Discover Financial Services is an American

financial services Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, ...

company that owns and operates Discover Bank, which offers checking and

savings account A savings account is a bank account at a retail bank. Common features include a limited number of withdrawals, a lack of cheque and linked debit card facilities, limited transfer options and the inability to be overdrawn. Traditionally, transa ...

s, personal loans, home equity loans,

student loan A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest r ...

s and

credit card A credit card is a payment card issued to users (cardholders) to enable the cardholder to pay a merchant for goods and services based on the cardholder's accrued debt (i.e., promise to the card issuer to pay them for the amounts plus the ...

s. It also owns and operates the Discover and

Pulse In medicine, a pulse represents the tactile arterial palpation of the cardiac cycle (heartbeat) by trained fingertips. The pulse may be palpated in any place that allows an artery to be compressed near the surface of the body, such as at the n ...

networks Network, networking and networked may refer to: Science and technology * Network theory, the study of graphs as a representation of relations between discrete objects * Network science, an academic field that studies complex networks Mathematics ...

, and owns

Diners Club International Diners Club International (DCI), founded as Diners Club, is a charge card company owned by Discover Financial Services. Formed in 1950 by Frank X. McNamara, Ralph Schneider, Matty Simmons, and Alfred S. Bloomingdale, it was the first independent ...

Discover Card Discover is a credit card brand issued primarily in the United States. It was introduced by Sears in 1985. When launched, Discover did not charge an annual fee and offered a higher-than-normal credit limit, features that were disruptive to the ...

is the third largest

brand in the United States, when measured by cards in force, with nearly 50 million cardholders. Discover is currently headquartered in the

Chicago (''City in a Garden''); I Will , image_map = , map_caption = Interactive Map of Chicago , coordinates = , coordinates_footnotes = , subdivision_type = List of sovereign states, Count ...

suburb of

Riverwoods, Illinois Riverwoods is a village in Lake County, Illinois, United States. It was established on the banks of the Des Plaines River in 1959 by local steel magnate Jay Peterson. Per the 2020 census, the population was 3,790. The corporate headquarters ...

History

In 1981,

Sears Sears, Roebuck and Co. ( ), commonly known as Sears, is an American chain of department stores founded in 1892 by Richard Warren Sears and Alvah Curtis Roebuck and reincorporated in 1906 by Richard Sears and Julius Rosenwald, with what began a ...

purchased the

Dean Witter Reynolds Dean Witter Reynolds was an American stock brokerage and securities firm catering to a variety of clients. Prior to the company's acquisition, it was among the largest firms in the securities industry with over 9,000 account executives (ranking ...

brokerage firm organization and Coldwell, Banker & Company (real estate franchise) as an attempt to add financial services to its portfolio of customer services. In 1985, Sears also acquired the Greenwood Trust Company. Altogether, these companies operated as a Sears subsidiary called Dean Witter Financial Services Group, Inc. The plan to create a one-stop financial-services center in Sears stores was not as successful as Sears had hoped. Its credit card operations accounted for a loss of $22 million in the fourth quarter of 1986, and a loss of $25.8 million in the first quarter of 1987. On March 1, 1993, Sears sold off its financial services branch as a new independent publicly traded company called Dean Witter, Discover & Co. with Dean Witter Reynolds in charge. This company had a stock ticker symbol of DWD. In 1995, Discover Card Services, Inc. changed its name to NOVUS Services, Inc. to distinguish its network functions from the

. In 1997, this company merged with investment banking house

Morgan Stanley Morgan Stanley is an American multinational investment management and financial services company headquartered at 1585 Broadway in Midtown Manhattan, New York City. With offices in more than 41 countries and more than 75,000 employees, the fir ...

to become Morgan Stanley Dean Witter, Discover & Co. Olddiscover

On February 1, 1999, the company rebranded itself as Discover Financial Services, Inc. The NOVUS logo was retired, replaced by the Discover Network logo. In April 2005, Morgan Stanley announced that it would divest Discover Financial Services as an independent company within six months. By June, industry sources reported that Morgan Stanley was reassessing its plan to spin off Discover. In August, the company confirmed it would not sell Discover. However, on December 19, 2006, during a fourth quarter earnings report, Morgan Stanley CEO John J. Mack announced Discover would be spun off as a standalone publicly traded company by the end of August 2007, stating that both companies will be better positioned for growth and success as separate entities. Ahead of schedule on June 30, 2007, Discover was spun off as an independent, publicly traded company. It began trading on the NYSE for the first time on July 2 as DFS.

