The Quiet Success Of Discover, a Banking UnderdogBy
Trying to expand digital payments into the physical world, PayPal on Wednesday tapped a company that doesn’t exactly come to mind when you think “tech savvy.” It signed up Discover—the lesser-known sibling to Visa and MasterCard—to process its payments at merchants around the country. The deal gives PayPal an instant footprint in 7 million brick-and-mortar retailers, as well as an association with Discover, which has been a quiet success story of late. It’s the second-best performer so far this year among the 81 financial stocks tracked in the S&P 500 Financials Sector index. (If you’re interested, the best performer is Regions Financial, which is rebounding from near insolvency in 2008 to become the last large bank to repay its bailout funds this April.) After news of the PayPal partnership, Discover shares closed at 38.43, their highest level since the company was spun off from Morgan Stanley as a stand-alone company in 2007.
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