Discover Card

Article by hi joiney

History br At the time the Discover Card was introduced Sears was the largest retailer in the United States It had purchased the Dean Witter Reynolds Organization brokerage and Coldwell Banker amp Company real estate in 1981 as an attempt to add financial services to its portfolio of customer services Together with the Discover Card and its issuing bank the Greenwood Trust Company owned by Sears this was named the Sears Financial Network Early Discover Cards bore a small embossed symbol representing the Willis Tower the company s headquarters at the time br Discover and Novus retired acceptance mark still seen in many places br Unlike other attempts at creating a credit card to rival MasterCard and VISA such as Citibank s Choice card the Discover Card quickly gained a large national consumer base It carried no annual fee which was uncommon at the time and offered a typically higher credit limit than similar cards Cardholders could earn a Cashback Bonus in which a percentage of the amount spent would be refunded to the account originally 2 now as high as 5 depending on how much the card was used Retailers who were wooed by merchant fees significantly lower citation needed than those of other widely accepted credit cards The Discover Card was also noteworthy for being the only credit card accepted by the U S Customs Service to pay customs duty citation needed br However the plan to create a one stop financial services center in Sears stores was not as successful as Sears had hoped and its promotion of the Discover Card was thought both to hurt Sears turnover and to restrict the card s potential Other retailers resisted it as they believed they would be helping their competitor br In light of these developments and of strong competition both from Wal Mart and from so called category killers such as Toys R Us Sears began to face difficulties in the late 1980s Sears sold its financial businesses in 1993 and began to accept MasterCard and Visa in addition to its store credit card and the Discover Card The Discover Card became part of the Dean Witter financial services firm Dean Witter Discover merged with Morgan Stanley in 1997 In 2000 Greenwood Trust changed its name to Discover Bank br Discover Card had a sign located on the top of One Times Square below the flagpole which drops the New Year s ball until late 2007 It displayed information and new offers for the company and also displayed the countdown during the New Year s celebrations br Business developments br Prepaid card offered by Green Dot Corporation on the Discover Network br In October 2004 the Supreme Court upheld a ruling in Discover Card s favor that challenged exclusionary policies of Visa and MasterCard Before this ruling Visa and MasterCard would not allow banks to issue a Discover Card if they issued a Visa or MasterCard Within days of the court ruling Discover Card filed a lawsuit in federal court seeking damages from Visa and MasterCard In 2005 Discover Card acquired PULSE an electronic funds transfer association allowing it to issue and market debit and ATM cards br Shortly after the 2004 Supreme Court ruling Discover also struck its first deal to have its card issued by another bank GE Consumer Finance which now issues three cards for retailer Wal Mart and its wholesale warehouse stores Sam s Club transactions for both cards are processed on the Discover Network Sam s Club exclusively accepted Discover Card for many years although since November 2006 it has also accepted MasterCard for purchases br HSBC has also issued credit cards processed through the Discover Network and branded with the Discover logo since its acquisition of card issuer Metris in late 2005 Metris had originally signed an agreement with Discover in September 2005 only three months prior to the HSBC acquisition br Morgan Stanley was long thought to want to sell the Discover Card business and in April 2005 it announced that it would divest Discover Financial Services as an independent company within six months However by June industry sources reported that Morgan Stanley was reassessing its plan to spin off Discover Finally in August 2005 the company confirmed it would not sell Discover In yet another reversal in December 2006 Morgan Stanley announced it would again spin off Discover as a standalone company by the end of August 2007 The spin off was finalized ahead of schedule on June 30 2007 br Brand acceptance br Discover Card has over 50 million cardmembers and the Discover Network has more than 4 million merchant and cash access locations The Pulse automatic teller machine ATM network currently serves more than 4 500 banks credit unions and savings institutions However unlike its competitors the Discover Card is neither issued nor widely accepted outside the U S although it can be used to obtain cash from ATM locations worldwide Owing to its heritage at Sears an additional benefit of the Discover Card is the ability to make payments