Acquisitions

Acquisition of The Greenwood Trust Company

The Greenwood Trust Company was founded on August 30, 1911, and was based in

Greenwood, Delaware Greenwood is a town in Sussex County, Delaware, United States. The population was 973 at the 2010 census, an increase of 16.2% over the previous decade. It is part of the Salisbury, Maryland-Delaware Metropolitan Statistical Area. History The ...

. It was acquired in 1985 and renamed Discover Bank on August 1, 2000. Discover Bank is mainly an online financial institution that offers many financial services such as checking accounts, savings accounts, and money market accounts. However the first and original location of the Greenwood Trust Company on 502 East Market Street is still operating and is the only physical banking location of Discover Bank. Discover Bank operates as a subsidiary of Discover Financial Services and is FDIC insured.

Acquisition of Pulse

In 2005, Discover Financial Services acquired

, an interbank

electronic funds transfer Electronic funds transfer (EFT) is the electronic transfer of money from one bank account to another, either within a single financial institution or across multiple institutions, via computer-based systems, without the direct intervention of b ...

payments network. This allowed Pulse and its more than 4,000 member banks, credit unions, and savings institutions to join with the Discover Network's 4 million merchant and cash access locations. Additionally DFS now had the ability to market and issue debit and ATM cards. On February 13, 2006, DFS announced that it would begin offering Discover

debit card A debit card, also known as a check card or bank card is a payment card that can be used in place of cash to make purchases. The term '' plastic card'' includes the above and as an identity document. These are similar to a credit card, but ...

s to other financial institutions, becoming the first credit card services company to compete directly with MasterCard and Visa in the rapidly growing signature debit market.

Acquisition of Diners Club International

In April 2008, Discover Financial and

Citigroup Citigroup Inc. or Citi ( stylized as citi) is an American multinational investment bank and financial services corporation headquartered in New York City. The company was formed by the merger of banking giant Citicorp and financial conglomera ...

announced that Discover was purchasing the

network from Citigroup for $165 million. In May 2008, the

Federal Trade Commission The Federal Trade Commission (FTC) is an independent agency of the United States government whose principal mission is the enforcement of civil (non-criminal) antitrust law and the promotion of consumer protection. The FTC shares jurisdiction o ...

approved the transaction and it was finalized on July 1, 2008. Discover stated that the Diners Club network, which is a major network outside the United States, will be merged with the Discover Network, a major network in the United States. The creation of an international network for Discover and Diners Club cardholders allowed customers to expand their global reach. Diners Club cards will continue to be issued by Diners Club International licensees. At this time, Discover Bank has no plans on issuing Diners Club branded cards itself.

Acquisition of Student Loan Corporation

On September 17, 2010, Discover Financial Services announced it would acquire Citigroup-owned Student Loan Corporation for $30/share. The deal was finalized on December 31, renamed Discover Student Loans, and expanded DFS's market presence and origination capabilities in private student loans. In 2014, DFS launched Rewards for Good Grades, rewarding college and graduate students who get at least a 3.0 GPA (or equivalent) a one-time cash reward equal to 1% of the loan amount on each new Discover student loan. In 2015, DFS introduced an interactive tool called FAFSA assistant to help students and their families get ready to complete the FAFSA. The tool provides individualized tips and guidance based on personal situations.

Acquisition of Home Loan Center

On June 6, 2012, Tree.com, Inc. completed the sale of substantially all of the operating assets of its Home Loan Center, Inc. business to a wholly owned subsidiary of Discover Financial. In exchange for the assets sold, Discover paid an aggregate of $45.9 million including payments made prior to the closing which were applied to the closing price. On June 12, 2012, Discover began originating mortgages with its launch of Discover Home Loans, offering prime variable- and fixed-rate conventional and FHA home mortgage loans. The Home Loans business was later sold in 2015.

