IMGCAP(1)]
Canada's BMO Financial Group is nearly doubling its corporate card business with its purchase of the Diners Club North America franchise from Citigroup Inc., bringing in $1 billion in net receivables and $7.8 billion in card transactions (CardLine Bulletin, 11/24). The purchase also may serve as a pick-me-up for a struggling card brand, contends Ed Kountz, senior analyst, e-business and channel strategy at Javelin Strategy & Research. Kountz says little has changed for Diners Club since the findings of a 2008 Javelin online survey of 3,675 U.S. online users that suggested the card brand had less than 1% of the market. "The problem is, when a brand goes into remission and you attempt to resuscitate it, how do you unlock the hidden value?" he says. "BMO has a point that there are some opportunities there, but even though [commercial cards] are a relatively healthy area, there's a lot of competition. But if BMO thinks they can make it happen, then we'll have to just wait and see." Discover Financial Services acquired Diners Club International Ltd. from Citi in April 2008 for $165 million, and organizations throughout the world have franchise agreements to issue Diners Club cards.
