Discover 2014 Annual Report Download - page 18

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3,700 financial institutions with which PULSE has direct relationships and approximately 3,400 additional financial
institutions through agreements PULSE has with other debit networks. PULSE also provides cash access at 1.6 million
ATMs in 130 countries.
PULSE's primary source of revenue is transaction fees charged for switching and settling ATM, personal
identification number ("PIN") POS debit and signature debit transactions initiated through the use of debit cards issued
by participating financial institutions. In addition, PULSE offers a variety of optional products and services that produce
income for the network, including signature debit transaction processing, debit card fraud detection and risk mitigation
services, and connections to other regional and national electronic funds transfer networks.
When a financial institution joins the PULSE network, debit cards issued by that institution are eligible to be
used at all of the ATMs and PIN POS debit terminals that participate in the PULSE network, and the PULSE mark can be
used on that institution's debit cards and ATMs. In addition, financial institution participants may sponsor merchants,
direct processors and independent sales organizations to participate in the PULSE PIN POS and ATM debit service. A
participating financial institution assumes liability for transactions initiated through the use of debit cards issued by that
institution, as well as for ensuring compliance with PULSE's operating rules and policies applicable to that institution's
debit cards, ATMs and, if applicable, sponsored merchants, direct processors and independent sales organizations.
When PULSE enters into a network-to-network agreement with another debit network, the other network's
participating financial institutions' debit cards can be used at terminals in the PULSE network. PULSE does not have a
direct relationship with these financial institutions and the other network bears the financial responsibility for
transactions of those financial institutions' cardholders and for ensuring compliance with PULSE's operating rules.
Diners Club
Our Diners Club business maintains an acceptance network in over 185 countries and territories through its
relationships with over 80 licensees, which are generally financial institutions. We generally do not directly issue Diners
Club cards to consumers, but grant our licensees the right to issue Diners Club branded cards and/or provide card
acceptance services. Our licensees pay us royalties for the right to use the Diners Club brand, which is our primary
source of Diners Club revenues. We also earn revenue from providing various support services to our Diners Club
licensees, including processing and settlement of cross border transactions. We also provide a centralized service
center and internet services to our licensees.
When Diners Club cardholders use their cards outside the host country or territory of the issuing licensee,
transactions are routed and settled over the Diners Club network through its centralized service center. In order to
increase merchant acceptance in certain targeted countries and territories, we work with merchant acquirers to offer
Diners Club and Discover acceptance to their merchants. These acquirers are granted licenses to market the Diners Club
brands to existing and new merchants. As we continue to work toward achieving full card acceptance across our
networks, Discover customers are using their cards at an increasing number of merchant and ATM locations that accept
Diners Club cards around the world. Diners Club cardholders with cards issued by licensees outside of North America
continue to use their cards on the Discover Network in North America and on the PULSE and Diners Club network
domestically and internationally.
Network Partners Business
We have agreements with a number of financial institutions, networks and commercial service providers for
issuance of products or processing of payments on Discover networks. We refer to these financial institutions, networks
and commercial service providers as "Network Partners." We may earn merchant discount and acquirer assessments
net of issuer fees paid, in addition to other fees, for processing transactions for Network Partners.