Business developments

In 1989, Discover Network signs its 1 millionth merchant, a restaurant called Vincente's Restaurant in Wilmington, Delaware. In 1995, DiscoverCard.com was launched where consumers could apply for credit cards, pay bills, redeem rewards, receive email reminders, and earn extra rewards through online retail partners. On December 22, 1998, the company introduced Discover Platinum, a premium card featuring new ways to increase rewards, low balance transfer and annual percentage rates, no annual fee, and expanded credit lines. On December 21, 2001, fourth-quarter income at Discover grew 31% to $193 million, compared with $147 million the year before. In 2002, Discover launched the industry's first keychain credit card. It was named the Discover 2GO Card and was recognized as one of the "Best Products of 2002" by editors and reporters from Business Week and USA Today. On March 5, 2002, the company announced that the Account Center at Discovercard.com had registered over eight million card members, an increase of 61% since January 2001. On September 1, 2002, Discover announced that Citibank would accept the Discover® Card for cash advances at its approximately 450 Financial Centers and more than 2,000 ATM locations nationwide. In 2003, Discover introduced gas and miles rewards cards. The Gasoline Card (renamed Open Road in 2007) awarded 5% Cashback Bonus on gas purchases. The Miles Card by Discover card allowed redemption with as little as 2,500 miles for non-flight reward options. Discover also introduced the option for paperless statements to minimize the impact on the environment and reduce clutter for customers. In October 2004, the

Supreme Court A supreme court is the highest court within the hierarchy of courts in most legal jurisdictions. Other descriptions for such courts include court of last resort, apex court, and high (or final) court of appeal. Broadly speaking, the decisions of ...

upheld a ruling in Discover's favor that challenged exclusionary policies of Visa and MasterCard, stating that Mastercard and Visa were violating antitrust regulations with anticompetitive practices. Before this ruling, Visa and MasterCard would not allow banks to issue a Discover or American Express card if they issued a Visa or MasterCard. Within days of the court ruling, Discover filed a lawsuit in federal court seeking damages from Visa and MasterCard. In October 2008, DFS was awarded $2.75 billion in damages, the third largest settlement at the time in U.S. history. Shortly after the

ruling, Discover struck its first deal to have its cards issued by another financial institution,

GE Consumer Finance GE Capital is the financial services division of General Electric. The company currently only runs one division, GE Energy Financial Services. It had provided additional services in the past; however, those units were sold between 2013 and 2018 ...

, which began to issue credit cards for retailer

Walmart Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...

and its wholesale warehouse stores,

Sam's Club Sam's West, Inc. (doing business as Sam's Club) is an American chain of membership-only retail warehouse clubs owned and operated by Walmart Inc., founded in 1983 and named after Walmart founder Sam Walton as Sam’s Wholesale Club. , Sam's C ...

. Transactions were processed on the Discover Network. Sam's Club exclusively accepted Discover for many years; since November 2006, it has also accepted MasterCard for purchases. In April 2014, Walmart announced that they were ending their relationship with Discover and would begin converting all Discover-branded cards to Mastercard beginning in June 2014.

HSBC HSBC Holdings plc is a British multinational universal bank and financial services holding company. It is the largest bank in Europe by total assets ahead of BNP Paribas, with US$2.953 trillion as of December 2021. In 2021, HSBC had $10.8 tr ...

has issued Discover-branded credit cards processed through the Discover Network since its acquisition of card issuer Metris in late 2005. Metris had originally signed an agreement with Discover in September 2005, three months prior to the HSBC acquisition. In 2006, Discover Network united with Visa, MasterCard, American Express, and JCB to form the Payment Card Industry (PCI) Security Standards Council, which helps to manage the ongoing payment account security throughout the transaction process. In this same year, DFS also launched the Discover Business Card, offering a single payment solution for small business owners. On July 14, 2006, DFS and First Data Corp., a global leader in electronic commerce and payment services, announced that First Data would offer Discover Network card services to small- and mid-sized merchants. On March 13, 2007, Discover Financial Services announced the Discover Motiva card, the credit card that gives cardmembers cash rewards for making six on-time monthly payments in a row. This card was the industry's first credit card to give cash rewards for good credit management. Later in the year, DFS announced the Discover More card to replace the Discover Platinum card. The Discover More card was designed for consumers who use credit in many different categories and provided them with more ways to earn cash back on their purchases. Following the 2007–08 financial crisis, Discover received about $1.2 billion in bailout funds under the

