Currently, if your business wanted to accept all four major credit cards you would go to a company that set up Visa and MasterCard together for you and then also help you set up a Discover Card account and an American Express account. Essentially you would have established three relationships. Although Visa and MasterCard are two separate companies the way they operate allows processing banks to wrap them up into one package with the same rate structures. The result of this is that you will be very hard pressed to find a merchant that accepts Visa but not MasterCard and vise versa.
What you won’t be hard pressed to find is a merchant that accept Visa and MasterCard but doesn’t accept Discover Card. This is because of Discover Card’s low level of usage relative to Visa and MasterCard. Most merchants work under the assumption, and rightly so, that anyone with a Discover Card also has a Visa or MasterCard. So why bother dealing with another company with extra rates and fees when you can just have one relationship that takes care of your needs?
To combat this problem Discover is moving to a new business model. Starting in November Discover Card will allow the same processing banks that establish merchant accounts for Visa and MasterCard to include Discover Card. The processing bank will be able to set their own rates just like they do with Visa and MasterCard (currently Discover Card has a set fee program which means every merchant has the same rate structure to work from). This means that when you establish a new merchant account, you can get one quote that will cover three major credit cards. You also only have one relationship to manage and one monthly statement. It also means there is potential for Discover Card rates to be more attractive then they were in the past as now competition can cause the pricing to go down.
This new program will start in November with First Data and this will expand as other processors have already signed up and more are on the way. This should increase Discover Card’s reach dramatically. Maybe in the not-too-distant future Discover Card will be as synonymous as Visa and MasterCard?