Discover Card Information
Discover Financial Services owns one of the largest credit card networks in the United States and boasts a growing presence internationally. Originally an arm of retailer Sears, Discover cards came along a few decades after Visa, MasterCard and American Express but now competes as a stand-alone business to the established networks. The network also pioneered cash rewards and no annual fee initiatives that cardholders across all networks see today.
The Discover card debuted in 1986, launched via a splashy ad campaign during the year’s Super Bowl. Sears, Roebuck and Co. created the card through its recently acquired Dean Witter Reynolds brokerage firm in the hopes of becoming a giant in the financial services industry. As part of the campaign, Sears stopped accepting competitors Visa and MasterCard in its stores. This ultimately backfired, however, and Sears, amid other economic problems, sold off its financial services branch, run by Dean Witter Reynolds, in 1993. Financial firm Morgan Stanley acquired discover card Witter Reynolds in 1997, and 10 years later, Morgan Stanley spun Discover Financial Services off into an independent public company.
Discover was not the only credit network launched in the 1980s, but it was the only one to gain lasting, widespread traction. The network rose above the fray by bucking some of the common credit card trends at the time. Discover charged no annual fee and offered cash rewards to customers. These benefits stood out in the 1980s even though they now are common across all major card networks and issuers. Discover also distinguished itself by offering higher limits to its customers compared with its competitors. Additionally, the network gained favor among merchants by charging lower fees than its competitors.
Discover is one of the largest credit networks globally, behind Visa, MasterCard and American Express. It also is the sixth-largest credit card issuer in the United States, according to Discover’s 2008 annual report. The Discover card network in 2008 reported a total charge volume of $102 billion through a network of more than 30 issuers. Discover estimates that more than 50 million people have one of its cards.
Discover offers several varieties of cards besides its standard offering. The Discover More card builds reward levels more quickly. The Discover Motiva card offers rewards for on-time payments. Miles by Discover focuses on travel rewards. Although the company is not a major corporate card issuer, it does offer two cards aimed toward small business owners: Discover Business Card and Discover Business Miles Card. Discover also offers prepaid gift cards of between $20 and $500 in value.
Discover does not enjoy the same widespread international acceptance as its competitors, but merchants in some international regions do accept the card. Businesses in the Caribbean accept it fairly widely, and the card’s presence in Mexico is growing. Thanks to a 2005 deal with UnionPay Network of China, Discover is the mostly widely accepted U.S.-based credit card in China. European merchants do not take Discover cards. However, Discover acquired the Diners Club network in 2008, which has wide European acceptance, and it is working to use that network as leverage in Europe. Discover is one of the few issuers that does not charge international transaction fees.