Editing Discover Card

{{short description|Credit card}}
{{Use mdy dates|date=May 2025}}
{{Infobox company
| name = Discover
| logo = Discover Card logo.svg
| logo_size = 175px
| caption = 
| type = [[Subsidiary]]
| genre = [[Credit card]]
| predecessor = 
| successor = Capital One
| foundation = {{Start date and age|1985}}
| founder = [[Sears]]
| location_city = 
| location_country = United States
| location = 
| locations = 
| area_served = United States (primary)
| key_people = 
| industry = [[Financial services]]
| products = [[Credit card]], [[Finance]], Payment Loans
| services = {{flat list|
*[[Credit card]]
*[[Finance]]
}}
| revenue = 
| net_income = {{increase}} US$2.393 billion (2016)
| operating_income = {{up}} US$3.6 billion (2016)
| aum = 
| assets = {{up}}
| equity = 
| owner = 
| num_employees = See [[Discover Financial|Former Parent company]]
| parent = [[Dean Witter Reynolds]]<br />(1985–1997)<br />[[Morgan Stanley]] (1997–2007)<br />[[Discover Financial]]<br />(2007–2025)<br />[[Capital One]]<br />(2025–present)
| divisions = Discover Bank
| subsid = 
| homepage = {{URL|https://www.discover.com/credit-cards|discover.com/credit-cards}}
| footnotes = 
}}

'''Discover''' is a [[credit card]] brand issued primarily in the United States. It was introduced by [[Sears]] in 1985 and currently issued by [[Capital One]]. Discover was the first credit card that did not charge an annual fee and offered a higher-than-normal credit limit. A subsequent innovation was "Cashback Bonus" on purchases.<ref>Vasquez, Jose. [https://www.gobankingrates.com/credit-cards/history-discover-card/ “History of Discover Card”]. January 8, 2009. Retrieved 2016-11-28.</ref>

Most cards with the Discover brand are issued by [[Discover Financial|Discover Bank]], formerly the Greenwood Trust Company.  Discover transactions are processed through the [[Payment system|Discover Network]]. In 2005, Discover Financial Services acquired [[Pulse (interbank network)|Pulse]], an [[electronic funds transfer]] network, allowing it to market and issue debit and ATM cards. In February 2006, Discover Financial Services announced that it would begin offering Discover [[debit card]]s to other financial institutions, made possible by the acquisition of Pulse.<ref>{{cite press release
|title=Merger of Discover Financial Services and Pulse EFT Association closes following Pulse member approval
|publisher=[[Discover Financial Services]]
|url=http://investorrelations.discoverfinancial.com/phoenix.zhtml?c=204177&p=irol-newsArticle&ID=1005801&highlight=
|archive-url=https://archive.today/20121208192231/http://investorrelations.discoverfinancial.com/phoenix.zhtml?c=204177&p=irol-newsArticle&ID=1005801&highlight=
|url-status=dead
|archive-date=December 8, 2012
|date=January 12, 2005
|access-date=October 22, 2007
}}</ref>

Discover is the third largest credit card brand in the U.S., with 60.6 million cardholders or about 8% of cards in circulation, placing it well behind [[Visa Inc.|Visa]] (48%) and [[Mastercard]] (36%), but slightly ahead of [[American Express]] (7.5%).<ref>{{Cite web |last=Thangavelu |first=Poonkulali |title=Credit Card Market Share Statistics |url=https://www.bankrate.com/finance/credit-cards/credit-card-market-share-statistics/ |access-date=2023-11-21 |website=Bankrate |language=en-US}}</ref><ref>{{Cite web |last=Khunt |first=Hitesh |title=Top 10 U.S. Credit Card Companies by Purchase Volume |url=https://mycreditcardlab.com/web-stories/top-10-u-s-credit-card-companies-by-purchase-volume/|access-date=2024-03-16 |website=MyCreditCardLab.com |language=en-US}}</ref>

