- American Express & Discover Card
- CISP Certification
- Discount Rates
- Electronic Checks
- Fraud Screening
- High Risk Merchant Accounts
- How Transactions are Processed
- Keyed Transactions
- Merchant Account Fees
- Offshore Merchant Account
- Payment Gateways
- Reasons for a Merchant Account
- Select a Merchant Account Provider
- Terminated Merchant File
- Third Party Processing
- Types of Merchant Accounts
- Understanding AVS
- Understanding Chargebacks
- What is a Merchant Account
American Express & Discover Card
In the United States, there are four major brands of credit card companies: Visa, MasterCard, American Express and Discover Card. American Express is somewhat different from the other three, in that it requires the outstanding balance to be paid off each month.
AMERICAN EXPRESS
American Express has a long history with financial services products. The company was originally established in 1850, but didn’t launch its major products—charge cards until 1958. The card had a higher annual fee than competitors at $6 in order to be perceived as elite. There were layers of cards such as Gold cards and Platinum cards, each requiring a higher fee and offering different levels of services and limits.
Some of the American Express cards are simply charge cards where the balance in full must be paid off each month; others are true credit cards, which carry the unpaid balance over time. The green card, platinum card and Centurion cards remain as charge cards. The Centurion card requires a $2500 annual fee and has a variety of perks for its wealthy and privileged customers.
American Express’s Blue card and Blue Cash cards are popular with upwardly mobile young adults. Blue has a rewards program, no annual fee and an onboard computer chip to perform various functions. Other specialty cards issued by American Express include One, The Knot, The Nest, and City Reward Cards
DISCOVER CARD
The Discover Card was originally introduced by Sears Company in 1985 and has gone through several permutations, first as a subsidiary of Morgan Stanley and more recently as a stand alone company spin-off expected to be completed by September of 2007. In the UK, Discover Card is associated with the MasterCard-logo Goldfish brand.
Discover Cards are issued through Discover Bank and transactions are processed through the Discover Network payment facility. Over 50 million cardholders use the Discover brand cards.
When the card was first issued by Sears, it was intended to be part of the comprehensive Sears financial network. Sears stopped accepting other credit cards at the time of the implementation of the Discover card, which alienated customers, and led to retaliatory actions by other card-issuing companies. Eventually Sears was forced by flagging sales to sell off the entire financial components of their business to Dean Witter which merged into Morgan Stanley.
The Discover Card was successful almost from the beginning, because it offered a card with no annual fee and it also had higher credit limits than many of the existing cards. Its Cashback Bonus feature was another popular selling point. Up to 1% of purchases could be credited back to the account.
Discover Card is primarily an American company. Few locations outside the United States accept Discover Card transactions, although it can be used at ATMs for cash withdrawals in some areas.
In October 2004, Discover Card successfully filed suit against Visa and MasterCard to block their policy of not allowing banks which offer Visa and MasterCard to also offer Discover. Current plans to offer a Discover debit card are proceeding.