Hoping to move out of the wallet and onto consumers key rings, Discover Financial Services Inc. on Wednesday launched a keytag-sized version of its credit card.
The Discover 2GO card is issued as a companion to a cardholders regular Discover card. The wavy-edged plastic tag has a magnetic stripe and folds, pocketknife style, into a carrying case that comes with a built-in key chain and belt clip.
Discover is offering the new card initially to its Midwest customers through a direct mail pitch. By summer it will be available nationwide to current and new customers.
The key ring card is meant to be more convenient, and thus more used, than the cards that sit in a customers wallet, the Morgan Stanley Dean Witter & Co. unit said in a press statement.
Were bringing Discover Card out of peoples wallets and putting all of its benefits at their fingertips, said David W. Nelms, Discovers president and chief operating officer. When Discover Card was launched, we were the only major credit card company to offer a no-annual-fee product and a cash reward program. Now, with the launch of the Discover 2GO Card, we are once again changing the industry.
Ashoke Dutt, Discovers executive vice president for marketing and business development, said the new card was still being refined and may pick up a few more features, such as a microchip, in the future. Discover is talking with grocery store chains about an agreement to put a loyalty program bar code on the carrying case, he said.
Discovers self-governing business structure can help it make changes to the product more nimbly than its competitors could, Mr. Dutt said. That is one of the advantages of having our own network. We are not bogged down by Visa and MasterCard rules. If our competitors tried to do something like this, there would be a whole bureaucratic process to go through.
Most of the participants in test groups said they wanted the key ring card as soon as they saw it, according to Mr. Dutt. Existing cardholders said they are likely to use it, and noncardholders said they were likely to try it, he said.
With the launch of Discover2GO, Discover is taking a page from the playbooks of other companies that have produced key ring tags for loyalty programs and quick payments.
One of the most popular key ring payment tags is Exxon Mobil Corp.s Speedpass, which more than 4 million drivers use to transmit their credit card information at the gas pump. The cylindrical items have attracted such a following that fast food chains such as McDonalds Corp. now accept them for payment at some of their restaurants.
Discover 2GO was developed over a one-year period, a Discover spokesman said. Employees tested several versions, including the current one, at grocery stores and other merchants, the spokesman said.
The card has a round hologram and embossed lettering on the front and a magnetic stripe and a signature bar on the back, just like full-sized credit cards. Because of its unusual shape, it cannot fit in some ATM-type readers or manual embossing machines, which a few merchants still use.
Eventually, all Discover cards, whatever their shape, will include the hologram, Mr. Dutt said.
Discover has disdained some credit card trends, such as smart card development, but it is one of the first issuers to create a card that fits on a key ring.
My initial reaction is that it is pretty ingenious, said James L. Accomando, the president of Accomando Consulting Inc. of Fairfield, Conn. When you open your wallet you are staring at however many credit cards. Putting it on a key chain is a double reminder.
The product would be most effective in increasing Discover usage among cardholders who were already inclined to use the card, Mr. Accomando said. At the end of the day, when somebody walks into a store, many already know what card they will use. It is their loyalty or gas card, or the one that makes the most sense for that particular purchase, he said.
