The Discover Card is a major credit card, issued primarily in the United States, it was originally introduced by Sears in 1985, and was part of Dean Witter, and then Morgan Stanley, until 2007, when Discover Financial Services became an independent company. Novus, a major processing center, used to be partners with the company as well. The Novus logo has since been retired and now the Discover Network logo has replaced it.
Most cards with the Discover brand are issued by Discover Bank. Discover Card transactions are processed through the Discover Network payment network. As of February 2006, the company announced that it would begin offering Discover Debit cards to banks, made possible by the Pulse payment system, which Discover acquired in 2005.
In October 2004, the Supreme Court upheld a ruling in Discover Card's favor that challenged exclusionary policies of Visa and MasterCard. 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. In 2005, Discover Card acquired PULSE, an electronic funds transfer association, allowing it to issue and market debit and ATM cards.
Shortly after the 2004 Supreme Court 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 August 2007. The spin-off was finalized ahead of schedule, on June 30, 2007.