Capital One’s acquisition of Discover is scheduled to close on Sunday, May 18. Federal regulators approved the deal last month, paving the way for the merger of these two credit card giants. Michael Shepherd, interim CEO and president of Discover, stated in an April press release that the merger will enhance competition in payment networks and provide a broader range of products to customers.
Announced in February 2024, the $35.3 billion deal has sparked debate among experts. Some argue that reduced competition in the credit card industry could lead to higher prices and fees for consumers. However, others believe the merger may empower Discover to better compete with Visa and Mastercard, potentially lowering swipe fees for retailers, which could benefit cardholders indirectly.
Post-merger, Capital One cardholders might see their cards transition from Visa or Mastercard networks to Discover. This shift could affect card perks, protections, and acceptance rates, particularly outside the US, where Discover’s acceptance is more limited. Changes won’t occur immediately, and cardholders will be notified in advance. Both companies rank highly in customer service, so users shouldn’t expect significant difficulties post-merger.
The most notable change will involve the card network. Acquiring Discover fills a gap for Capital One, which lacks its own network. Simultaneously, Capital One could enhance Discover’s reach by integrating its cards into the network. For travelers concerned about Discover’s international acceptance, considering a Visa, Amex, or Mastercard option might be prudent.
— new from CNET