Capital One Targets $2T in Business Payments With Brex Buy

Capital One paired its fourth-quarter earnings report Thursday (Jan. 22) with the announcement of its acquisition of Brex, positioning the deal as a structural move deeper into business banking and payments.

The deal, CEO Richard Fairbank told analysts on the earnings call, expands Capital One’s reach across payables, receivables and spend management. And the transaction, announced roughly eight months after the finalized Discover Financial Services acquisition, comes against the backdrop of improving credit trends and steady consumer spending.

In a nod to the broader strategy, Fairbank stated that “from the founding of the company, we have believed that payments will be the tip of the spear in the transformation of banking and financial services,” he said, adding that the Brex deal accelerates a path Capital One has been building toward for years.

Why Brex, and Why Now

The $5.2 billion acquisition brings Brex’s integrated platform of business cards, spend management software and banking under Capital One’s umbrella. Fairbank characterized Brex as a pioneer in a segment where businesses still rely on fragmented tools to manage payables, approvals, expense tracking and reconciliation.

“For decades, businesses of all sizes have faced chronic pain points when dealing with payments,” Fairbank said. “It’s often manual, error prone and very time consuming.” He argued that existing solutions offered by banks and software providers leaving businesses without a comprehensive system.

“I don’t know a single business owner who went into business because they were really passionate about managing the complexity of spending and payments. Solutions and tools to help businesses address these issues have been piecemeal,” Fairbank said.

Brex’s platform, he said, changes that dynamic by combining cards, spend controls and banking into a single operating layer. Capital One, in turn, brings scale, funding and distribution. “Brex’s exceptional growth opportunity was limited only by their scale and resources, and that’s what brought the two of us together,” Fairbank said.

Shares in Capital One were down by 3% in after-hours trading on Thursday.

Scaling Payments Beyond Cards

Capital One has long been a major player in small business cards, particularly in the personal liability segment where owners are responsible for repayment. Brex extends that reach into corporate liability cards and broader business payments, a market Fairbank estimated at roughly $2 trillion in annual purchase volume and growing as companies move away from cash and checks.

“The personal liability card, is where we primarily play today,” said Fairbank, who elaborated that “collectively, this business card market is growing at about 9% annually as business payments continue the secular migration … and companies like Brex have grown even faster.”

The executive detailed that Brex’s technology allows Capital One to reach businesses of all sizes, from startups to global enterprises, without rebuilding infrastructure from scratch.

Credit Quality, Consumer Spending Hold Steady

Alongside the strategic shift, management emphasized that the fundamentals of Capital One’s business remain intact. Chief Financial Officer Andrew Young’s commentary on the call, alongside Fairbank’s, illustrated that credit metrics continued to improve. Domestic card charge-offs declined, while delinquency rates moved largely in line with seasonal patterns. Fairbank said this suggests credit performance is “settling out after almost a year of steady improvement.”

Consumer spending also remains resilient, though not without pressure. Fairbank noted that employment remains strong and wages are still growing in real terms, supporting card usage and loan performance. At the same time, cumulative inflation and higher interest rates continue to strain some households.

“Some consumers are feeling pressure from the cumulative effects of price inflation and higher interest rates,” he said, describing an environment marked by stability rather than exuberance. Purchase volumes on the company’s cards were up 6.2% excluding the impact of the Discover operations.

Tax refunds are expected to provide a short-term lift to credit performance in early 2026, though Fairbank cautioned that the effect is likely temporary. “All else equal, higher tax refunds will likely be good … for consumer credit,” he said, adding that expectations will reset once withholding levels adjust.

Regulation and the Risk of Unintended Consequences

Fairbank used the earnings call to warn of, as he put it, “unintended consequences” tied to proposals to cap credit card interest rates and alter interchange economics. While acknowledging concerns about affordability, he warned that price controls could reduce access to credit across the spectrum.

“Putting a price control in place such as the proposed rate cap would not make credit more affordable,” Fairbank said. “It would make credit much less available for consumers, up and down the credit spectrum.  This is far more than a subprime issue.”

He also cautioned that restricting card economics could ripple through consumer spending, which he noted accounts for roughly 70% of U.S. GDP, as well as through industries that rely on card-based payments, from retailers to travel providers, and possibly cause a recession.

Brex as a Platform for the Next Phase

Management emphasized that Brex will be integrated alongside, not in place of, Capital One’s existing initiatives, including the Discover acquisition. Young said the deal will initially dilute earnings but will not change Capital One’s capital plans or share repurchase cadence.

“Brex brings exactly what Capital One needs to accelerate what we’ve been building,” Fairbank told analysts. The acquisition, he added, provides “shoulders to stand on to accelerate the growth of our small business bank.”