CHAPTER 6
Diners Club
History and development
6.1. The Diners Club Limited (Diners Club), which trades as Diners Club
International, is a subsidiary of Diners Club Inc, which is in turn a wholly-
owned subsidiary of The Continental Corporation of the USA. Diners Club
Inc has a shareholding in Diners Club of 50 per cent plus three shares; the
remaining shares are owned by National Westminster Bank (49*7 per cent)
and the public. Diners Club is one of the largest of 39 overseas affiliates
and subsidiaries of Diners Club Inc in the USA.
6.2. As stated in Chapter 2, Diners Club originated in the United Kingdom
in the early 1950s. By 1967 Diners Club already had about 69,000 cardholder
members and had affiliated some 9,300 trading establishments.
6.3. According to Diners Club, the most striking aspect of the development
of the business over the past ten years has been the growth in the use of
the Diners Club card to facilitate the acquisition of goods and services. The
total number of affiliated trading establishments has risen from 9,300 to over
26,000, membership from 69,000 to 230,000, and turnover from £6-4 million
to £150 million. In that period increased competition from American Express,
Barclaycard and Access has made it essential for Diners Club to increase
the efficiency of its operations and the competitiveness of the services that
Diners Club supplies to cardholders and affiliated traders. The more com-
panies that have supplied credit card services in the United Kingdom, the
more this has assisted, in Diners Club's view, in increasing the acceptability
of all credit cards as a means of payment for goods and services, and their
utilisation both by existing cardholders and new cardholders. On the other
hand, the increased competition has had the effect of eroding the commission
rates negotiated between Diners Club and traders. Diners Club has had to
search for reductions in its operating costs to compensate for the fall in com-
mission rates so as to avoid a severe reduction in its operating margins. It
has