Capital One Eyes Banking and Card Expansion After Discover Acquisition

Capital One Financial has reportedly entered a “new era” after completing its acquisition of Discover Financial Services.

With the acquisition, Capital One grew in size and added a debit and credit card network, which could “supercharge” its banking and card businesses, The Wall Street Journal (WSJ) reported Friday (June 27).

The Discover network could enable Capital One to make more money from debit card payments than competitors that are not both a card issuer and network; use the incremental interchange revenue to boost its bottom line or fund debit card rewards to attract new customers; and fund more investment and enhance rewards and deals to keep expanding its credit business, the report said.

When Capital One announced in February 2024 that it planned to acquire Discover for $35.3 billion, it said the transaction would create a global payments platform with 70 million merchant acceptance points in more than 200 countries and territories.

“Our acquisition of Discover is 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,” Richard Fairbank, founder, chairman and CEO of Capital One, said at the time in a press release. “Through this combination, we’re creating a company that is exceptionally well-positioned to create significant value for consumers, small businesses, merchants and shareholders as technology continues to transform the payments and banking marketplace.”

PYMNTS reported at the time that bringing the two credit card giants together would pave the path toward creating a banking giant with particular expertise in serving the paycheck-to-paycheck consumer well beyond the credit cards that have been the hallmarks of both firms. It would also leverage data and cross-border capabilities to forge a banking ecosystem.

The deal was finalized May 18, about 15 months after it was announced, creating the largest credit card issuer in terms of loan volume in the U.S.

Fairbanks said in a press release announcing the completion of the transaction that the deal “brings together two innovative, mission-driven companies that together are poised to deliver breakthrough products and experiences to consumers, businesses and merchants.”