== History ==
At the time Discover was introduced, Sears was the largest retailer in the United States. It had purchased the [[Dean Witter Reynolds]] brokerage organization and [[Coldwell Banker|Coldwell, Banker & Company]] (real estate) in 1981<ref>{{cite web
| title=A Brief Chronology of Sears History
| url=http://www.searsarchives.com/history/chronologies/chronology_brief.htm
| publisher=Sears Brands, LLC.
| access-date=August 12, 2009}}</ref> as an attempt to add financial services to its portfolio of customer services. Ray Kennedy Sr., father of [[Country music|country]] singer [[Ray Kennedy (country singer)|Ray Kennedy]] and the [[credit manager]] for Sears, conceived the card.<ref name="jwcntry">Whitburn, Joel (1996). ''The Billboard Book of Top 40 Country Hits'', p.173. {{ISBN|0-8230-7632-6}}.</ref> After a trial period in 1985, starting with a $26.77 purchase at an Atlanta Sears on September 17,<ref name="first">{{Cite web |url=https://www.investopedia.com/terms/d/discover-card.asp |lang=en-US |publisher=[[Investopedia]] |access-date=August 1, 2020 |last=Kagan |first=Julia |date=June 27, 2018 |title=Discover Card}}</ref> the actual launch was pushed through by [[Philip J. Purcell]] and [[Mitchell M. Merin]], the company's senior vice president for corporate administration and manager of financial analysis, respectively.<ref name="Blake">{{cite news|url=https://www.institutionalinvestor.com/article/b151356w3lqdlt/blue-chipped|title=Blue chipped|last1=Blake|first1=Rich|date=November 1, 2002|work=Institutional Investor|access-date=August 9, 2018|language=en-gb}}</ref> 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 [[Sears Tower]], then the company's headquarters.

Discover was part of [[Dean Witter Reynolds|Dean Witter]], and then [[Morgan Stanley]], until 2007, when [[Discover Financial]] Services became an independent company.<ref>[http://www.greensheet.com/emagazine.php?story_id=195 “Discover flying solo”]. ''The Green Sheet'', July 9, 2007. Retrieved 2016-12-04.</ref> '''Novus''' was once the major processing center that partnered with the company. The Novus logo was retired, replaced by the Discover Network logo.

[[File:Olddiscover.png|thumb|Discover and Novus retired acceptance mark]]
Unlike other attempts at creating a credit card to rival [[MasterCard]] and [[Visa Inc.|Visa]], such as [[Citibank]]'s [[Choice (credit card)|Choice card]], Discover 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 also earn a "Cashback Bonus", in which a percentage of the amount spent would be refunded to the account (from 1% to 5%), depending on how much the card was used.<ref>Simon, Jeremy M. [http://www.creditcards.com/credit-card-news/reward-programs-a-short-history-1277.php Credit card reward programs: a short history]. CreditCards.com, November 14, 2006. Retrieved 2016-12-04.</ref> Discover was also noteworthy for being the only credit card accepted by the [[U.S. Customs Service]] to pay [[customs duty]], effective February 19, 1987.<ref>[http://www.joc.com/maritime-news/customs-service-rules-credit-cards_19870219.html Customs Service Rules on Credit Cards]. Journal of Commerce. Retrieved December 5, 2016.</ref> Since it did not charge a percentage fee to retailers, unlike Visa, MasterCard, and American Express, Discover was also the only credit card accepted at [[Sam's Club]]; the retailer has since started to accept MasterCard and American Express (see below). A 1989 study found that Discover had strong consumer adoption in the U.S.; the number of households with Discover cards increased by 2.1 million, or 14 percent, in 1989.<ref>Aguilar, Linda. [https://chicagofed.org/~/media/publications/economic-perspectives/1990/ep-jan-feb1990-part2-aguilar-pdf.pdf#page=18 Banks and nonbanks at the end of the ‘80s]. Federal Reserve Bank of Chicago, March 1, 1990.</ref> In this same year, Discover also signed a restaurant in Delaware as its 1 millionth merchant in its payment network.<ref>Harkness, Brendan. [https://www.creditcardinsider.com/credit-cards/discover/]. CreditCardInsider.com, April 7, 2020.</ref>

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 Discover was thought both to hurt Sears turnover and to restrict the card's potential. Other retailers resisted it, as they were developing their own credit products and they believed they would be helping their competitor. Sears began to face difficulties in the late 1980s in light of these developments, and with strong competition both from [[Walmart]] and from so-called [[category killer]]s such as [[Toys "R" Us]]. Discover's introduction was costly; Sears's Discover 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.<ref>Barmash, Isadore. [https://www.nytimes.com/1987/04/22/business/sears-net-rises-47.4-in-quarter.html "Sears Net Rises 47.4% in Quarter"], ''The New York Times'', April 22, 1987.</ref>

