Capital One Financial announced this week that it would buy Discover Financial Services for $35 billion. The combination could potentially shake up the payments industry, which is largely dominated by Visa and Mastercard.
For customers of the companies, it might eventually mean bigger perks and more merchant acceptance of Discover cards, and potentially lead to more competition in the payments industry. But most of the benefits will be going to the companies themselves, as well as the merchants who accept these cards.
WHY IS THE DEAL IMPORTANT?
Some of the biggest issuers of credit cards are banks, like JPMorgan Chase and Citigroup. But Capital One and Discover are first and foremost credit card companies — like American Express, but with different clientele. They have tens of millions of customers and target their products at Americans who do not travel heavily outside the U.S. and would like to get more value out of their everyday purchases like gas, groceries and domestic travel. In other words, people who typically don’t carry premium credit cards.
The combined company will have more loans to customers on its credit cards than JPMorgan and Citigroup combined. The merger also gives the Discover network the ability to fight on more equal footing with Mastercard and American Express in a way that it simply hasn’t been able to in its 40-year history.
“You want the customer or merchant to choose you as a company, either for your products or for your brand, and this deal gives them plenty of opportunity to make that case,” said Sanjay Sakhrani, a payments industry analyst with Keefe, Bruyette & Woods.
WHO USES CAPITAL ONE AND DISCOVER?
Denne historien er fra February 23, 2024-utgaven av AppleMagazine.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent ? Logg på
Denne historien er fra February 23, 2024-utgaven av AppleMagazine.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
Allerede abonnent? Logg på
AUSTRALIA PROPOSES LEGAL MINIMUM AGE FOR CHILDREN ACCESSING SOCIAL MEDIA
The Australian government this week promised to legislate this year to enforce a minimum age for children to access social media, but it has yet to announce how ages will be verified.
SWEDEN JOINS COUNTRIES SEEKING TO END SCREEN TIME FOR CHILDREN UNDER 2
Sweden says children under the age of 2 should not be exposed to any digital screens.
TELEGRAM CEO DEFENDS HIMSELF AGAINST FRENCH CHARGES IN FIRST PUBLIC COMMENTS
Telegram founder and CEO Pavel Durov promised to step up efforts to fight criminality on the messaging app, his first public comments since French authorities handed him preliminary charges for allegedly allowing the platform’s use for criminal activity.
GOOGLE AND APPLE LOSE THEIR COURT FIGHTS AGAINST THE EU AND OWE BILLIONS IN FINES AND TAXES
Google lost its last bid to overturn a European Union antitrust penalty, after the bloc's top court ruled against it Tuesday in a case that came with a whopping fine and helped jumpstart an era of intensifying scrutiny for Big Tech companies.
EU'S TOP COURT DISMISSES APPLE'S FINAL APPEAL AGAINST ORDER TO PAY IRELAND 13B EUROS IN BACK TAXES
Apple this week lost its last bid to avoid paying 13 billion euros ($14.34 billion) in back taxes to Ireland, in a finale to a dispute with the European Union that centered on sweetheart deals that Dublin was offering to attract multinational businesses with minimal taxes across the 27-nation bloc. The final decision by the EU's top court was quickly hailed as a landmark victory over corporate greed.
US POSTAL SERVICE SQUEEZE ON SHIPPING CONSOLIDATORS COULD RAISE CONSUMER COSTS
The U.S. Postal Service said this week that it is ending discounts that shipping consolidators such as UPS and DHL use to get packages to the nation's doorsteps, in a move meant to help the Postal Service slow losses but that could see the higher costs passed on to consumers.
BATTERY-POWERED DEVICES ARE OVERHEATING MORE OFTEN ON PLANES AND RAISING ALARM
Devices powered by lithium-ion batteries are overheating more often during airline flights and passengers often put them in checked bags that go into the cargo hold, where a fire might not be detected as quickly.
GEORGIA SCHOOL SHOOTING HIGHLIGHTS FEARS ABOUT CLASSROOM CELLPHONE BANS
Huddling for safety in classrooms as gunfire rang out, students at Apalachee High School texted or called their parents to let them know what was happening and send what they thought could be their final messages. One student texted her mother to say she loved her, adding, “I’m sorry I’m not the best daughter.”
TEXAS PARENTS GAIN NEW TOOLS TO CONTROL THEIR TEEN'S SOCIAL MEDIA USE
Parents of Texas children under 18 can now monitor and restrict their child's activity on digital platforms including Facebook and Instagram - but only if they know their child uses the service.
APPLE EMBRACES THE AI CRAZE WITH ITS NEWLY UNLEASHED IPHONE 16 LINEUP
Apple on Monday charged into the artificial intelligence craze with a new iPhone lineup that marks the company’s latest attempt to latch onto a technology trend and transform it into a cultural phenomenon.
