The Pulse electronic funds transfer network's deal with Interac, Canada's lone debit network, is part of a global strategy to increase automated teller machine acceptance of the Diners Club card, Pulse's president David R. Schneider said.
"First and foremost, the agreement is to support the Diners Club network," Schneider said. Pulse's parent, Discover Financial Services, bought Diners Club International from Citigroup Inc. last year for $165 million.
Diners Club cardholders could begin withdrawing cash from some Canadian ATMs in July, according to Allen Wright, vice president of products at Interac. In October, Discover credit and Pulse debit cardholders will be able to withdraw cash from participating Canadian ATMs.
Under the agreement announced Tuesday, Diners Club withdrawals initially will be routed over Interac's network before Interac switches them to the network operated by Pulse, of Houston. Previously the transactions would go over Visa Inc.'s Plus or MasterCard Inc.'s Cirrus international ATM networks.
Diners Club cardholders currently can withdraw money from 8,000, or 14%, of Canada's 57,864 ATMs using the Interac/Pulse connection. Pulse is holding discussions with Canada's ATM acquirers to increase machine access, Schneider said.
Extending Discover card's ATM access also is a goal of the agreement, Schneider said. "Discover does not have a global footprint," he said.
But Discover acceptance is growing. Discover cards are accepted in China as part of a reciprocal agreement with China UnionPay, the country's bank card network. Under that agreement, Pulse agreed to accept UnionPay cards in the United States, and Discover cardholders could use their cards at UnionPay's 365,000 merchant locations and 80,000 ATMs in China.
In 2006, Morgan Stanley, Discover's owner at the time, signed a similar agreement with JCB, Japan's largest credit card issuer.
Discover also has targeted other countries.
Last month, Venture Infotek Global Pvt. Ltd., an Indian processor, signed a long-term merchant-acquiring deal to handle Diners Club and Discover transactions.
And in March, Multipay AG of Switzerland agreed to acquire and process transactions for Diners Club and Discover credit cards.
Pulse's agreement with Interac does not include point of sale terminal access, and it does not permit Interac debit cardholders access to Pulse's 289,000 ATMs in the U.S. and more than 600,000 worldwide, Schneider said, noting that discussions are continuing.