"If we assume our premise that offline penetration is important and necessary, we wonder if one of the aspiring wallets might want more control of the network," Sakhrani wrote.
A tech player looking for more control of its mobile payments business could certainly make excellent use of Discover's payment processing networks, and even cut its risk by making partnerships with payment processors unnecessary. A potential buyer could also benefit by keeping competitors from using Discover's network.
The big question for Discover is whether the payment network's value will be considerably higher as the mobile payment space develops, or whether this is the ideal time to sell. "The argument could be made that you can scale that network significantly more than they have," Sakhrani says, however. "the strategy they have embarked on hasn't materialized -- maybe someone else can take that strategy further."When asked if Discover could still achieve its high double-digit ROE without the payment processing network, Sakhrani says "A big part of their profitability comes from their lending businesses, so probably. The idea over time as they grow out this business is that they should enhance the returns. To the extent they do something with the excess capital, that could be accretive as well." In addition to the three companies above, Sakhrani believes Apple (AAPL - Get Report) could be a potential buyer, as could Microsoft (MSFT). "Neither they