J.P. Morgan Doesn't Rule Out Discover Purchase (JPM, DFS)

A J.P. Morgan JPM executive told Reuters today that the bank has not ruled out the possibility of buying the Discover Financial Services DFS network, but conceded a deal would be "very difficult." "Its always an opportunity," Chase Card Services Chief Executive Gordon Smith said in an interview on Wednesday. According to a Reuters report, "Banks earn fees from merchants every time their customers pay for something with a credit or debit card. But the banks must also pay independent payments networks, like Visa and MasterCard, to help them process the transactions." "It's one of those things where you sit down with a piece of paper thinking, it's a great idea, why don't you own your own (network)?" Smith said. But "executionally it's very difficult—not impossible, but it's something we can always think about," he said. Discover is the fourth largest U.S. card processing network, behind Visa V, MasterCard MA, and American Express AXP. Shares of J.P. Morgan are down slightly this afternoon, to $37.73. Discover is up 0.8%, to $15.28.