Troubled Asset Relief Program The Troubled Asset Relief Program (TARP) is a program of the United States government to purchase toxic assets and equity from financial institutions to strengthen its financial sector that was passed by Congress and signed into law by President ...

(TARP). The company announced in 2010 that it had received approval to pay back the funds. In 2009, Discover Financial Services introduced the Spend Analyzer tool, an innovative easy-to-use online tool that provides cardmembers with a visual representation of their Discover card purchases for the past 24 months. In 2010, Discover Financial Services and Softcard announced a strategic partnership to build a mobile payment network that utilizes mobile phones to make point-of-sale purchases. In September 2012, Discover Financial Services was ordered to pay over $200 million in fines and customer reimbursements to settle accusations by U.S. federal regulators that it had engaged in deceptive telemarketing tactics. In 2012, Discover Financial Services announced a five year, $10 million commitment called Pathway to Financial Success to help bring financial education curriculum to public high schools across the U.S. In 2013, Discover Financial Services and PayPal partnered to enable millions of participating merchants to accept PayPal easily through their existing relationship with Discover. In the same year, Discover Cashback Checking was introduced. This checking account product paid customers 10 cents for every debit card purchase, online bill payment, and check written. Additionally in this same year, the Discover it card was announced. The card rewards cardmembers with 5% cash back in rotating categories each quarter like gas and restaurants. Discover also introduced Discover Home Equity Loans, offering homeowners the opportunity to simplify their finances inclusive of supporting home improvement projects, paying for major expenses, or consolidating debt into a single, fixed monthly payment. Discover also became the first major credit card issuer to provide free access to FICO Credit Scores based on TransUnion data directly to its cardmembers on their monthly statements. Additional information provided with their FICO Credit Scores were educational content to help them better understand their scores. In 2014, Discover Financial Services launched Discover it Chrome for Students, allowing students to establish credit while earning 2% at gas stations and restaurants. In 2015, Discover Financial Services launched Discover it Miles, which rewards 1.5 miles per dollar spent. In 2016, Discover Financial Services launched Discover it Secured for consumers looking to build their credit. Additionally, DFS expanded FICO Credit Scores based on Experian data for free to everyone via a platform called Credit Scorecard, which also included a summary of the data that helps determine an individual's FICO Credit Score. In 2017, Discover Financial Services launched a free service called Discover Identity Alerts to notify cardmembers if their social security numbers are found on risky websites and if any new accounts are opened on their Experian credit report. All of these services are offered at no cost and do not impact credit scores. In 2018, Discover Financial Services announced a change to its checking account rewards program, a new industry-leading reward of 1% cash back on up to $3,000 in qualifying debit card purchases each month. Additionally DFS also introduced First Fee Forgiveness, a new program that automatically waives the first eligible fee each calendar year for certain Discover accounts. Eligible fees included in the program were inclusive of insufficient funds, stop payment, excessive withdrawal and Money Market minimum balance fees. For its U.S.-based employees, DFS launched the Discover College Commitment, which offers employees a full ride bachelor's degree program covering tuition, required fees, books, and supplies to select online degrees. On September 12, DFS launched the Discover it Business credit card, offering unlimited 1.5% cash back on all purchases, as well as free business and security features. In 2019, Discover Financial Services' subsidiary Discover Bank eliminated most fees on all of its deposit products. Additionally, Discover Home Equity Loans surpassed $1 billion in funded loans, helping over 20,000 homeowners with their financial goals. DFS also launched contactless cards this year. In 2021, Discover Bank originated 14,148 mortgages worth $1.3 billion.

