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Discover Financial Services And China Unionpay Launch Second Phase Of Reciprocal Acceptance Agreement

November 08, 2006
Riverwoods, Illinois and Beijing, China – November 8, 2006 – It was less than a year ago that a landmark transaction at the famous Macy's Herald Square in New York City kicked off the first phase of a reciprocal acceptance agreement between Discover Financial Services LLC, a business unit of Morgan Stanley (NYSE:MS), and China Unionpay (CUP), China's only national bankcard payment network. Today, a single swipe of a Discover Card marks the second phase of the agreement, signifying the acceptance of Discover Network cards at more than 480,000 merchant locations and 90,000 ATMs across China.

Just prior to a ceremonial luncheon at Qianmen Quanjude restaurant in Beijing to celebrate the successful implementation of the next phase of the agreement, Discover Financial Services Chairman and CEO David Nelms purchased a bronze horse with his Discover Card, marking the first transaction using a Discover Network card in China. Last December, Liu Tinghuan, chairman of China Unionpay, and Su Ning, deputy governor of the People's Bank of China, purchased a necktie with a CUP PIN debit card issued in China, marking the beginning of China Unionpay bankcard acceptance in the U.S.

“This historic alliance opens the door for Chinese merchants on the CUP network to benefit from the purchasing power of Discover Network cardholders traveling to China. The number of American travelers in China grew close to 20 percent last year alone,” said Wan Jianhua, president and CEO of China Unionpay. “As our CUP cardholders have already been doing for nearly a year in the United States, we are excited to welcome the use of Discover Network cards at our CUP merchant locations beginning in mainland China.”

Acceptance of Discover Network cards on the CUP network throughout China marks the latest phase of a long-term agreement that the two companies signed in May 2005.

“This successful transaction is a testament to the new opportunities that exist for commerce between the growing number of American travelers to China and Chinese merchants,” said David Nelms, chairman and CEO of Discover Financial Services. “By broadening international acceptance of Discover Network cards, this transaction further expands the link between the U.S. and China, while providing increased sales volume for Chinese merchants.”

Discover Network cards are also accepted in other regions popular with U.S. travelers, such as the Caribbean, Mexico, Central America, and Canada.

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About China Unionpay
China Unionpay Co., Ltd. (CUP) is the only national bankcard payment network in China, with more than 900 million bankcards issued on the CUP network. CUP bankcards are accepted in 23 countries and regions, including Hong Kong, Macau, Japan, Korea, Germany, France, and Australia. Approved by the State Council and licensed by the People's Bank of China, CUP is a shareholding financial service institution established through capital contributions by more than 80 domestic financial institutions and a total of 189 member banks, of which 30 are overseas. For more information, visit www.chinaunionpay.com/englishversion.

About Discover Financial Services
Discover Financial Services LLC, a business unit of Morgan Stanley (NYSE:MS), operates the Discover Card with more than 50 million Cardmembers, and the Discover Network, with more than 4 million merchant and cash access locations. Discover Financial Services also operates the PULSE ATM/debit network, which serves more than 4,200 financial institutions and includes nearly 250,000 ATMs and approximately 3.4 million POS terminals. For more information, visit www.discovercard.com, www.discovernetwork.com or www.pulse-eft.com.

CONTACTS:

Leslie Beyer
Discover Financial Services
224/405-5154

Tao Zhou
China Unionpay
86-21-6100-6566 ext 6115