In 1993, Sears spun off its Dean Witter division into a new publicly-traded company,<ref>{{cite web |url=https://www.upi.com/Archives/1993/06/30/Sears-completes-spinoff-of-its-Dean-Witter-Discover-Co-stake/7543741412800/ |title=Sears completes spinoff of its Dean Witter, Discover & Co. stake |website=United Press International |date=June 30, 1993}}</ref> and began to accept MasterCard and Visa in addition to its store credit card and Discover. Discover became part of the Dean Witter financial services firm, and the new company was called Dean Witter, Discover & Co. In 1997, this company merged with Morgan Stanley to become Morgan Stanley Dean Witter, Discover & Co. In 1999, this company rebranded itself as [[Discover Financial|Discover Financial Services, Inc]].<ref>Kagan, Julia. [https://www.investopedia.com/terms/d/discover-card.asp]. Investopedia.com, June 27, 2018.</ref>

=== Discover Bank ===
The Greenwood Trust Company was founded in 1911 and is based in [[Greenwood, Delaware]]. It was acquired by Discover Financial Services in 1985 and renamed Discover Bank in 2000.<ref>{{cite press release | title=Greenwood Trust Company Renamed Discover Bank | url=http://investorrelations.discoverfinancial.com/phoenix.zhtml?c=204177&p=irol-newsArticle&ID=1005864&highlight | archive-url=https://archive.today/20140121165011/http://investorrelations.discoverfinancial.com/phoenix.zhtml?c=204177&p=irol-newsArticle&ID=1005864&highlight | url-status=dead | archive-date=January 21, 2014 | publisher=[[Discover Financial Services]] | date=August 1, 2000 }}</ref> The original location of the Greenwood Trust Company on East Market Street in Greenwood is now the town hall and police station.<ref>{{cite web | title=Discover Bank | url=http://www.bankrate.com/finance/businesses/d/discover-bank.aspx}}</ref>

=== Global alliance ===
{{see|Card reciprocal agreements}}
Starting around 2005, to increase acceptance 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 that accept Discover.<ref>{{Cite web|url=https://www.discoverglobalnetwork.com/en-us/about-us/reach-and-acceptance|title = Reach and Acceptance &#124; Discover Global Network}}</ref> Some major examples include:
*[[Diners Club International]] worldwide
* [[BC Card]] in South Korea
* [[JCB (credit card company)|JCB]] in Japan
* [[RuPay]] in India
* [[Troy (card scheme)|TROY]] in Turkey<ref>{{cite web | url=https://troyodeme.com/en/urunler-ve-hizmetler/kart-kabulu/ | title=Card Acceptance – Troy – Turkey's Payment Method}}</ref>
* [[China UnionPay|UnionPay]] in China
* [[Verve International|Verve]] in Nigeria
* [[DinaCard]] in Serbia
* [[Elo (card association)|Elo]] in Brazil
* ATH in Puerto Rico
* Mercury throughout the Middle East
* NAPAS in Vietnam
* Prosa in Mexico

Currently, Discover is accepted in 185 countries.<ref>{{Cite web|url=https://www.discover.com/credit-cards/help-center/account/international-use.html|title = International Credit Card Acceptance &#124; Discover}}</ref>

== Business developments ==
[[File:Discover it card.jpeg|thumb|right|''Discover it'', the flagship credit card issued by [[Discover Financial Services]]]]
In October 2004, the [[Supreme Court of the United States]] chose not to review a ruling in Discover's favor that challenged exclusionary policies of Visa and MasterCard, stating that MasterCard and Visa were violating antitrust regulations. 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.

Shortly after the 2004 Supreme Court ruling, Discover struck its first deal to have its cards issued by another financial institution, [[GE Consumer Finance]], which began to issue credit cards for retailer [[Walmart]] and its wholesale warehouse stores, [[Sam's Club]].<ref>Kingson, Jennifer A. [https://www.nytimes.com/2005/03/26/business/credit-card-issuers-adjust-to-open-field.html "Credit Card Issuers Adjust to Open Field"], ''The New York Times'', March 26, 2005.</ref> 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.<ref>{{cite web|url=http://www.stltoday.com/business/local/wal-mart-taps-mastercard-for-store-branded-credit-card/article_e7120541-6a86-51f0-96ca-077d5099f363.html|title=Wal-Mart taps MasterCard for store-branded credit card|author=Lee Enterprises|work=stltoday.com|date=April 5, 2014 }}</ref>

[[HSBC]] 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 September 2012, Discover 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.<ref>{{cite web|url=http://www.consumerfinance.gov/newsroom/discover-consent-order/|title=Federal Deposit Insurance Corporation and Consumer Financial Protection Bureau Order Discover to Pay $200 Million Consumer Refund for Deceptive Marketing|work=Consumer Financial Protection Bureau|date=September 24, 2012 }}</ref>

