Are your debit and credit card products competitive in today’s market? In this recorded webinar we uncover the reasons why more and more credit unions are choosing Discover as their credit and debit card solutions provider. You will learn about new growth opportunities for your card portfolio, what’s competitive in today’s market and how your credit union measures up. Learn more at http://www.nafcu.org/discover.

1. Refresh Your Credit Card Program with Discover®
September 15, 2011
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2. Agenda
• Discover® Overview
– Discover® Acceptance
• Industry Payment Trends
• Discover® Brand
• Program Overview
– Credit
– Debit
• Program Support and Benefits
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3. Discover® Overview
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4. Global Payments Provider
• Growing issuance • Fast-growing PIN-based • Global brand known for
business ATM/debit network with service, rewards, and
• Comprehensive 4,500+ participating cardholder benefits
payments solution financial institutions
• In over 185
including credit, debit • All top national PIN countries/territories
and prepaid debit retailers accept
• Millions of premium
• Highest acceptance PULSE2
consumer and corporate
among top 100 • Over 650K ATMs and cardmembers
merchants1 cash access locations many who travel to U.S
• Targeting domestic
acceptance parity with
leading payments
networks by end of 2010
1 STORES, Top100 retailers, 2007
2 Research conducted by PULSE sales dept
3 DFS Internal Data, includes North America
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5. Discover® Global Acceptance Model
• Robust global acceptance network for credit, debit, and ATM through direct
relationships and alliances
• Domestic Point-of-Sale Acceptance at 97% of Visa/MC1
• Domestic ATM coverage at more than 350,000 locations
• Global Acceptance Initiative
– Global cash access at more than 780,000 ATMs
– Coverage in over 80 countries
1. Internal DFS Reporting
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6. Payment Industry Trends
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7. Members Value Your Payment Products the Most
Overall 84%
Credit Card 94%
Debit 94%
HELOC 92%
CD 92% However, only
Mortgage 92% 29% have a
credit card
Checking 89%
through their
Savings 87%
credit union
Car 83%
Source: Javelin Strategy & Research, 05/10, CU n=1,247
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8. How Members Use Their Cards
Transactor – always / almost always pay the entire balance
52%
50%
48%
46% There has been
a large shift
44%
among CU
42%
members from
revolvers to
40% transactors,
making this an
38%
attractive, lower
36%
risk portfolio.
10/09-12/09 11/09-01/10 12/09-02/10 01/10-03/10 02/10-04/10
CU: Average Non-CU: Average CU Non-CU
Source: Millward Brown, Brand Tracking Study, 10/09-04/10, n=7,000
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9. Application Motivators
High
Medium
Low
Source: Javelin Strategy & Research, 05/10, CU n=1,247
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10. Audience Polling Question
Does your credit union offer a rewards program on
your credit card program?
Yes
No
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11. Penetration of Rewards Cards
©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute TNS, State of the Card Market Report, November 2010 11

12. Audience Polling Question
What kind of rewards program does your credit
union offer with your credit card program?
(select all that apply)
Cash Back
Air Miles
Bonus Points (Gift Certificates, Electronics, Merchandise
Merchant Funded Discounts
Rebates
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13. Card Reward Preferences
Trend and Forecast by Types of Credit Card Rewards
(Among Rewards Cardholders)
2007 - 2012
66%
62% 63% 64%
61%
57%
45% 46%
42% 42% 41% 40%
24% 22% 23% 23% 24%
22%
21% 21% 23% 23%
16% 16%
10% 8% 9% 9% 8% 8%
2007 2008 2009 2010 2011 2012
Cash Back Air Miles Bonus Points Discounts Rebates
TNS, Winning Rewards in a Cautious Market, December 2010
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14. Credible and Trustworthy Brand Fit
Credit Union Discover Visa MC
Company that gives you a safe, secure feeling 70% 68% 66% 66%
Leader in the financial services industry 57% 66% 64% 64%
Card I trust 72% 74% 73% 73%
A large, stable, reliable institution 72% 71% 71% 71%
Provides a good value 67% 67% 64% 64%
Best all around card 61% 61% 60% 60%
Rewards customers for using the card 47% 65% 57% 58%
Card is primary because it offers
rewards (among primary 23% 75% 39% 45%
cardholders of each brand)
Credit Union card members are looking for credible, trustworthy financial services brands.
Perceptions of Discover are aligned with Credit Union members.
Source: State of the Card Market Report, 2010 - TNS Financial Services
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15. Discover® Brand
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16. The Discover® Brand – Known for Rewards
15% Best Rewards 15% Easiest to Earn
Program in the Market and Redeem Rewards
10% 10%
9%
7%
3%
2%
Page Source: Commissioned Millward Brown 4Q’ 10 Brand Tracking Survey, 4Q’ 10, N=3,362, respondents drawn from the general population
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17. The Discover® Brand – Seen as Refreshing
Unique Carefree Non-Traditional Different Independent
82%
75% 75%
70%
52% 52%
47%
31%
28% 28%
21% 20%
20% 21%
12%
13%
8% 8% 8% 7%
Page Source: Landor Brand Asset Valuation Study, April 2011. Survey respondents=general population
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18. Program Overview- Credit and Debit
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19. Discover® Comparable Consumer Credit Tiers
MasterCard ®
Discover ®
VISA ®
World Elite/World High Value Premium Plus Signature Preferred
World Premium Signature
Enhanced Rewards Rewards
Standard Core Traditional
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20. Discover® Debit
Highly competitive interchange pricing and low fee structure produce better
economics
What’s In: What’s Out:
All Fees: No Sponsorship Fees
Published No Branding Fees
Transparent No Quarterly Fees
Correlate to monthly issuer
invoice
“All-In Program Fee,” based on
transaction volume, is:
“Pay-as-you-go”
Netted out of issuer
interchange on monthly
invoice
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21. Program Support and Benefits
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22. Unique Enhancements
Spend Analyzer Cash Over
Discover Offers
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23. Unique Enhancements
Discover® Giving
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24. Discover® Turnkey Marketing Support
Turn-key, customizable materials to create attractive integrated campaigns
• Acquisition Programs
• Usage Programs
• Branch Communications
• Educational Materials
• Merchant Funded Offers
• AMPs
• Online Sales Training Tool
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25. NAFCU Member Benefits
• Reduced Issuer Set Up Fee from $15,000 to $1,000
• Waived Issuer Processor Set Up Fee of $15,000
• 100% Transaction Authorization
• Higher Interchange Rates
• Straightforward Fees and Billing
• No Licensing or Membership Fees
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26. Questions
Kristi Lockhart
Discover Financial Services
224-405-5939
kristilockhart@discover.com
www.nafcu.org/discover
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