Latest news with #RichardFairbank
CNET
19-05-2025
- Business
- CNET
Capital One Has Officially Purchased Discover. What the $35 Billion Acquisition Means for Your Credit Cards
Getty Images/CNET Capital One and Discover are now one entity after Capital One's deal to acquire Discover -- one of only four credit card networks -- closed on May 18. 'This deal brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses, and merchants,' said Richard D. Fairbank, Founder and CEO of Capital One, in a statement provided to CNET. In February 2024, Capital One announced its plans to purchase Discover for $35.3 billion. Some experts have argued that the merger isn't good news for consumers, since Capital One is the third-largest credit card company, and Discover is one of only four credit card networks. That could mean less competition among credit card companies, leading to higher prices and fees. On the other hand, the deal could give Discover the additional backing it needs to compete with Visa and Mastercard, which some policymakers say have a duopoly on the credit card network market. American Express, the third-largest network, is both a payment network and an issuer, like Discover. More competition among payment networks could lead to lower swipe fees, which retailers could potentially pass along to cardholders. Though it's unclear exactly what changes are coming for cardholders, we'll likely start learning more within a month. What's next for Capital One and Discover credit cardholders? The company has indicated that Capital One will still use the Visa and Mastercard networks while it puts money toward strengthening Discover's payment network. So, your Capital One credit cards may one day run on the Discover network, but it likely won't happen in the foreseeable future. In an April news release, Capital One said no changes will happen immediately following the closing date. If any changes do occur, your card issuer will alert you to the changes ahead of time, so just watch for communications. In JD Power's annual customer satisfaction study of card issuers, both Discover and Capital One rank highly in customer service, so customers shouldn't expect any new hardships now that the deal has closed. If your card network eventually changes, it could mean your card will have different acceptance rates and certain card benefits could change. However, Capital One has said that it plans to strengthen the Discover payment network, which generally has worse acceptance rates overseas compared to Visa and Mastercard, so payment acceptance may not be an issue when and if that change happens. There's nothing existing Capital One and Discover cardholders need to do right now. Your cards will continue to work as they have, and any changes will be communicated to you before they take effect.
Yahoo
19-05-2025
- Business
- Yahoo
Capital One just bought Discover. Here's what it means for their customers.
On Sunday, Capital One acquired Discover Financial, becoming the sixth-largest US bank by assets. Online-focused Discover stands to gain a big physical footprint from the deal. A pair of top Democrats warned last month that the deal could spell trouble for customers. Capital One has acquired Discover Financial, becoming the sixth-largest bank in the US by asset size. In an earnings call last month, Capital One's CEO, Richard Fairbank, said the goal was to "preserve the best" of what Discover does, such as its advertising and focus on customer experiences. Capital One's $35.3 billion acquisition of Discover was first announced in February 2024. The deal was approved by regulators last month, despite pushback from top Democrats and consumer advocates who raised concerns about lower competition and risks to low-income customers and those with poor credit scores. Representatives of Capital One and Discover didn't respond to a request for comment. On Monday, both banks said that "customer accounts and banking relationships remain unchanged" at this time. Here's what customers of each of the two companies stand to gain and lose from the deal. A much bigger Capital One could mean more products, but some Democrats have warned of higher fees. Capital One previously said the merger would increase competition with the transaction giants Visa, Mastercard, and American Express and improve access for lower-income customers. In a white paper published in July, four economists and lawyers at the International Center for Law & Economics wrote that the merger might finally end the Visa and MasterCard "duopoly." They added that the merger would let Capital One switch its debit cards to Discover's payment networks, and it might offer "more attractive products to depositors." This could include free checking accounts with no minimum balance rules and debit cards with cash back for lower-income customers. Cost savings and other benefits from the acquisition could also make Capital One a stronger competitor to "behemoths such as JPMorgan Chase, Citibank, and Bank of America," the ICLE group wrote. The merger doesn't appear to mean any big immediate changes. Discover has said accounts aren't linked to the new corporate owner, so Capital One branches and customer service can't help with Discover products. Eventually, Discover customers may have