Location and Scope

MasterCard Worldwide is a Purchase, New York-based multinational corporation. Discover Financial Services reveals its roots with Sears, Roebuck and Company by its location in Riverwoods, Illinois, not far from Sears corporate headquarters in Hoffman Estates. DFS's business is focused in the United States and the Americas.

MasterCard is still trailing VISA in the US credit card market share figures, though they both are growing. Meanwhile, Discover is continuing to bring up the rear, and like American Express a falling market share (though not quite as drastic a fall. Here's what the division looks like, according to the 2008 and 2004 data in the Nilson Report:

History

MasterCard and Discover Card are the two late-comers to the four top credit cards. While American Express was founded in 1850, and VISA has its roots in the Bank of America, MasterCard sprang forth from the Interbank Card Association (ICA), an association that got its start in 1968, and it wasn't till more than a decade later that Discover Card was introduced by Sears in 1985, making it part of the Sears Financial Network.

The ICA acquired  the Master Charge name and trademark of interlocking circles and expanded to create an international presence all between 1968 and 1969. It opened offices in Europe, Asia (Japan), and Central America (Mexico). The renaming to MasterCard happened in 1979, and the company kept on expanding, offering the People's Republic of China's first payment card as well as acquiring an interest in EuroCard in the 1980s. The 2002 merger of MasterCard and Europay International drove the creation of MasterCard International, and the conversion to a private-share corporation took place the same year. Its initial public offering (IPO) was made in 2006, and it is traded on the New York Stock Exchange.

Discover Card, on the other hand, worked on developing its ties in the US. The company worked to make its initial offering unique, not only with an unveiling during a SuperBowl in 1986, but by choosing to offer a card with no annual fee, offering higher credit limits, offering a Cashback Bonus, and allowing for accounts to be paid at all Sears stores. When the Sears Financial Network was sold in 1993, Discover became part of Dean Witter and remained in the organization with Dean Witter and Morgan Stanley merged in 1997. Discover expanded into debit and ATM cards, as well as beginning to offer cards through other banks besides the Discover Bank.

Offerings

Both Discover and MasterCard offer consumer and commercial cards. Discover has offerings in the following categories:

With Discover, consumers and small businesses have a choice of credit cards with a variety of bonuses and rewards. Discover also offers prepaid gift cards. The Discover Card site does not indicate that it offers corporate cards or debit cards.

With MasterCard, a wider range of choices is available. Consumers have the choice of:

• debit cards tied to a bank account
• credit cards with low rates or with a variety of rewards and bonuses.
• gift and prepaid cards
• secured cards (but note that although these are listed, the MasterCard site indicates that none are currently available in early 2009).

With MasterCard, there are specific business cards in the categories of small business, mid-size companies, corporations, and public sector agencies. Debit, credit, and prepaid cards are all offered for businesses as well as for consumers, and credit cards include a variety of rewards, bonuses, and premiums.