What to Know About Capital One’s $35 Billion Takeover of Discover Financial
While a big chunk of Capital One cardholders will be moved over to the Discover network over time, the company is most likely to do that first for debit card customers, and even then it’s unlikely to disrupt their payments experience very much.
Photographer: Angus Mordant/BloombergCapital One Financial Corp. has bought Discover Financial Services, bringing together two of the biggest credit card firms so they can better compete with other Wall Street behemoths. The takeover was valued at $35 billion when it was announced in February 2024. Here’s all you need to know about the acquisition and what it means for consumers:
The combination allows Capital One, the US lender backed by Warren Buffett, to surpass rivals JPMorgan Chase & Co. and Citigroup Inc. to become the largest US credit-card issuer by loan volume. It also gives it a stronger foothold in the world of payments. That’s because on top of being a credit-card business, Discover operates three payment networks of its own: the Discover global network, Diner’s Club and Pulse, a system for processing debit card payments. Historically, Capital One had to rely on companies such as Visa Inc. or Mastercard Inc. for its cards. Acquiring Discover allows it to cut them out of the picture for some of its cards and reap more revenue.