Discover is now part of Capital One
75 comments
·May 19, 2025hombre_fatal
the_sleaze_
Opposite experience. I love Capital Ones interface, and their customer support is good. Usually I'll get a customer support agent state-side.
> the rep who sometimes gets mad at me for it
That's an ...unusual customer support experience.
> my Discover card kept me up to date with it's upgrade status
My capital one card does the same, it periodically requests updates to my income after which my credit line increases.
The only friction I experience with Capital One is the lack of physical presences. There are none in my entire region. That being said it is a great bank that never - and I mean never - has played games with auto-pay suddenly and silently failing at the due date (and incurring a late fee of course oopsies), or other annoyances I've had with Discover.
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lxgr
Agreed – Discover has great customer support. Their tech stack, however, seems terrible. They had a very messy migration of their Zelle integration and in the process seem to have broken things for many of their checking customers. Personally, I could neither use it, nor enroll my email address or phone number previously enrolled at Discover with any another bank for several months!
Capital One seems to have a much more modern tech stack: Their app is much more usable than most other banks' I've tried, and they're the only US credit card issuer I know of that actually supports 3DS without any ugly hacks that usually mean trouble when shopping at a foreign merchant that requires it. They also support a very neat authentication feature – tapping my credit or debit card on my phone – which I haven't seen with any other bank yet.
Let's see which tech stack and which customer support organization survives the merger, respectively...
ethbr1
Underappreciated reason, when system observations are made:
- Discover was founded in 1985 (credit card only, by Sears) and began banking in 2006(?)
- Capital One was founded in 1994 (credit card only) and began banking in 2005
Legacy systems suck, especially if the parent company has underinvested in IT modernization for decades. Delta? Southwest? And younger companies don't have to deal with the pre-digital legacy pain of < ~1990 founded companies.
lxgr
Counterpoint: Amex has been issuing charge cards since the 50s, and their tech seems leagues ahead of Discover, for both charge/credit cards and checking accounts (based on my first impressions for the latter; I haven't really used their checking account as my main account).
silisili
I really like Discover for the reasons you stated. It was my first CS experience where you called a number and a person just answered...imagine that.
Similarly, I detest Capital One for a whole host of reasons.
Just last month I was looking to switch banks, read great things about Discover, only to realize they'd be absorbed soon. Hard pass.
I wish this deal were never approved. I can't see Discover going away, nor Capital One growing, as good things.
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AStonesThrow
A few years ago I decided to build some credit with a Discover secured card. And when I researched Discover, I learned about why their acceptance was lower (higher merchant transaction fees) and their overseas acceptance was comparatively lower, and that they didn't have a single brick-and-mortar branch, and so with masochistic glee, I signed up!
Discover's credit card was a great idea, I feel. The cashback rewards I can earn at restaurants are great. The acceptance hasn't really been a barrier to spending, but unfortunately I cling to my Visa-based debit, "just in case" there are merchants who can't accept Discover -- what else would I do?
The lack of branches? No big deal, considering anything important can be done through their app or website. Which are very polished, attractive and functional. They don't even 2FA me from my Chromebook.
Their customer service is amazing. I mean, call in the middle of the night to a fluent English speaker who tells you where they're located?! They are so polite and patient! Best ever experience, really. In fact, my credit union's reps are really good too. It's a small blessing.
I did not need to open a Discover Checking account, and I can't remember why I did it, but I did. The Discover Bank debit card is different than their credit cards, and therefore acceptance may be even lower. I still get cashback rewards on it.
My finances are uncomplicated. I don't much enjoy dealing separately with two banks. I don't really need to. Except my credit union has no credit card to offer me, and Discover has no Visa to offer me. So I get along. We'll see how the Capital One thing goes.
Obligatory "Capital 1" related xkcd: https://m.xkcd.com/2206/
christophilus
I know nothing.
But this is an interesting acquisition. Capital One strikes me as a pretty well run org.
Why would they want Discover, who notoriously targets the low end of credit card custom? My guess is that this gives them the ability to increase margins by owning the entire payment layer all the way through distribution. If they slash the fees charged to merchants, this could make them quite a powerhouse.
jldugger
Matt Stoller seems informative on this in his blog post: https://www.thebignewsletter.com/p/the-fed-is-behind-the-cap...
mulderc
Well run? Haven’t they had lots of legal issues over the years?
https://en.m.wikipedia.org/wiki/Capital_One#Investigations_a...
