Discover Financial Services LLC has signed deals with four banks to issue its credit and prepaid cards.
The Riverwoods, Ill., unit of Morgan Stanley said Tuesday that it signed up two credit card issuers: Alliance Data Services Corp., a Dallas issuer of private-label cards for retailers, and First Bank and Trust of Brookings, S.D. Discover also signed up two prepaid issuers: West Suburban Bancorp Inc. of Lombard, Ill., and Palm Desert National Bank in California.
First Bank and Trust, a unit of Fishback Financial Corp., caters to the underbanked. Trent Sorbe, the president of Fishback's marketing unit, said Discover "has demonstrated an understanding of this space."
(Another Discover partnership, with Morgan Beaumont Inc. of Bradenton, Fla., which sells prepaid cards, was announced last week.)
Leslie Beyer, a spokeswoman for Discover, said it has been pursuing partnerships with issuing banks since October 2004, when the Supreme Court refused to hear an appeal of a court decision throwing out the exclusionary rules of Visa U.S.A. and MasterCard International.
Visa and MasterCard had barred banks from issuing cards with brands other than theirs. Since the rules were lifted, Metris Cos. Inc. (now part of HSBC Holdings PLC), General Electric Co.'s GE Consumer Finance, and CompuCredit Corp. have begun issuing Discover cards.
GE issues them at Wal-Mart and Sam's Club stores.
In December, Discover and Exante Bank of Salt Lake City said they would pilot-test a health-care account debit card.
Joe Hurley, Discover's vice president of network strategic development, said in a press release that the deals announced Tuesday exemplify his company's "strategy of supporting multiple issuers and products."
Ms. Beyer said the deals had been reached at different times, but she could not provide the timeframe by press time.
In an e-mail, she wrote that last year's acquisition of Pulse EFT Association has enabled Discover to enter the rapidly growing debit market.
Pulse "more than doubles Discover Financial Services' transaction volume and number of cards in the U.S. marketplace, forming what we believe is a solid platform for growth and providing us with a gateway to more than 4,200 Pulse financial institution participants," she wrote.
Last year Discover reached an agreement that allows Discover network cards to be accepted at China UnionPay automated teller machines and point of sale terminals in China. The deal also allows China UnionPay cards to be accepted on the Pulse network in the United States.
