As 2012 progressed, one thing became strikingly clear: the card networks do not want to be left behind as new digital payment methods threaten plastic.
In particular, Discover Financial Services has shared the spotlight with several major entrants to the mobile and digital payment market.
Discover is a key partner in bringing PayPal's digital wallet to the point of sale. It was also among the first companies to sign on to the new cloud-based Google Wallet after Google changed the way it courts issuers.
Discover is also rumored to be behind a plastic card that will serve as a companion to Google's mobile wallet. And of course Discover was the first network the Isis mobile wallet venture signed.
The other card networks are also marking their territory in the new digital-payments world. Visa recently launched its bank-friendly V.me wallet, American Express is making a play for the underbanked and for gamers, and MasterCard is entering deals to grow mobile and prepaid payments worldwide.
"The general theme is that payments are going to continue to grow, but the electronic play is where things are going," says Brian Riley, senior research director and analyst with Needham, Mass.-based CEB TowerGroup.
Discover's deal with PayPal will allow Discover merchants to also accept PayPal payments at the point of sale next year, with the transactions routing over Discover rails. In effect, it gave PayPal's digital wallet the potential for acceptance at more than seven million U.S. merchants.
Discover also recast its approach to its conventional credit products. Its new Discover It campaign promotes its liberal policy regarding late payments. As part of the campaign, Discover offered to not charge a late fee for the first delinquent payment, and not to raise the annual percentage interest rate for paying late.
Discover also changed its business strategy near the end of the year, making it easier for independent sales organizations to work with the card brand in obtaining merchant services accounts.
Meanwhile, MasterCard and Visa made progress in resolving the years-long legal dispute over price-fixing and swipe-fee allegations, which the networks proposed to settle for about $7.25 billion. Many merchants oppose this settlement and are fighting it in courts, in the media and on Capitol Hill.
Visa, in addition to moving its headquarters from San Francisco to Foster City, Calif., also had to deal with some changes atop its management hierarchy, announcing in December that its president, John Partridge, would be retiring at the end of March. That news came a few months after chief executive Joseph Saunders left the company and was replaced by JP Morgan Chase executive Charles W. Scharf.
As it has done before, Visa made its biggest promotional splash of the year in sponsoring the 2012 London Olympic Games and using the major international event as a testing ground for its contactless payment systems through a partnership with Samsung.
In the meantime, MasterCard also continued to make strong moves with its international business.
The Purchase, N.Y.-based card brand completed a global PayPass deal with NTT Docomo, a major telecommunications company in Japan in October.
MasterCard also took part in testing the acceptance of EMV payments online with ING Group in Netherlands with the intention of creating a global product in the future.
In addition, MasterCard continued its pact with Western Union to push its prepaid card business internationally.
When it purchased Truaxis Inc. in early September, MasterCard showed it was looking to reinforce the notion that the special offers or daily deals marketing space was going to be a key element in mobile commerce.
While MasterCard remained busy in developing relationships with international telcos during the year, the card brand closed out its year with an announcement this month that it had entered into a strategic partnership with NFC mobile wallet developer C-Sam, with a focus on markets in Asia, the Middle East and Africa.
For American Express, the year marked a shift to a new audience for the New York–based card network, which is most often associated with an affluent customer base.
Arguably Amex's biggest move is a partnership with Wal-Mart Stores Inc. to provide the Bluebird prepaid card.
Amex offers a separate prepaid card at Walgreen Co. stores.
Showing it was also interested in supporting alternative payment methods, Amex extended its Serve digital wallet to the Isis mobile payment venture.
In its pursuit of gamers, Amex last month began offering $35 in statement credits for credit card users that purchase and complete the new Halo 4 game for Microsoft's Xbox 360. The credits cover half the cost of the game's retail price.
With its Serve product, Amex targets casual gamers through a deal with Zynga, the developer of the popular Farmville game on Facebook. In May, the companies announced a quest in the Farmville game that requires users to open and fund a Serve account in real life.
In addition, Amex sought to strengthen ties to business cardholders through social media. Amex offered those cardholders $100 of free Twitter advertising for signing up for a new Twitter service.