0xC0ncord
Seems like nothing more than the cost of doing business.
drdaeman
I'm seeing misleading advertising with scummy/dark patterns, spam, failure to disclose important information, plus all the classic stuff like money laundering and bank fraud.
Could be just the cost of doing business, if that business' motto is "you either fuck someone over, or get fucked" or at least "you gotta hustle to survive".
I'm so tired of all those businesses out there.
monksy
From the people that I know that work at Capital One.
That is certainly not the case. It's full of ex-Amazon managers that only want to pile on and then aggressively stack rank engineers to fire them. Heck they even do the whole hire someone to fire them.
> Why would they want Discover, who notoriously targets the low end of credit card custom?
More revenue and cheaper admin/labor costs since they're already in the space.
datadrivenangel
Competing with VISA and the others is their goal here.
Boogie_Man
This is the correct answer. Discover has a payment network, which will afford Capital One the option to issue cards without relying on Visa or MasterCard. This is what Amex does.
I would assume primarily domestic cards (platinum, quicksilver, savor) will start being issued on the discover network, while travel cards (venture series) will not (initially) because of the high domestic and low international acceptance rate of Discover cards.
lxgr
Discover acceptance abroad is actually not as bad as it might seem at a first glance: Discover owns Diners Club International, and as a result Discover cards are accepted everywhere Diners Club cards are and vice versa.
They also have some mutual acceptance agreements with JCB and China UnionPay and others. Just because there's no explicit Discover logo on a terminal/restaurant window doesn't mean a Discover card will actually not work.
It's not quite the reach of Visa or Mastercard, but international acceptance seems to be trending up.
mbesto
First, "Capital One strikes me as a pretty well run org" != "it's clients' sophistication"
Second, Capital One also targets low end (subprime), especially relative to Amex, Visa, etc.
kulahan
Capital one also targets primarily lower end customers. Many of their cards just have usage fees despite being terrible cards in general.
mplewis9z
Capital One’s personal lending is also notorious for targeting the mid-to-low end of credit card customers. They routinely deny people for credit cards if it looks like the applicant pays off their cards in full every month - they love a customer with a credit profile that has no negative marks but with a moderate debt-to-income ratio that means they’ll get those sweet interest payments.
lbhdc
That seems pretty far off from my experience. They offer auto pay, so I have paid the balance on my cc every month since I have had it without ever accruing interest. I haven't be denied other cards from them, balance increases, or anything like that.
Boogie_Man
Here is some useful information about what percentage of credit card companies' issued cards are to subprime lendees. https://bpi.com/is-the-subprime-segment-of-the-credit-card-m...
It doesn't directly confirm or contradict your statement, but is relevant to the conversation.
I would also like to remind everyone to pay your credit card balance in full every month without fail, or you are giving your credit card issuer boatloads of money just for fun.
greenavocado
Subprime borrowers are categorically unsophisticated. If you look at the transaction data you will frequently see patterns like someone paying the minimum balance for 15 years instead of declaring bankruptcy strategically. The amount of unnecessary interest payment is insane.
jedbrooke
as I understand it, Discover gets to charge higher fees on debit cards (than eg visa and mc) due to some regulatory carve out, so capital one wants to take advantage of this and Discover’s payment network
gruez
Are you talking about the Durbin amendment? That's available to every bank with assets under $10B, not just Discover. If Capital One wanted higher swipe fees, there's hundreds of small banks that they can partner with to issue the cards. That's what many neobanks do.
lxgr
Neither Discover nor Capital One are exempt by asset size: https://www.federalreserve.gov/paymentsystems/regii-intercha...
However, Discover is (largely; I believe at least Pulse is available to issuing banks other than Discover) also a three-party network, which is inherently exempt from the Durbin amendment: https://www.congress.gov/crs-product/R41913
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trollbridge
Yes. This is exactly the same special advantage that American Express also has. However, Amex lacks enough know-how and presence in retail banking to really be able to issue enough debit cards to leverage this the way Capital One could.
The effect of this is that merchants end up hating taking Amex since it costs more, and I foresee Discover (which is even more niche) ending up the same way - there will simply be no reason to bother accepting Discover at all. How many people only have a Discover debit card in their wallet and no other?
jdeibele
I only have a Discover debit card. Discover pays 1% back on its debit cards, which is unusual. I have idly wondered why they did that. The fact that they're not subject to the restrictions on debit fees makes it clear why.
