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.

Diners Club

Type	Subsidiary of Discover Financial
Founded	1950
Founder(s)	Frank X. McNamara Ralph Schneider Matty Simmons Alfred Bloomingdale
Headquarters	New York City, NY, U.S.
Industry	Finance
Products	Credit cards
Website	http://www.dinersclub.com

History

The first credit card charge was made on February 8, 1950 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 heirAlfred Bloomingdale, who resigned several years later. Schneider died in the early 60s. 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 was paid upon receipt. This type of account is known today as a charge card. Diners Club's monopoly was short-lived, however, 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 be paid in full.

Diners Club also faced competition from banks that issued revolving credit cards through BankAmericard (later renamed VISA), and Interbank MasterCharge (later renamed MasterCard) towards the end of the 1960s. 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 gasoline also issued its own co-branded Diners Club cards for a time called, American Torch Club, as well as Sun Oil Company with its version called Sun Diner Club Card.

Diners Club International, the franchisor that holds rights to the Diners Club trademark, was acquired in 1981 by Citibank, a unit of Citigroup, as well as many of the largest franchises worldwide, although a majority of its franchises abroad remain independently owned.

MasterCard alliance

In 2004, Diners Club announced an agreement with MasterCard. Diners Club cards issued in the United States and Canada now feature a MasterCard logo and 16-digit account number on the front, and can be used wherever MasterCard can. 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 & Entertainment (T&E) card owned by Hilton Hotels, and competed with both American Express and Diners Club. The company changed ownership after being sold by Hilton, with Citibank owning the company for a brief period during the 1960s, and finally repurchasing it in 1979, and phasing the card 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 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 spendthrifty 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.

enRoute

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". Diners Club remains a minor player in Canada.

Acquisition by Discover Card

In a transaction completed July 1, 2008, Discover Card purchased the Diners Club International from Citi for $165 million. 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, including Citibank.

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.