=== Acquisition by Capital One ===
On February 19, 2024, [[Capital One]] announced that it would acquire Discover Financial Services in an all-stock transaction valued at $35.3 billion.<ref>{{Cite web |last1=Kim |first1=Hakyung |last2=Wang |first2=Christine |date=2024-02-19 |title=Capital One to acquire Discover Financial Services in $35.3 billion all-stock deal |url=https://www.cnbc.com/2024/02/19/capital-one-acquiring-discover-financial-services-report-says.html |access-date=2024-02-22 |website=CNBC |language=en}}</ref> If the deal is approved by regulators, the combined company will become the largest credit card issuer in the U.S.<ref>{{Cite news |last1=Nerkar |first1=Santul |last2=Flitter |first2=Emily |date=2024-02-20 |title=What to Know About Capital One's Proposed Acquisition of Discover |url=https://www.nytimes.com/2024/02/20/business/capital-one-discover-what-to-know.html |access-date=2024-02-22 |work=The New York Times |language=en-US |issn=0362-4331}}</ref> The deal has faced scrutiny from antitrust experts.<ref>{{Cite web |date=2024-03-22 |title=Antitrust issues take center stage in Capital One-Discover deal |url=https://www.americanbanker.com/news/antitrust-issues-take-center-stage-in-capital-one-discover-deal |access-date=2024-06-28 |website=American Banker |language=en}}</ref><ref>{{Cite web |title=DOJ examines Capital One-Discover deal's competitive angle |url=https://www.bankingdive.com/news/doj-capital-one-discover-deal-competition-antitrust-federal-reserve-occ-fairbank/714453/ |access-date=2024-06-28 |website=Banking Dive |language=en-US}}</ref>

== Advertising ==

[[File:Pittsburgh Penguins, Washington Capitals, Bryan Rust (33744033514).jpg|thumb|Discover Card advertising (top right) on the boards of an [[NHL]] [[ice hockey]] [[ice hockey rink|rink]] during a [[Stanley Cup Playoffs|playoff]] game]]

From 1998 to 2007, Discover Card owned a billboard at [[One Times Square]], just above the flagpole where the [[Times Square Ball]] is placed, until [[Toshiba]] bought the space. As a result, its logo could be seen on national television during [[New Year's Eve]], while the ball dropped. Discover also sponsored the ball drop itself.<ref>[https://www.nytimes.com/1998/06/18/nyregion/metro-business-discover-is-sponsor-for-year-2000-event.html Metro Business; Discover Is Sponsor For Year 2000 Event]</ref><ref>[https://www.nytimes.com/2007/12/03/business/worldbusiness/03toshiba.html Back in Times Square, Toshiba Stands Tall]</ref>

From its opening in 2001 to 2012, [[Sugarloaf Mills]] Mall in [[Lawrenceville, Georgia]], was named '''Discover Mills''' in a [[naming rights]] 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.<ref>{{cite web|title=The Mills Corporation Announces the Grand Opening of Discover Mills|url=http://www.prnewswire.com/news-releases/the-mills-corporation-announces-the-grand-opening-of-discover-mills-74023107.html|website=PR Newswire|access-date=March 9, 2016}}</ref><ref>{{cite news|last1=Sawicki|first1=Beth|title=Discover Mills renamed Sugarloaf Mills|url=http://www.11alive.com/news/article/257692/3/Discover-Mills-renamed-Sugarloaf-Mills|access-date=March 9, 2016|agency=11 Alive News|publisher=Gannett|date=September 21, 2012|url-status=dead|archive-url=https://archive.today/20130116064828/http://www.11alive.com/news/article/257692/3/Discover-Mills-renamed-Sugarloaf-Mills|archive-date=January 16, 2013}}</ref>

Since 2008, Discover has been the official credit-card partner of the [[National Hockey League]]. 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 2024, actress [[Jennifer Coolidge]] starred in Discover Card's television commercials.<ref>{{Cite AV media |url=https://www.ispot.tv/ad/fUso/discover-card-hat-trick-featuring-jennifer-coolidge-wayne-gretzky |title=Discover Card TV Spot, 'Hat Trick' Featuring Jennifer Coolidge, Wayne Gretzky |language=en |access-date=2025-01-14 |via=www.ispot.tv}}</ref>

== See also ==
{{portal-inline|Companies}}

== References ==
{{reflist}}

== External links ==
* {{commons category-inline|Discover Card}}
* {{Official website|https://www.discover.com/credit-cards/}}

{{Credit cards}}
{{Sears Holdings}}

[[Category:Credit cards in the United States]]
[[Category:Sears Holdings brands]]
[[Category:Products introduced in 1985]]
[[Category:Products and services discontinued in 2025]]
[[Category:Discover Financial]]