User:J~enwiki/Sandbox/Discover Financial

Discover Financial Services (nyse: DFS) is an American financial services company, which issues the Discover Card and operates the Discover and Pulse networks. Discover Card is the third largest credit card brand in the United States, when measured by cards in force, with nearly 51 million cardholders.

The Discover Card was originally introduced by Sears in 1985, and was a unit of Dean Witter, which merged with Morgan Stanley in 1997. In 2007, the unit was spun off as an independent, publicly traded company. Today, Discover is headquartered in the Chicago suburb of Riverwoods, Illinois.

In the United States, Discover, as a card brand, competes primarily with Visa, MasterCard, and American Express. Unlike Visa and MasterCard, Discover directly issues its cards, through its Discover Bank unit. Discover is the fourth largest credit card issuer, when measured by card balances, behind Bank of America, JPMorgan Chase, and Citi, and ahead of Capital One and American Express.

In addition to its card products, Discover also markets savings products, home loans, and student loans. The company also began offering a Discover Debit card product directly to banks in 2006, through its Pulse interbank network, which Discover acquired in 2004.

In the United Kingdom, Discover issues Goldfish credit cards, through the MasterCard network. Goldfish, which was formerly part of Lloyds, was acquired by Morgan Stanley in 2005, and was retained as a division of the Discover after its separation from Morgan Stanley.

History
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 & Company (real estate) in 1981, as an attempt to add financial services to its portfolio of customer services. Together with the Discover Card, this was named the Sears Financial Network. Early Discover Cards bore a small embossed symbol representing the Sears Tower, the company's headquarters at the time.

Unlike other attempts at creating a credit card to rival MasterCard and VISA, such as Citibank's Choice card, which was test-marketed prior to the introduction of the Discover Card but reissued as a Visa card in late 1987, 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 (as high as 1%), depending on how much the card was used. The Discover Card was also noteworthy for being the only credit card accepted by the U.S. Customs Service to pay customs duty.

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. After Discover was introduced, Sears stopped accepting competing credit cards, alienating customers and adversely affecting sales.

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 again. The Discover Card became part of the Dean Witter financial services firm. Dean Witter Discover merged with Morgan Stanley in 1997.

Discover Card also has a sign located on the top of One Times Square below the flagpole which drops the New Year's ball. It displays information and new offers for the company and also displays the countdown during the New Year celebration.

Developments
In October of 2004, the Supreme Court upheld a ruling in Discover Card's favor that challenged exclusionary policies of Visa and MasterCard. In 2005, Discover Card acquired PULSE, an EFT association, allowing it to issue and market debit and ATM cards. 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.

Shortly after the 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.

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.

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 September 2007. The spin-off was finalized ahead of schedule, on June 30, 2007.

Brand Acceptance
Discover Card has over 50 million cardmembers and the Discover Network has more than 4 million merchant and cash access locations. The Pulse ATM network currently serves more than 4,100 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 pay off the debt, in person, at any Sears store.

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 and American Express. ATM service offered by Discover is not currently available in Canada although cardmembers apparently could access cash at any Sears Canada store.

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.

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 are any plans to eventually expand acceptance to the other nations where the CUP network is in place, i.e. Philippines, Singapore, Thailand, and South Korea. A similar agreement was made in August, 2006, when the Discover Network announced an alliance with Japan’s 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 China UnionPay Cards will be accepted on the Discover Network in the United States, Canada, Mexico, Central America and the Caribbean starting November 1, 2007.

On August 24, 2006, Discover’s PULSE network and the UK’s LINK ATM network announced a reciprocal agreement that will allow the 4,200 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 an additional 250,000 PULSE cash machines in the United States.

Discover also issues credit cards on the MasterCard network under both Goldfish and Morgan Stanley brands in the United Kingdom.