Diners Club North America and MasterCard International this week confirmed they are "pursuing an alliance in order to provide enhanced global acceptance to Diners Club North America cardmembers," according to a joint statement given to
Business Travel News.
Although there are no changes to the Diners Club offering yet, and cardholders can continue to use the card, Diners will issue cards in North America that "carry the MasterCard brand" and can be accepted wherever MasterCard is accepted, the statement said. "In addition, Diners Club cards issued by Diners Club International franchises around the world would carry the MasterCard identifier on the back of the card, indicating acceptance at merchants in the U.S. and Canada that accept MasterCard credit cards."
MasterCard and Diners Club would not comment further on the deal, which sources said is expected to close and take hold by year-end. Financial arrangements between MasterCard and Diners Club, as well as which card supplier will provide reporting to clients, have not yet been made clear.
According to figures provided by MasterCard and Diners Club in last year's Business Travel Survey
(BTN, May 26, 2003), the deal would drive the number of worldwide merchants that accept Diners Club from 8.3 million to 30 million--the highest acceptance level in the business-surpassing American Express and Visa.
Yet, the deal follows years of declining marketshare and volume at Diners Club. In 1993, Diners claimed a commercial card volume of $22.4 billion--second only to American Express, which at the time boasted $34 billion. Within 10 years, Amex's estimated commercial T&E volume had grown almost threefold, while Diners' was cut by more than half. A former Diners Club executive said the card vendor in 1989 had more than 2 million cards in force, yet estimated that number has declined to fewer than 100,000.