I shop for name brand stuff at Winco, a grocery chain in the Northwest US that doesn't take credit cards and makes you bag your own groceries. I'll be curious to see if they stop taking Discover debit cards if the fees increase.
tristor
This feels weird to me. Capital One is an everyman's card company, where Discover was always a niche player for upper middle class people, primarily competing with American Express. I have a feeling that Capital One will degrade the Discover brand greatly, although in recent years they had been trying to move downmarket anyway.
ravenstine
Though I don't know much about Capital One – I did have a credit card with them a long time ago, and I just remember their website/app being just OK.
I do hope this merger doesn't degrade Discover since I've been very happy with them in pretty much every way (both bank and credit).
jimt1234
Dumb question: Why are payment networks so difficult? My vague/naive assumption is it's because of complex banking/financial regulations and legacy banking systems. But honestly, from a technical perspective, I don't see it as so complicated. Anyone reading this could create a transactional system for "payments", open it to the public and scale it - basically, Venmo. The only major costs I can see are "infrastructure" and dealing with fraud. ???
Firehawke
Regulation. The cost of regulation compliance and tracking that you're in full compliance, and the lawyers needed to keep all of that in line.
rootsudo
Well, that kinds sucks.
digdugdirk
I was wondering when the questionable corporate consolidation would start kicking off under the Trump administration.
Have there been any other mergers in the past few months that slipped under the media radar? I honestly expected there would have been some deals waiting in the wings prior to the election just in case.
mindslight
Three major online-first banks was clearly just way too much competition. This merger fixes the situation down to the "token two" where they only have to compete on marketing rather than anything relating to actual features like product offerings, fees, website usability, customer service, etc. Now they can switch to shameless extraction mode like the regional and national brick-and-mortar banks.
lxgr
Which one is the other one?
mindslight
Ally. There's also Alliant Credit Union which I left out because I think their website/app usability is abjectly atrocious (and my statement was still technically correct because CU).
Admittedly I haven't kept up with new options in the past few years, but my main goal is stability for not having to redo all the setup so new startupy options are kind of inherently uninteresting.
xyst
"Questionable corporate consolidation" has been happening for decades. I do agree it will accelerate under this current orange administration.
Anti-trust laws have been watered down so much or not applied.
This is all because of pseudoscience from neoclassical/neoliberal/reaganomics economic theory
gruez
>This is all because of pseudoscience from neoclassical/neoliberal/reaganomics economic theory
What's the Real Science™ then?
RunningDroid
> What's the Real Science™ then?
Monopolies and intense corporate consolidation are bad for everyone except shareholders and CEOs?
xyst
It’s Ticketmaster and LiveNation all over again.
Business owners going to get gouged.
Customers going to see price of items go up as business owners pass along increased transaction costs.
Yes - this will also impact you even if you don’t have a discover/capital one card.
trollbridge
Soon you'll have to put up a "no Discover accepted" sign right next to the "Amex not accepted" sign.
ravenstine
How common is it really that Discover isn't accepted these days? I don't have Amex, so not really sure about that, but I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it – and neither of them were worth returning to anyway.
coldpie
> I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it
Really? For brick & mortar retail, my experience is pretty much only the major retailers accept it. Most small, local, or even regional retailers do not accept it.
WorldMaker
When I had Apple Card's daily cash going to Apple Cash was when Apple Cash was still a Discover (debit) card under the hood. (Last I checked it is a Visa [debit card] now.) During that time I found a bunch of places didn't take Discover and just didn't even put up a sign (even ones that had "Amex not accepted signs") because they didn't think anyone cared. It was never an issue then because I'd just switch back to the Apple Card (Mastercard), but as the only Discover card I've ever had in my "wallet" (virtual or otherwise) it was an interesting experience that left a lasting impression.
jldugger
I suspect the trick here is that capitalone issues so many other cards that once they standardize on it, merchants can't refuse their network without losing substantial amounts of business.
trollbridge
It is very likely C1 will move away from MC/Visa. There's a massive amount of money on the table for them in the form of interchange fees. They're effectively becoming the next American Express.
From a competitive landscape, this is probably a good thing - Discover never really did much issuance of cards by other banks, and this means competition against Amex.
JCattheATM
Or customers start bailing because no one accepts their cards and the whole thing backfires...
chasil
What I am actually seeing are restaurant receipts with "price for cash" and a higher "price for credit." I am not seeing this for groceries or other goods.