Discover Global Network

Discover Financial Services has 3 payment systems that make up its Discover Global Network:

Discover Network Discover is a credit card brand issued primarily in the United States. It was introduced by Sears in 1985. When launched, Discover did not charge an annual fee and offered a higher-than-normal credit limit, features that were disruptive to the ...

, and

. Since 2005, to increase acceptance of its payment cards around the world, Discover has formed several agreements with other payment networks internationally. This allows Discover cardholders to perform transactions while traveling abroad. Vice versa, cardholders of other countries may utilize their cards at U.S. merchants and financial institutions that accept Discover. Some major credit and debit partners include: *

worldwide *

BC Card BC Card (Hangul: 비씨카드) is a South Korean financial services company headquartered in Seoul. South Korea's largest payment processing company, it provides end-to-end payment services, primarily to financial institutions, as well as to loca ...

in South Korea * JCB in Japan *

UnionPay UnionPay (), also known as China UnionPay () or by its abbreviation, CUP or UPI internationally, is a Chinese state-owned financial services corporation headquartered in Shanghai, China. It provides bank card services and a major card sc ...

in China *DinaCard in Serbia *

Elo Elo or ELO may refer to: Music * Electric Light Orchestra, a British rock music group ** ''The Electric Light Orchestra'' (album), the group's debut album ** ''ELO 2'', the group's second album * ELO Part II, an offshoot band of Electric Light ...

in Brazil *Mercury in the United Arab Emirates *

RuPay RuPay ''(portmanteau of Rupee and Payment)'' is an Indian multinational financial services and payment service system, conceived and launched by the National Payments Corporation of India (NPCI) on 26 March 2012. It was created to fulfil th ...

in India *

Troy Troy ( el, Τροία and Latin: Troia, Hittite: 𒋫𒊒𒄿𒊭 ''Truwiša'') or Ilion ( el, Ίλιον and Latin: Ilium, Hittite: 𒃾𒇻𒊭 ''Wiluša'') was an ancient city located at Hisarlik in present-day Turkey, south-west of Ç ...

in Turkey * Verve in Nigeria Some major debit partners include: *AFS in the Middle East and North Africa region *Areeba in Lebanon * ATH in Puerto Rico *Bcard in Bulgaria *Cabal in Argentina, Uruguay, Paraguay, and Brazil * Dutch-Bangla Bank in Bangladesh *Eazy in Bahrain *

Interac Interac is a Canadian interbank network that links financial institutions and other enterprises for the purpose of exchanging electronic financial transactions. Interac serves as the Canadian debit card system and the predominant funds transf ...

in Canada *Jonet in Jordan *NAPAS in Vietnam *NCCC in Taiwan * PayNet in Malaysia *Prosa in Mexico * Saudi Payments in Saudi Arabia *SIBS with 10 countries in Europe and Africa With these and many other global partnerships, Discover is accepted in 200+ countries and territories.

Advertising

From 1998 to 2007, Discover Card owned a billboard at

One Times Square One Times Square (also known as 1475 Broadway, the New York Times Building, the New York Times Tower, or simply as the Times Tower) is a 25-story, skyscraper on Times Square in the Midtown Manhattan neighborhood of New York City. Designed by ...

, just above the flagpole where the

Times Square Ball The Times Square Ball is a time ball located in New York City's Times Square. Located on the roof of One Times Square, the ball is a prominent part of a New Year's Eve celebration in Times Square commonly referred to as the ball drop, where the ...

is placed, until

Toshiba , commonly known as Toshiba and stylized as TOSHIBA, is a Japanese multinational conglomerate corporation headquartered in Minato, Tokyo, Japan. Its diversified products and services include power, industrial and social infrastructure systems, ...

bought the space. As a result, its logo could be seen on national television during

New Year's Eve In the Gregorian calendar, New Year's Eve, also known as Old Year's Day or Saint Sylvester's Day in many countries, is the evening or the entire day of the last day of the year, on 31 December. The last day of the year is commonly referred to ...

, while the ball dropped. Discover also sponsored the ball drop itself. From its opening in 2001 to 2012, Sugarloaf Mills Mall in

Lawrenceville, Georgia Lawrenceville is a city in and the county seat of Gwinnett County, Georgia, United States. It is a suburb of Atlanta, located approximately northeast of downtown. As of the 2020 census, the population of Lawrenceville was 30,629. In 2019, th ...

