Diners Club North America and MasterCard International today announced they have signed a final agreement to enact an alliance that bolsters Diners Club global acceptance from 8.3 million vendors to 22 million.
The two payment players this year will begin phasing in new Diners Club cards, which will be branded with the MasterCard logo. Diners Club beginning in November will transition Canada-based cardholders. By year-end, Diners Club expects to issue the co-branded cards to new U.S. clients, followed by existing U.S.-based clients. Diners Club, with existing clients including AIG, BP, Deloitte and KPMG, would not provide a specific timeline nor comment further on the deal. As such, financial arrangements between MasterCard and Diners Club, as well as which card supplier will provide reporting to clients, are not yet clear.
The two payment vendors in April confirmed they were pursuing an acceptance alliance
(BTN, April 26), which followed years of dwindling volume and marketshare for Diners Club. Corporate customers expressed optimism and noted a clear benefit to the expanded acceptance, which prior to the deal was estimated as the lowest among corporate card issuers.
Industry observers expect the new partnership to offer a lift to what oft is considered the forefather of the modern corporate charge card. "There is no disputing that this bold move will put Diners back in the mix of the highly competitive card business," said John Ohaver, a consultant Management Alternatives and a former Diners Club employee.