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Tickers in this Article: DFS, GOOG, MA, V
Discover Financial Services (DFS) announced that it has entered into a partnership with Google Inc. (GOOG). This alliance will enable Discover cardholders to access their credit card using compatible smartphone by means of Google Wallet. The cardholders will simply have to save their Discover card on Google Wallet through their account on Discover's website and make it their primary credit card. The Google Wallet application on the user's compatible Near Field Communication ("NFC") smartphone will then automatically sync with the card. Alternatively, they can use their Google account or use the Google Wallet mobile application to add their Discover card to Google Wallet.

Subsequently, they will be able to use the smartphone to make in-store as well as online purchases through the card. The system offers a secure yet convenient alternative payment option to Discover's cardholders. Moreover, they will not have to forgo their Cashback Bonus rewards even if they use Google Wallet for payments.

The partnership is expected to be beneficial for Discover as it will help the company to attract the technology-friendly younger crowd towards its products. The company constantly strives to provide flexible and convenient payment options to cardholders in order to boost its card acceptances and enhance its competitive strength against bigger card giants, such as MasterCard Incorporated (MA) and Visa Inc. V).

In February, Discover's subsidiary, PULSE, signed an agreement with Obopay Inc., which allowed the company's debit card customers to transfer their money instantly through mobile phones using Obopay's 'Mobile Money for Banks and Credit Unions.'

Discover currently carries a Zacks #2 Rank, which translates into a short-term Buy rating. We maintain a long-term 'Outperform' recommendation on the stock.

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