What significant change occurred in the Discover Card model in 2007?

In 2007, Discover Card implemented a significant transition to an indirect acquiring model. This change marked a strategic shift in how Discover operates within the payments ecosystem. Under an indirect acquiring model, Discover partners with financial institutions and other entities to process transactions on its behalf, rather than processing all transactions directly. This allows Discover to expand its reach and utilize the existing infrastructure of their partners, facilitating more effective growth and a broader market presence.

The move also aligns with industry trends, as many payment networks have embraced indirect models to enhance operational efficiency and scale. This change provided Discover with the opportunity to integrate more seamlessly into the comprehensive payment landscape, improving service offerings for merchants and cardholders alike.

Understanding this transition is crucial for recognizing how Discover has adapted to the competitive payments environment and how it has positioned itself in relation to other networks.