on the account in person at participating Sears stores br In Canada Discover brand cards are accepted at few locations usually at businesses catering to American tourists such as car rental agencies and hotels as well as major American merchants like Sears and Wal Mart Some Canadian businesses do accept Discover cards but opt to favor Visa Mastercard American Express and Interac ATM service offered by Discover is not currently available in Canada although cardmembers apparently could access cash at any Sears Canada store br In the United Kingdom Discover issued credit cards on the MasterCard network under both the Morgan Stanley and Goldfish brands since 1999 with the Goldfish brand being purchased from Lloyds TSB in 2005 The entire business was sold to Barclays on February 7 2008 These cards have since been rebranded as Barclaycard Goldfish and Barclaycard Platinum respectively br While Discover brand cards are not currently accepted in Europe the company s presence continues to grow in Mexico Costa Rica Micronesia the Marshall Islands Belize Palau and many of the Caribbean Island nations The corporate web site FAQ section http www discovercard com customer service faq international html describes specifically where the Discover Card is accepted outside the United States br Additionally in May 2005 Discover Network announced an alliance with China UnionPay Network The two companies have signed a long term agreement that will lead to acceptance of Discover Network brand cards at UnionPay ATMs and point of sale terminals in China and acceptance of China UnionPay cards on the PULSE network in the U S CUP cards have been accepted in the US since December 2005 and Discover Cards have been accepted in China since November 8 2006 This partnership makes Discover Card the most widely accepted American card in China beating out competitors Visa MasterCard and American Express Neither Discover Financial Services nor China UnionPay have stated whether there had any plans to eventually expand acceptance to the other nations where the CUP network is in place i e the Philippines Singapore Thailand Vietnam and South Korea br A similar agreement was made in August 2006 when the Discover Network announced an alliance with Japan JCB Network JCB Cards will be accepted on the Discover Network in the United States Puerto Rico Guam and Northern Mariana Islands starting October 12 2007 and Discover Card will be accepted on the JCB Network in Japan in early 2008 br On August 24 2006 Discover PULSE network and the UK LINK ATM network announced a reciprocal agreement that will allow the more than 4 500 financial institution participants in the PULSE network to offer their cardholders access to all but a handful of the more than 58 000 cash machines across the UK and allow LINK to offer its 38 participating financial institution members access to more than 265 000 PULSE cash machines in the United States br In December 2009 an agreement was formalized with Brazilian credit card processor Redecard to begin accepting Discover Card in Brazil br Discover acquires Diners Club br In April 2008 Discover Financial Services and Citigroup announced that Discover was purchasing the Diners Club network from Citi for 165 million In May 2008 the Federal Trade Commission approved the transaction The deal was completed on July 1 2008 Discover stated that the Diners Club network which is a major network outside North America will be merged with the Discover Network a major network in North America creating an international network for Discover Network cards and Diners Club cards Diners Club cards will continue to be issued by Diners Club International licensees including Citibank Discover Bank has no plans on issuing Diners Club branded cards itself Discover only purchased the network and not the licensees issuing the cards br References br Discover Financial Services 2005 01 12 Merger of Discover Financial Services and Pulse EFT Association closes following Pulse member approval Press release http investorrelations discoverfinancial com phoenix zhtml c 204177 amp p irol newsArticle amp ID 1005801 amp highlight Retrieved 2007 10 22 160 br A Brief Chronology of Sears History Sears Brands LLC http www searsarchives com history chronologies chronology_brief htm Retrieved 2009 08 12 160 br Where can I obtain a cash advance in Canada using my card br Discover Financial Services acquires the UK s Goldfish br Discover Financial Services and China Unionpay Launch Second Phase of Reciprocal Acceptance Agreement br Discover Financial Services and JCB Announce Alliance br Cards Accepted in the United States br PULSE and LINK Networks Sign Reciprocal ATM Cash Machine Agreement br Brazil s Redecard In Pact To Handle Discover Card Transactions December 23 2009 http online wsj com article BT CO 20091223 711643 html 160 br Miller James P 2008 07 01 Discover completes purchase of Diners Club Chicago Tribune http www

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