Discover financial services
Discover Financial Services (NYSE: DFS) is a credit card company that issues its own cards and processes customer transactions.
Discover has a similar business model to competitor American Express. Both of these firms issue their own cards and earn a small fee, called the discount rate, from the merchant every time the card is used. Discover, like AmEx, bears the burden of credit risk if its cardholders are unable to pay off the balances they rack up using their card. This is a different business model than competitors Mastercard and Visa who simply process transactions and shift the credit risk to the card issuing banks.
Related Fool Articles
Recent Mentions on Fool.com
- Don't Look Now, But Discover Financial Services is About to Unload One of its Business Units
- Discover Financial Investors Should Officially Be Worried
- How Credit Cards Work: The Benefits and the Catches
- The Biggest Red Flag for Credit Card Companies
- You'll Probably Be Surprised by the Credit Card Brand Americans Are Most Loyal to