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About Discover Financial Services

Here comes the sun

Discover Financial Services is the fourth-largest, credit-card issuer behind Visa, MasterCard and AMEX.  The company pioneered new features, stepping up as one of the first companies to offer cash rewards and no annual fees.  Discover has evolved into one of the United States’ most recognized financial brands, with its well-known "It pays to Discover" tagline and more than 50 million card members.  With the integration of Discover, PULSE and now Diners Club, they process billions of transactions every year, with 4,400 financial institutions and point-of-sale terminals all throughout United States and a bigger global reach through Diners Club International payment network.  In addition to its Riverwoods, Ill., headquarters, Discover Financial Services has offices in Arizona, Delaware, Ohio, Tennessee, Utah, Texas and Shanghai, China.  The firm employs more than 12,000 people.

Growing, growing…

The ball started rolling after a Sears employee purchased an item for $26.77 in 1985 during its test marketing.  The following year, the Discover Card was unveiled during the 1986 Super Bowl when a "Dawn of Discover" commercial featured a rising sun and a simple message: "Very few things cost you nothing to get and pay you back every day.  But now the Discover Card does."  By 1989 Discover Network signed its 1 millionth merchant.  The next decade proved to be lucrative for the company, first spinning off with Dean Witter Financial Services Group, Inc. on March 1993, and then going on-line in September 1995.  In 1997, Discover entered a $23-billion merger with investment bank, Morgan Stanley.  Discovery capped the decade with its U.K. expansion and renaming its processing partner, Novus Services, Inc. to Discover Financial Services, Inc. in 1999.

I-banking and credit cards are a different breed

Until the third quarter of 2007, Discover was part of Morgan Stanley, the revered New York-based investment bank.  Although the Discover unit made some respectable contributions to the investment bank's bottom line, Morgan Stanley's soul was never in the credit card business.  The firm spent 2006 whipping it into shape, resulting in record net revenue of $4.3 billion, a 24-percent increase from 2005.  Discover's credit quality and bankruptcy rates improved as well, and delinquencies and loan losses were at a 10-year low.  It also launched a new debit card program and entered into several new agreements with merchant acquirers in an effort to increase Discover's acceptance at small- and midsized businesses.  The spin-off was completed in the third quarter of 2007.

Big moves

Treading the rough waters of the year 2008 alone for the first time after Morgan Stanley let them go, Discover has managed to increase their deposits to 15 percent or $29 billion and network expanded as much as 19 percent including the acquisition that has expanded their global credit card acceptance.  This particular year however, there were big strategic moves that were made in order to expand their horizons and securing the company’s future despite the economic depression surrounding the consumer and business market.  The first big strategic move was in February 2008, when Discover announced that it was selling its U.K. credit card business, Goldfish, to Barclays Bank for about $70 million.  However, Discover CEO David Nelms said that by selling the losing stake, they were able to reduce funding and earnings risk and managed to increase the capital ratio.  On the other hand, on July 2008, Discover completed the acquisition of Diners Club International from Citi for $165 million.  The move brings more than $30 billion per year in spending volume outside of North America, deals with 44 licensees that issue Diners Club cards and a network in 185 countries and territories worldwide.  Diners Club launched the first general purpose credit card in 1950 and since then, has grown a wide-reaching global payments network.

Discover Financial Services

2500 Lake Cook Road
Riverwoods, IL 60015
Phone: (224) 405-0900

Firm Stats

Employer Type: Public
Stock Symbol: DFS
Stock Exchange: NYSE
Chairman & CEO: David W. Nelms
2008 Employees (All Locations): 11,900