobile commerce will bring, it turns out Discover is taking a different approach to this change than the rest of its peers.
Instead of focusing on technological shifts, Discover is uniquely positioning itself for long-term success through its partnership initiatives. In fact, one of those include a partnership with China's UnionPay, whose debit card is now the most widely used product in the world.
Chinese law, requires any cards which are issued in the rapidly growing country to be done through UnionPay. And while this was deemed to be discriminatory against U.S. firms by the World Trade Organization in 2012, there is progress still to be had.
Visa's CEO recently remarked that he believed it would be a five to 15 year time frame for its cards to be used in China. He noted at a conference, "[i]t's going to take a long time for the market to actually open up in a way that we actually do have that level playing field."
And while MasterCard recently announced it has teamed with China Construction Bank to utilize its MasterPass technology for online shopping, it still faces difficulties in the country.
In the video below, Motley Fool contributor discusses his big takeaways for Discover following the TRANSACT 14 conference, and despite any major announcements, he remains optimistic about the future of the company.
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Patrick Morris owns shares of Discover Financial Services. The Motley Fool owns shares of Discover Financial Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.