Discover to Spend More Than $35 Million on New Credit Cards With Chips

Features Dow Jones Newswires

Discover Financial Services Chief Executive David Nelms said the company will spend more than $35 million in 2015 on new credit cards that contain a computer chip to combat fraud.

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The amount includes the cost of issuing new cards to customers as well as efforts needed to prepare Discover's card-processing network for the cards, he said at a financial-services industry conference.

U.S. card companies are racing to issue the new chip cards that are more difficult to counterfeit than traditional cards containing a magnetic stripe.

Mr. Nelms also said that the Riverwoods, Ill.-based company will spend more than $75 million next year to meet regulatory requirements on anti-money-laundering programs and to comply with the Bank Secrecy Act.

In June, Discover reached an agreement with the Federal Deposit Insurance Corp. to enhance its procedures to prevent money laundering and adopt a revised compliance program for the Bank Secrecy Act.

Discover has disclosed that the Federal Reserve also intends to enter a similar type of agreement with the company.