greater access to the bank through Capital One's branches and ATMs. Right now, Discover has just one physical outpost in Delaware. Michael Shepherd, the interim CEO of Discover, said on an earnings call last month that the deal would "increase competition in payment networks" and "offer a wider range of products." In a letter written to the Federal Reserve System earlier this month, Rep. Maxine Waters of California and Sen. Elizabeth Warren of Massachusetts argued that the merger would hurt Capital One customers. Warren and Waters are top Democrats on the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee, respectively. "These are not two traditional banks — they are credit card giants," they wrote. Waters and Warren said post-merger Capital One would have 40% of the general-purpose credit card issuance market share. This would give Capital One the power to increase fees for merchants and reduce rewards and other benefits for customers. "Merchants would have no choice but to accept the terms dictated by Capital One's network, since they need to access the customers of the largest credit card issuer in the country," they wrote in the letter. Warren and Waters said it was "doubtful" that Capital One could fix the "myriad issues" that Discover faces. "For roughly 17 years, Discover misclassified millions of consumer credit cards as commercial, resulting in higher interchange fees for transactions," the politicians wrote. In the white paper, the ICLE economists and lawyers wrote that a merger could improve data protection because the combined company would have the capacity to increase "financial investments in security." A bigger company also means access to more data, which can be a plus, they wrote. "The ability to capture and analyze more data on more customers may also permit the larger and more competitive company to develop and offer new innovative products," the ICLE experts wrote. Read the original article on Business Insider
Yahoo
19-05-2025
- Business
- Yahoo
Capital One just bought Discover. Here's what it means for their customers.
On Sunday, Capital One acquired Discover Financial, becoming the sixth-largest US bank by assets. Online-focused Discover stands to gain a big physical footprint from the deal. A pair of top Democrats warned last month that the deal could spell trouble for customers. Capital One has acquired Discover Financial, becoming the sixth-largest bank in the US by asset size. In an earnings call last month, Capital One's CEO, Richard Fairbank, said the goal was to "preserve the best" of what Discover does, such as its advertising and focus on customer experiences. Capital One's $35.3 billion acquisition of Discover was first announced in February 2024. The deal was approved by regulators last month, despite pushback from top Democrats and consumer advocates who raised concerns about lower competition and risks to low-income customers and those with poor credit scores. Representatives of Capital One and Discover didn't respond to a request for comment. On Monday, both banks said that "customer accounts and banking relationships remain unchanged" at this time. Here's what customers of each of the two companies stand to gain and lose from the deal. A much bigger Capital One could mean more products, but some Democrats have warned of higher fees. Capital One previously said the merger would increase competition with the transaction giants Visa, Mastercard, and American Express and improve access for lower-income customers. In a white paper published in July, four economists and lawyers at the International Center for Law & Economics wrote that the merger might finally end the Visa and MasterCard "duopoly." They added that the merger would let Capital One switch its debit cards to Discover's payment networks, and it might offer "more attractive products to depositors." This could include free checking accounts with no minimum balance rules and debit cards with cash back for lower-income customers. Cost savings and other benefits from the acquisition could also make Capital One a stronger competitor to "behemoths such as JPMorgan Chase, Citibank, and Bank of America," the ICLE group wrote. The merger doesn't appear to mean any big immediate changes. Discover has said accounts aren't linked to the new corporate owner, so Capital One branches and customer service can't help with Discover products. Eventually, Discover customers may have greater access to the bank through Capital One's branches and ATMs. Right now, Discover has just one physical outpost in Delaware. Michael Shepherd, the interim CEO of Discover, said on an earnings call last month that the deal would "increase competition in payment networks" and "offer a wider range of products." In a letter written to the Federal Reserve System earlier this month, Rep. Maxine Waters of California and Sen. Elizabeth Warren of Massachusetts argued that the merger would hurt Capital One customers. Warren and Waters are top Democrats on the Senate Banking, Housing, and Urban Affairs Committee and the House Financial Services Committee, respectively. "These are not two traditional banks — they are credit card giants," they wrote. Waters and Warren said post-merger Capital One would have 40% of the general-purpose credit