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Discover Financial Services  (DFS)
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Discover Financial Services's

Competitiveness


 

DFS Sales vs. its Competitors Q3 2021



Comparing the results to its competitors, Discover Financial Services reported Total Revenue increase in the 3 quarter 2021 by 31.98 % year on year.
The revenue growth was below Discover Financial Services's competitors average revenue growth of 48.28 %, recorded in the same quarter.

List of DFS Competitors

With net margin of 40.7 % company achieved higher profitability than its competitors.

More on DFS Margin Comparisons



Revenue Growth Comparisons




Net Income Comparison


Discover Financial Services Net Income in the 3 quarter 2021 grew year on year by 36.84 %, slower than its competitors income growth of 70.41 %

<<  More on DFS Income Comparisons


Discover Financial Services's Comment on Competitors and Industry Peers


We compete with other consumer financial services providers and payment networks on the basis of a number of factors, including brand, reputation, customer service, product offerings, incentives, pricing and other terms. Our credit card business also competes on the basis of reward programs and merchant acceptance. We compete for accounts and utilization with cards issued by other financial institutions (including American Express, Bank of America, Capital One, JPMorgan Chase and Citi) and, to a lesser extent, businesses that issue their own private label cards or otherwise extend credit to their customers. In comparison to our largest credit card competitors, our strengths include cash rewards, conservative portfolio management and strong customer service. Competition based on cash rewards programs, however, has increased in recent years. Our student loan product competes for customers with Sallie Mae and Wells Fargo, as well as other financial institutions that offer student loans. Our personal loan product competes for customers primarily with JPMorgan Chase, Capital One, Wells Fargo and Citi. Our home loan product competes for customers primarily with traditional lending institutions, namely Wells Fargo, Bank of America, JPMorgan Chase and Citi, which operate in multiple distribution channels, including direct to consumer. Our home loan product also faces additional competition from direct lending websites owned and operated by other online lenders that originate the bulk of their loans through their websites or by phone. Our home equity product faces competition primarily from traditional branch lending institutions like Wells Fargo, JP Morgan Chase, US Bank and PNC.

Although our student and personal loan receivables have increased, our credit card receivables continue to represent most of our receivables. The credit card business is highly competitive. Some of our competitors offer a wider variety of financial products than we do, including automobile loans, which may currently position them better among customers who prefer to use a single financial institution to meet all of their financial needs. Some of our competitors enjoy greater financial resources, diversification and scale than we do, and are therefore able to invest more in initiatives to attract and retain customers, such as advertising, targeted marketing, account acquisitions and pricing offerings in interest rates, annual fees, reward programs and low-priced balance transfer programs. In addition, some of our competitors have assets such as branch locations and co-brand relationships that may help them compete more effectively. Another competitive factor in the credit card business is the increasing use of debit cards as an alternative to credit cards for purchases.

Because most domestically issued credit cards, other than those issued on the American Express network, are issued on the Visa and MasterCard networks, most other card issuers benefit from the dominant market share of Visa and MasterCard. The former exclusionary rules of Visa and MasterCard limited our ability to attract merchants and credit and debit card issuers, contributing to Discover not being as widely accepted in the U.S. as Visa and MasterCard. Merchant acceptance of the Discover card has increased in the past several years, both in the number of merchants enabled for acceptance and the number of merchants actively accepting Discover. We continue to make investments in expanding Discover and Diners Club acceptance in key international markets where an acceptance gap exists.

In our payment services business, we compete with other networks for volume and to attract network partners to issue credit, debit and prepaid cards on the Discover, PULSE and Diners Club networks. We generally compete on the basis of customization of services and various pricing strategies, including incentives and rebates. We also compete on the basis of issuer fees, fees paid to networks (including switch fees), merchant acceptance, network functionality, customer perception of service quality, brand image, reputation and market share. The Diners Club and Discover networks' primary competitors are Visa, MasterCard and American Express, and PULSE's network competitors include Visa's Interlink, MasterCard's Maestro and First Data's STAR. American Express is a particularly strong competitor to Diners Club as both cards target international business travelers. As the payments industry continues to evolve, we are also facing increasing competition from new entrants to the market, such as online networks, telecom providers and other alternative payment providers, which leverage new technologies and a customer's existing deposit and credit card accounts and bank relationships to create payment or other fee-based solutions.

In our direct-to-consumer deposits business, we have acquisition and servicing capabilities similar to other direct competitors, including USAA, Ally Financial, American Express, Capital One (360), Sallie Mae and Barclays. We also compete with traditional banks and credit unions that source deposits through branch locations. We seek to differentiate our deposit product offerings on the basis of brand reputation, convenience, customer service and value.





  

Overall company Market Share Q3 2021

Contrary to strong revenue growth of 31.98 % in Overall company, Discover Financial Services has lost market share within this division.





<<  More on DFS Market Share.
 

*Market share calculated with total revenue.


DFS's vs. Competition, Data

(Revenue and Income for Trailing 12 Months, in Millions of $, except Employees)



COMPANY NAME MARKET CAP REVENUES INCOME EMPLOYEES
Discover Financial Services 11,489 32,386 5,051 14,676
American Express Company 20,542 122,725 2,173 62,800
Western Union Co 5,058 7,034 814 9,000
Visa Inc 24,105 426,996 12,311 8,500
Mastercard Incorporated 17,505 318,889 7,821 10,300
Citigroup inc 70,454 127,164 22,847 241,000
Bank Of America Corporation 87,152 372,579 30,435 224,000
Slm Corp 2,209 5,503 1,287 1,000
Euronet Worldwide Inc 2,891 5,799 144 5,600
Fastfunds Financial Corp 0 0 0 36
Navient Corporation 2,234 3,325 914 7,300
Net 1 Ueps Technologies Inc 123 241 -22 5,701
Xoom Corp 156 0 6 295
Everi Holdings Inc 600 1,987 65 900
First Marblehead Corp 50 0 -40 262
Green Dot Corp 1,387 1,910 34 1,012
Blackhawk Network Holdings, Inc 2,254 2,550 -157 2,331
Nelnet Inc 1,481 3,455 489 3,400
Synchrony Financial 13,549 25,583 4,104 12,000
Veritec Inc 0 2 -1 3
Diebold Nixdorf Incorporated 3,841 633 -141 16,000
Paymentus Holdings Inc 1,070 3,394 -9 5,900
Aci Worldwide Inc 1,291 3,524 85 3,979
Bottomline Technologies Inc 483 1,892 -22 1,600
On Track Innovations Ltd 10 12 -10 120
SUBTOTAL 269,932 1,467,583 88,177 637,715


       
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