Digital Transactions Authoritative, insightful and timely information for payments professionals
U.S. servicemembers who use the Military Star credit card will see a change in September as the closed-loop network it uses migrates to the Discover Global Network.
The Exchange Credit Program issues the Military Star card, which is administered by the Army and Air Force Exchange Service, and has approximately 1.6 million cardholders from all branches of the U.S. services. It has operated a credit program for nearly 45 years.
The move to Discover means additional services and providers on military installations will be able to accept the card, including concessionaries, name-brand restaurants, third-party vendors, and some activities that fall under morale, welfare, and recreation efforts.
Cardmembers also will be issued new cards with new card numbers this autumn that will have an EMV chip with contactless payment capability and mobile wallet functionality. Cardholder benefits, such as a low annual percentage rate, 2% rewards, and a 5-cent fuel discount, will remain.
“Because the Exchange Credit Program will remain the issuer of the card, with Discover Global Network, acceptance will be seamless across our nation’s military installations,” Tommy Ward, Exchange Credit Program senior vice president, says in a statement.
Military Star card acceptance fees–of which it had none—also will change then, though the exact fees were not disclosed.
“With the new card, there will be minimal data-transaction costs,” says a spokesperson for the Army and Air Force Exchange Service. “The added convenience of accessing Discover’s network, which does not require development within the closed-loop environment, will be highly advantageous for all locations on military installations to accept the card. These incremental costs will be balanced by the increased accessibility facilitated by access to the Discover network.”
Continuing, “The specific fees assessed will be based on existing acceptance agreements with Military Star and their respective merchant providers. The incremental cost will be outweighed by the ease with which merchants can accept the Military Star card. There is no internal development needed to accommodate the card and merchants retain all of their existing point-of-sale features.”
As for why the move to Discover, Ward says there was a need to improve acceptance. “As the military resale community continues to work closely with third-party providers such as name-brand restaurants, food-delivery services, and other vendors that bring tastes of home to warfighters and families, the Exchange recognized the need to work with a credit-card network to improve acceptance of the Military Star card across the installation.”