card issuance market share. This would give Capital One the power to increase fees for merchants and reduce rewards and other benefits for customers. "Merchants would have no choice but to accept the terms dictated by Capital One's network, since they need to access the customers of the largest credit card issuer in the country," they wrote in the letter. Warren and Waters said it was "doubtful" that Capital One could fix the "myriad issues" that Discover faces. "For roughly 17 years, Discover misclassified millions of consumer credit cards as commercial, resulting in higher interchange fees for transactions," the politicians wrote. In the white paper, the ICLE economists and lawyers wrote that a merger could improve data protection because the combined company would have the capacity to increase "financial investments in security." A bigger company also means access to more data, which can be a plus, they wrote. "The ability to capture and analyze more data on more customers may also permit the larger and more competitive company to develop and offer new innovative products," the ICLE experts wrote. Read the original article on Business Insider
Yahoo
19-05-2025
- Business
- Yahoo
2 of the world's largest credit card companies just merged
Capital One Financial Corporation completed its acquisition of Discover Financial Services. The deal, first announced in February, is valued at $35.5 billion. The acquisition combines two of the world's largest credit card issuers. Capital One Financial Corporation has completed its acquisition of Discover Financial Services. Richard D. Fairbank, Capital One's founder and CEO, said the deal "brings together two innovative, mission-driven companies" in a press release on Sunday. "Through the efforts of thousands of associates across Capital One and Discover, we are well-positioned to continue our quest to change banking for good for millions of customers," he said. The companies first announced the acquisition, an all-stock transaction valued at $35.5 billion, in February. At that time, Fairbank said the acquisition was a "singular opportunity to bring together two very successful companies with complementary capabilities and franchises, and to build a payments network that can compete with the largest payments networks and payments companies." Capital One reported a $1.4 billion net income during its first-quarter earnings in April. Discover reported a net income of $1.1 billion that same month. Representatives for Discover Financial Services did not respond to a request for comment from Business Insider. For now, the companies said nothing would change for Discover customers. Read the original article on Business Insider
Yahoo
18-05-2025
- Business
- Yahoo
Capital One Finishes Discover Acquisition After 15-Month Journey
(Bloomberg) -- Almost 15 months after its announcement, Capital One Financial Corp.'s takeover of Discover Financial Services was officially completed on Sunday, creating the largest credit-card issuer by loan volume in the US. As Coastline Erodes, One California City Considers 'Retreat Now' How a Highway Became San Francisco's Newest Park Maryland's Credit Rating Gets Downgraded as Governor Blames Trump America, 'Nation of Porches' Power-Hungry Data Centers Are Warming Homes in the Nordics Armed with Discover's payments network, which competes with those of Visa Inc. and Mastercard Inc., Capital One is poised to capture an even greater share of spending on credit and debit cards that Americans so heavily rely upon. 'We are well-positioned to continue our quest to change banking for good for millions of customers,' Capital One Chief Executive Officer Richard Fairbank said in a statement. The acquisition wasn't assured, given the last presidential administration's skepticism of mergers — and especially those involving finance firms. Bank dealmaking activity was stunted during Joe Biden's presidency, and some Congressional Democrats opposed the Capital One takeover of Discover, saying it may harm consumers and put the stability of the US financial system at risk. With Donald Trump now in the Oval Office, the Federal Reserve and the Office of the Comptroller of the Currency approved the deal last month after the US Department of Justice decided not to challenge it. But the approval came with stipulations: the OCC mandated that Capital One outline the corrective actions it planned to take to address Discover's outstanding enforcement actions. In 2023, the firm disclosed that, starting in 2007, it had been charging merchants more than it should have to accept payments on certain credit cards. In connection with the acquisition, Capital One is expanding its board of directors to 15 members from 12. Capital One and Discover customer accounts and banking relationships remain unchanged for now, and information in advance of any forthcoming changes will be provided, according to the statement. Microsoft's CEO on How AI Will Remake Every Company, Including His Cartoon Network's Last Gasp DeepSeek's 'Tech Madman' Founder Is Threatening US Dominance in AI Race As Nuclear Power Makes a Comeback, South Korea Emerges a Winner Tariffs Won't Reindustrialize America. Here's What Will ©2025 Bloomberg L.P. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