, was named Discover Mills in a

naming rights Naming rights are a financial transaction and form of advertising or memorialization whereby a corporation, person, or other entity purchases the right to name a facility, object, location, program, or event, typically for a defined period of ...

partnership with Discover Card. The slogan for the mall was "Where Discover Card is the Smart Choice." It was the first shopping mall to have granted naming rights to interested companies. Since 2008, Discover has been the official credit-card partner of the

National Hockey League The National Hockey League (NHL; french: Ligue nationale de hockey—LNH, ) is a professional ice hockey sports league, league in North America comprising 32 teams—25 in the United States and 7 in Canada. It is considered to be the top ranke ...

. As part of this deal, Discover offers team- and league-branded credit cards as well as a 10% discount on purchases made from the NHL's online store using Discover. In 2011 and 2012, Discover participated and won the Grand Marshal award for excellence in creative concept and design in the Tournament of Roses Parade in Pasadena. From 2011 to 2013, Discover was the sponsor of the college football Orange Bowl. In 2013, Discover was the sponsor of the BCS National Championship. In 2017, Discover was named the first ever presenting sponsor and official credit card of the Big Ten Football Conference and Championship Game as part of a multi-year sponsorship.

Business

In addition to its card products, Discover Financial Services also markets savings products,

checking accounts A transaction account, also called a checking account, chequing account, current account, demand deposit account, or share draft account at credit unions, is a deposit account held at a bank or other financial institution. It is available to the ...

personal loan Personal may refer to: Aspects of persons' respective individualities * Privacy * Personality * Personal, personal advertisement, variety of classified advertisement used to find romance or friendship Companies * Personal, Inc., a Washington, ...

student loans A student loan is a type of loan designed to help students pay for post-secondary education and the associated fees, such as tuition, books and supplies, and living expenses. It may differ from other types of loans in the fact that the interest ...

, identity protection, and home equity loans.

Competitors

In the United States, Discover, as a card network, competes primarily with Visa, MasterCard, and

American Express American Express Company (Amex) is an American multinational corporation, multinational corporation specialized in payment card industry, payment card services headquartered at 200 Vesey Street in the Battery Park City neighborhood of Lower Man ...

. Unlike Visa and MasterCard, Discover directly issues its cards as both the card network and associated bank, through its Discover Bank unit. When measured by card balances, Discover is the sixth largest credit card issuer in the U.S. behind

JPMorgan Chase JPMorgan Chase & Co. is an American multinational investment bank and financial services holding company headquartered in New York City and incorporated in Delaware. As of 2022, JPMorgan Chase is the largest bank in the United States, t ...

Bank of America The Bank of America Corporation (often abbreviated BofA or BoA) is an American multinational investment bank and financial services holding company headquartered at the Bank of America Corporate Center in Charlotte, North Carolina. The bank ...

Capital One Capital One Financial Corporation is an American bank holding company specializing in credit cards, auto loans, banking, and savings accounts, headquartered in McLean, Virginia with operations primarily in the United States. It is on the li ...

and American Express, and ahead of

Wells Fargo Wells Fargo & Company is an American multinational financial services company with corporate headquarters in San Francisco, California; operational headquarters in Manhattan; and managerial offices throughout the United States and intern ...

and

U.S. Bank U.S. Bancorp (stylized as us bancorp) is an American bank holding company based in Minneapolis, Minnesota, and incorporated in Delaware. It is the parent company of U.S. Bank National Association, and is the fifth largest banking institution i ...

."Q1 2016: U.S. Credit Card Issuer Snapshot"
Retrieved November 28, 2016.

References

External links

Discover Financial Services official corporate site

Discover all services official site

Discover Network official merchant, acquirer, and issuer services site
{{authority control American companies established in 1985 Companies based in Lake County, Illinois Companies listed on the New York Stock Exchange Corporate spin-offs Credit card issuer associations Financial services companies established in 1985 Financial services companies of the United States Online banks Riverwoods, Illinois