What the discovery-capital merger means for their customers

Capital One has acquired Financial Discover, becoming the sixth Bank of the United States by the size of the assets.

During a profit call last month, CEO of Capital One, Richard Fairbank, said that the objective was to “preserve the best” from what discovers, as its advertisement and focus on customer experiences.

The acquisition of Capital One 35.3 billion dollars of discover was announced for the first time in February 2024.

The agreement was approved by regulators last month, despite the decline in the main democrats and consumer defenders who raised concerns about the slightest competition and risks to low -income customers and those who have bad credit scores.

The representatives of Capital One and Discover did not respond to a request for comments. On Monday, the two banks said that “customer accounts and banking relations remain unchanged” at the moment.

Here is what the customers of each of the two companies are to be won and losing the agreement.

What does merger mean for capital customers?

Much greater capital could mean more products, but some Democrats have warned of higher costs.

Capital One previously declared that the merger would increase competition with the Visa, Mastercard and American Express transaction giants and improve access to low -income customers.

In a white paper published in July, four economists and lawyers of the International Center for Law & Economics wrote that the merger could finally end the Visa and Mastercard “Duopoly”.

They added that the merger would allow Capital One to change its debit cards to discover the payment networks, and it could offer “more attractive products to depositors”. This could include free check accounts without minimum balance rules and debit cards with money back money for low -income customers.

Cost savings and other advantages of acquisition could also make capital a stronger competitor for “giants such as Jpmorgan Chase, Citibank and Bank of America”, wrote the ICLE group.

What does merger mean to discover customers?

The merger does not seem to mean large immediate changes. Discover said that accounts are not linked to the new business owner, so capital branches and customer service cannot help discover the products.

Finally, customers to discover can have better access to the bank via branches and automatic distributors of OneE capital tickets. Currently, Discover has only one physical outpost in Delaware.

Michael Shepherd, the acting CEO of Discover, said during a profits call last month that the agreement “would increase competition in payment networks” and “would offer a wider range of products”.

Reactions to the agreement

In a letter written to the federal reserve system earlier this month, the Maxine Waters representative of California and Senator Elizabeth Warren from Massachusetts argued that the merger would harm Capital One customers.

Warren and Waters are the best democrats of the Senate Banks, Housing and Urban Affairs Committee and the Chamber’s Financial Services Committee, respectively.

“These are not two traditional banks – they are credit cards giants,” they wrote.

Waters and Warren said that Capital One Post-Merger would have 40% of the market share of the issue of credit cards for general use. This would give Capital One the power to increase costs for merchants and reduce rewards and other advantages for customers.

“Traders would have no choice but to accept the terms dictated by the Capital One network, as they must access customers of the country’s largest credit card issuer,” they wrote in the letter.

Warren and Waters said it was “doubtful” that Capital One could solve the “myriads of problems” to which the faces discover.

“For about 17 years, discover millions of poorly classified consumer credit cards, which causes higher exchange fees for transactions,” wrote politicians.

In white paper, the iticle Economists and lawyers have written that a merger could improve data protection because the combined company would have the capacity to increase “financial investments in security”.

A larger company also means access to more data, which can be a plus, they wrote.

“The possibility of capturing and analyzing more data on more customers can also allow the larger and more competitive company to develop and offer new innovative products,” wrote experts in icle.