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Carte Blanche (credit card)

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Title: Carte Blanche (credit card)  
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Language: English
Subject: Conrad Hilton, Carte blanche
Publisher: World Heritage Encyclopedia

Carte Blanche (credit card)

Diners Club
Subsidiary of Discover Financial
Industry Finance
Founded 1950
Founder(s) Frank X. McNamara
Ralph Schneider
Matty Simmons
Alfred Bloomingdale
Headquarters Riverwoods, Illinois, U.S.
Area served Worldwide
Key people Eduardo Tobon
(Diners Club International President and CEO)[1]
Products Charge card, Credit Cards

Diners Club International, founded as Diners Club, is a charge card company formed in 1950 by Frank X. McNamara, Ralph Schneider and Matty Simmons. When it first emerged, it became the first independent credit card company in the world that established an idea of a self-sufficient company producing credit cards for travel and entertainment.[2] Diners Club International and its franchises service high net, affluent and well travelled individuals [3] from around the globe with operations in 59 countries.[4]


The first credit card charge was made on February 8, 1950,[5] by Frank McNamara, Ralph Schneider and Matty Simmons at Major's Cabin Grill, a restaurant adjacent to their offices in the Empire State Building. McNamara was bought out two years later by department store heir Alfred Bloomingdale, who resigned several years later. Schneider died in the early 1960s. Simmons resigned in 1967 to form the publishing company that became National Lampoon. During that approximately 20-year period, these four men were the only major participants in the Diners Club operation.

Diners Club created what would later be dubbed the "travel and entertainment" (T&E) card market, which focused on frequent travelers with a substantial income to pay for other high-value charges. As these customers had no need to pay for purchases over time, these cards required that the entire balance of the bill be paid upon receipt. This type of account is known today as a charge card.

Diners Club's monopoly was short-lived, as American Express and Carte Blanche (which later partnered with Diners Club) began to compete with Diners Club in the T&E card market. American Express now dominates the "member card" arena, providing thousands of customers with cards that require the monthly balance to be paid in full.

Towards the end of the 1960s Diners Club also faced competition from banks that issued revolving credit cards through BankAmericard (later renamed Visa), and Interbank MasterCharge (later renamed MasterCard). Diners Club began early on to allow franchises of the Diners Club name, at first in Europe and later throughout the world, for many years eclipsing the BankAmericard or Interbank MasterCharge networks abroad. Amoco also issued for a time its own co-branded Diners Club cards called American Torch Club, and Sun Oil Company issued its version called Sun Diner Club Card.

In 1981, Citibank, a unit of Citigroup, acquired Diners Club International, the franchisor that holds rights to the Diners Club trademark, and many of the largest franchises worldwide. A majority of the abroad franchises remain independently owned.

Acquisition by Discover Financial Services

In a transaction completed July 1, 2008, Discover Financial Services purchased Diners Club International from Citi for $165 million.[6] The deal was announced in April 2008 and approved by the U.S. government in May 2008. By merging the North American Discover Network with the international Diners Club Network, Discover created a global payment processing system. Discover Bank has no plans to issue Diners Club-branded cards, which continue to be issued by Diners Club International licensees.

In 2011, Discover began putting its logo on Diners Club cards. Some payment processors, like PayPal, can only process new Diners Club cards with the Discover logo on them.

North American franchise

MasterCard alliance

In 2004, Diners Club announced an agreement with MasterCard. Diners Club cards issued in the United States and Canada then featured a MasterCard logo and 16-digit account number on the front, and could be used wherever MasterCards were accepted. Cards from other countries continued to bear a 14-digit account number on the front, with the MasterCard logo on the back. However, since the takeover of Diners Club International by Discover Financial Services, these cards have had the Discover logo on the back.

Carte Blanche

Carte Blanche originated as a travel and entertainment card owned by Hilton Hotels, and competed with American Express and Diners Club. Hilton sold the company to Citibank for a brief period during the 1960s, and repurchased it in 1979. The card was phased out of service in the late 1980s.

Throughout most of the 1960s and 1970s, the Carte Blanche card was considered to be a more prestigious worldwide travel and entertainment card than American Express or Diners Club, though its small cardmember base hindered its success. Carte Blanche also was the first to implement a "Gold Card" program, but initially only as a means to recognize cardholders who were frequent users and paid their bills on time. In 2000, the Carte Blanche name was revived in the United States when Diners Club, which was also acquired by Citibank in 1981, introduced an upscale version of its card: the Diners Club Carte Blanche Card. It is an upper-level charge card on par with the American Express Platinum card. The card carries a US$300 annual fee and offers an extensive menu of perks geared toward spendthrift travelers. It is accepted wherever regular Diners Club cards are accepted. Although Diners Club requires payment in full within 30 days, corporate accounts can pay within 60 days without penalty.


Main article: enRoute (credit card)

Diners Club expanded its customer base in Canada by acquiring the enRoute card from Air Canada in 1992, and marketed the card under the combined name for a period of time as the "Diners Club/en route Card".[7] The enRoute business was valued at over $300 million. Diners Club remains a minor player in Canada.

Acquisition by BMO

In November 2009, Citibank announced that Diners Club International's North American franchise has been sold to Bank of Montreal (BMO). The deal gives BMO exclusive rights to issue Diners cards in the U.S. and Canada. At the time, BMO said the Diners Club fits well with its existing commercial card business, adding that commercial cards are one of the fastest growing segments in the credit card business.[8]

Switzerland and Germany franchise

In a transaction that closed on August 6, 2010, Citibank sold the Switzerland and Germany franchises to a private investment group headed by Anthony J. Helbling.[9]

United Kingdom and Ireland franchise

On August 7, 2012, Citigroup Inc. announced the sale of its Diners Club franchise in the United Kingdom and Ireland to Affiniture Cards Ltd., a private investor group.[10]

Slovenian scandal

In 2013, Tomaž Lovše, who owned Diners Club Slovenija, was one of three people that were investigated in Slovenia regarding unpaid debts that his franchise owed to merchants.[11] In May, the central bank of Slovenia revoked the Diners Club Slovenije's license for payment services, which meant 80,000 local members could not use their card.[12][13] Diners Club International transferred the franchise to a subsidiary of Austria's Erste bank group, Erste Card Club, and agreed to repay the franchise's debt to merchants.[11][14] An Erste press release in August 2013 stated that Diners Club services were once again available in Slovenia.[15]

See also

Companies portal


External links

  • Diners Club International
  • Diners Club USA
  • Diners Club Canada
  • Discover gets antitrust OK for Diners Club buy, Reuters
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