I understand that the "Durbin Amendment" had something to do with this.
jdeibele
Had an eye exam this morning and I needed to do a $30 co-pay. Pulled out a card to pay and I was asked if it was a credit card. I said yes and she said there'd be a 3% fee for using a credit card. I switched to my Discover debit card, which pays 1% back.
My only recent experiences with this with transactions over $10 was a small restaurant and a construction project where they took the deposit on a card but would charge a 3% fee if we didn't pay by check. Many of the local convenience stores charge a fee to use a card.
the_optimist
Cool. Great company, more competition among the payment networks should result in better and less expensive products. Maybe Discover will finally achieve its potential.
IAmBroom
> "more competition among the payment networks"
The exact opposite of what's happening.
the_optimist
How? The Discover network will be substantially better positioned to influence visa mastercard and amex, which are each expensive and oligopolistic. You know anything about this, or just spitballing here?
toomuchtodo
All payment roads eventually lead to FedNow instant payments.
https://fintechtakes.com/articles/2025-03-25/the-pay-by-bank...
https://20392958.fs1.hubspotusercontent-na1.net/hubfs/203929... (page 4 specifically)
(work at a fintech, thoughts and opinions my own)
josefritzishere
[flagged]
jedbrooke
“NOTICE: The FTC website is currently unavailable. Thank you for your patience while we work to restore service.”
oops, even the government is susceptible to the hug of death
gruez
Works fine for me.
gruez
...because the process started over a year ago, and just got regulatory approval last month? I'm not sure what you're expecting here. Unless that enforcement action specifically barred them from acquiring companies, why should they be prevented from acquiring companies? It's like asking why someone who was fined for speeding could still drive, when license suspension wasn't part of their punishment.
>Capital One announced in February 2024 that it had agreed to acquire Discover Financial in an all-stock deal worth $35.3 billion.[94]
>[...] The deal was approved by U.S. banking regulators in April 2025.[99]
hiatus
That's not Capital One being fined but the CEO himself.
colechristensen
Fining the CEO for not filing the correct paperwork when acquiring large amounts of company stock doesn't really seem like it should block a merger.
josefritzishere
[flagged]
colechristensen
>The complaint alleges that Fairbank failed to report his sizable stock windfall to federal antitrust authorities and illegally finalized the acquisition before the agencies could investigate.
He got $20M worth of shares of Capital One stock which is overall worth $76B, so yeah, I'm quite dismissive of the crime of not following antitrust regulations for a transaction involving 0.03% of company value. The authorities were never going to have anything to say about these transactions, they're just mad they didn't get the opportunity to choose to not do anything. Sure, fine him, but this is like a parking ticket.
ToucanLoucan
Our regulatory bodies at this point are simply a fig-leaf, a performance of accountability for too-big-to-fail corporations. Oh sure they hand out a fine here or there. Nothing substantial, certainly nothing that will change the behavior of business.
America is a gerontocracy giving birth to a corporatocracy.
Ugh. Moving back to the US after a decade abroad, I had to get credit cards to rebuild my nonexistent credit.
Discover and Capital One both had deposit-based credit cards for credit building, so that's what I started with.
Discover's customer support system was polished and felt like a small company. I'd always speak to a polite native English speaker. When I gave authentication information to the pre-call robot (like card number, name, exp date), the customer service rep could pull up that info instead of asking me to repeat it.
Also, my Discover card kept me up to date with it's upgrade status, eventually going from a $150 credit line to a $1500 automatically and predictably. And again going to a $2500 credit line without my intervention; just from making steady payments.
Capital One's customer support system was awful. It's outsourced and I can't always understand the rep who sometimes gets mad at me for it. Any authentication information I give to the pre-call robot, the rep will ask me for again. Even the dang credit card number that is hard to give to a human. "No, that's Two as in Todd, Four as in Forage..."
And the Capital One credit card I got 3 years ago is still at $150 credit line. Apparently I have to pester them to get the credit line upgrade that the card promises, but why bother with a crappy company when I have a $2500 Discover card and good enough credit to have gotten better cards since then?
But I guess it's no surprise that the worse company to work with is swallowing the pleasant company. Just imagine all that money Discover was wasting by being a pleasant experience, like having credit lines that upgrade automatically and a customer support rep that speaks the same language.