Capital One Intends To Acquire Discover. For Now, It’s Business As Usual

The merger of two well-known banks would boost the new version of Capital One to be a top competitor in consumer financial services.

On the credit card side, the addition of Discover transactions would widen the gap between Capital One and competitors in total credit card purchase volume. This would catapult Capital One to have the highest amount of credit card loans.

There Won’t Be Instant Changes

Even in the speediest scenario, nothing will change immediately. If approved, the transaction is expected to close in late 2024 or early 2025. Until then, both companies will operate separately and cardholders should expect the terms of their account to remain as is. Even after approval, many integrations will come slowly.

Flagship Products Will Likely Continue

In the near term, cardholders likely won’t see any cards discontinued or consolidated with others. Each company has successful, profitable products, including some unique offerings on the market. Capital One has stated it will keep Discover branding on relevant cards and continue to market it as such. Customers can rest assured they won’t be losing access to the best Discover credit cards any time soon (if at all).

Both companies have had a focus on simple and transparent products, and there may be some changes in the long run. Additionally, the fusion of these two issuers may lead to new product offerings. Sharing data on customer behavior and values while combining operations could bring more targeted credit cards.

Discover Payment Network

Currently, Discover is the smallest of the four major U.S. card networks (Visa, the largest, is more than 12 times the size of Discover by volume). Despite this, it still has nearly universal acceptance in the United States.

Capital One announced its intent to move all debit cards over to Discover’s network, which will add to its scale. Though Capital One doesn’t expect to integrate all its credit cards into the network, some products may move over beginning in the second quarter of 2025. This injection of volume could be the impetus for other merchants to partner with the processor—and change perceptions that Discover is a small player with low market acceptance.

Capital One also plans to lean into growing international penetration, where it still lags. These changes will allow additional cards to migrate to the Discover payment processing platform in due time.

Credit Card Rewards Will Likely Stay Safe

The proposed Credit Card Competition Act impacts cards processed by Visa or Mastercard, like those that are currently issued by Capital One. Though the legislation’s intention is to lower “swipe fees” (or processing charges), most experts agree that the lower revenue would mean banks would need to scale back—or eliminate entirely—credit card rewards.

Cards processed on the Discover network are excluded from this legislation, which would mean Capital One and Discover cards could continue to offer rewards structures similar to what we see today.

Capital One and Discover will still need to work through regulatory and antitrust processes before a potential merger takes effect. Right now, cardholders don’t have a lot to concern themselves with regarding the transition. However, if the acquisition is approved, it would create a leading payment franchise that could influence the entire credit card landscape for years to come.