Who Owns Discover Card and Its Financial Services

Discover Card is owned by Discover Financial Services, a separate company from its parent company, Morgan Stanley.

Discover Financial Services is a publicly traded company, listed on the New York Stock Exchange under the ticker symbol DFS.

The company was spun off from Morgan Stanley in 2007, and since then, it has operated independently.

Morgan Stanley, the parent company, is a multinational investment bank and financial services company.

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Capital One is acquiring Discover Financial Services in a $35.3 billion all-stock transaction.

This deal will create a US credit card giant, adding scale to Discover, which is currently fourth in size among US credit card networks after Visa, Mastercard, and Amex.

The combined company will own 60% of the shares, with Discover shareholders owning the rest. It will create the sixth-largest US bank group.

The acquisition will also create the largest credit card company by outstanding volume. By purchase volume, the combined company would be the third-largest credit card issuer after JPMorgan Chase and American Express.

Capital One expects the deal to be approved by regulators in late 2024 or early 2025.

Discover cards work differently than other credit cards because they're issued directly by the company, not by a bank that licenses the Visa brand. This means Discover Financial earns interest income from its customers, in addition to charging merchants payment processing fees.

The company's business model is similar to American Express', where it directly profits from credit card balances. Discover Financial's goal is to increase the card's acceptance among merchants and the average outstanding balance of its cardholders.

Discover was the first major credit card brand to offer cash-back rewards, which is a way to attract new users. Incentives like increasing credit limits or waiving annual account fees encourage customers to borrow more, which is in line with the company's business model.

Discover Financial generates revenue from its payments network, just like Visa, but it also earns interest income from its credit card customers. This is a key difference between Discover and Visa, which only generates revenue from payment processing fees.

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Discover Financial Services is a leading financial services company that owns and operates the Discover card brand.

The company was founded in 1985 by Sears, Roebuck and Co. to issue credit cards to Sears customers.

Discover Financial Services went public in 2007, listing its shares on the New York Stock Exchange.

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Discover Financial Services has had a significant impact on the US credit card industry.

The company's introduction of the Discover card in 1985 was a major game-changer, offering a card with no annual fee, no interest for the first 6 months, and a cashback rewards program.

This innovative approach disrupted the traditional credit card model and attracted a large following of consumers looking for a more consumer-friendly alternative.

As a result, Discover Financial Services has become one of the largest credit card issuers in the US, with over 150 million cards issued worldwide.

The company's focus on customer satisfaction and transparency has also led to a significant reduction in complaints filed with the Consumer Financial Protection Bureau.

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Discover Financial Services has a diverse range of group companies that operate in various sectors.

One of these companies is DFS Services LLC, which provides customizable payment solutions for merchants and financial institutions. It's based in Riverwoods, IL.

PULSE Network LLC is another company under Discover Financial Services, offering a cloud-based platform for content marketing and event solutions. The company was founded in 1987 and is headquartered in Canton, MA.

Discover Financial Services also has a pension plan, which is managed by the Discover Financial Services Pension Plan. This investment manager focuses on managing the company's pension fund.

Diners Club International Ltd. is a credit card services provider, founded in 1950 and headquartered in Riverwoods, IL.

Diners Club Services Pvt Ltd. is a business support services company that is part of Discover Financial Services, based in Mumbai, India, and founded in 2012.

Here are some key group companies under Discover Financial Services:

Capital One is acquiring Discover Financial Services in a $35.3 billion all-stock deal.

The deal will create a US credit card giant, with Capital One shareholders owning 60% of the combined company and Discover shareholders owning the remaining 40%.

This acquisition is expected to be approved by regulators in late 2024 or early 2025, pending antitrust reviews.

The combined company will be the sixth-largest US bank group, and it will create the largest credit card company by outstanding volume.

Currently, Discover is fourth in size among US credit card networks after Visa, Mastercard, and Amex.

The deal will also give Capital One a new source of revenue from merchant fees it collects.

Capital One issues credit cards with Mastercard, Visa, and Discover, and the deal will likely result in more of its cards getting switched to the Discover network.

This acquisition is a clear bet that a post-pandemic expansion of the credit card loan level will keep rising in the coming years.

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