Discover Financial Services saw its overall dollar volume increase 10% year over year in the second quarter despite a stable performance of Discover’s Pulse debit network.
Illinois-based Riverwoods Discover said Wednesday evening that total payment volume in the quarter ended June 30 was $138.7 billion compared to $125.6 billion in the year-ago period. Proprietary volume on the Discover credit card network jumped 18% to $55.8 billion, from $47.2 billion in the second quarter of 2021.
Pulse volume was $63 billion, virtually unchanged from $62.9 billion a year ago. Discover attributed Pulse’s performance to the changing economy as the country recovers from the Covid-19 pandemic, which spurred throughput volumes as federal relief dollars have allowed homebound consumers to spend big on groceries and essentials. “Impulse dollar volume was flat year-over-year, primarily due to lower spending on debit products related to the end of federal stimulus programs,” the company said in its report. on the results.
In another sign of pandemic recovery, Diner’s Club, Discover’s travel and entertainment and business card, saw the volume of cards issued outside of North America jump 37% to 8.38 billion. dollars, compared to $6.13 billion in the June 2021 quarter. Discover cited “improvement in global T&E spending” for the increase.
Discover’s network partner volume totaled $11.5 billion, up 22% from $9.47 billion a year earlier.
Discover’s payments business, which is overshadowed by the parent company’s credit card and student loan operations, is “an underutilized asset,” wrote Robert Napoli, equity analyst at William Blair & Co., based in Chicago, which covers payments, in a research report. Thursday. Discover partners with US merchant acquirers and overseas processors to increase acceptance of its cards, and its network now has more than 48 million merchants and 2 million ATMs, Napoli said. “The company continues to invest to build[d] its footprint of acceptance, especially internationally,” said Napoli. He noted that a Discover deal signed last month with the Italian processor ATM should give the company’s cards near-universal acceptance throughout Italy.
Despite the payments unit’s generally strong performance in the second quarter, Discover’s stock was trading down 9% late Thursday morning, possibly due to investor uncertainty about a pause in the repurchase program company stock and an internal investigation into compliance and service issues involving student loans. , according to the report by William Blair.