To boost transaction volume and acceptance, Discover Financial Services LLC and JCB Co. Ltd., Japan’s biggest card issuer and acquirer, have agreed to accept each other’s cards in their respective countries.
Discover, a Riverwoods, Ill., business unit of Morgan Stanley, and JCB, of Tokyo, announced the deal Wednesday.
The United States is the top destination for Japanese tourists; nearly 4 million traveled there last year, according to the Commerce Department. Discover said more than a million Americans visit Japan.
Hiroya Nobuhara, JCB’s president and chief executive, said in a press release that the Discover deal “will bring significant expansion of JCB card acceptance in the United States.”
The two card companies must upgrade their networks to support the transactions. Discover plans to begin the work next year, but Roger Hochschild, its chief operating officer, would not say when its network would be ready to accept JCB cards.
JCB said its network would be ready to accept Discover cards at merchant locations and certain automated teller machines by 2008.
In May of last year Discover announced a similar deal with China UnionPay.
Mr. Hochschild said his unit continues to benefit from a Supreme Court decision in October 2004 that enabled banks that issued Visa U.S.A. and MasterCard Inc. cards to also issue Discover and American Express Co. cards.
That ruling “really unleashed our abilities to compete as a network,” he said.
