Capital One Is Buying Discover (wsj.com) 178
Capital One is buying Discover Financial (non-payalled source) in a deal that would marry two of the largest credit-card companies in the U.S. WSJ: The all-stock deal could be announced Tuesday, according to people familiar with the matter. Discover has a market value of $28 billion, and the takeover would be expected to value it at a premium to that. Buying Discover will give Capital One, a credit-card lender with a market value of a little over $52 billion, a network that would vastly increase its power in the payments ecosystem.
Card networks are critical to enabling transactions and setting fees that merchants pay when consumers shop with credit cards. Though much smaller than Visa and Mastercard, Discover is one of the few competitors to those companies in the U.S. and it is one of a small number of card issuers that also has a payments network. Capital One, the ninth-largest bank in the country and a major credit-card issuer, uses Visa and Mastercard for most of its cards. The bank plans to switch at least some of its cards to the Discover network, while continuing to use Visa and Mastercard on others. Those larger networks have more merchant acceptance abroad than Discover does. Update: Capital One has proposed to pay $35.3 billion for Discover in an all-stock deal.
Card networks are critical to enabling transactions and setting fees that merchants pay when consumers shop with credit cards. Though much smaller than Visa and Mastercard, Discover is one of the few competitors to those companies in the U.S. and it is one of a small number of card issuers that also has a payments network. Capital One, the ninth-largest bank in the country and a major credit-card issuer, uses Visa and Mastercard for most of its cards. The bank plans to switch at least some of its cards to the Discover network, while continuing to use Visa and Mastercard on others. Those larger networks have more merchant acceptance abroad than Discover does. Update: Capital One has proposed to pay $35.3 billion for Discover in an all-stock deal.
credit cards (Score:3, Insightful)
Credit cards are the fastest path to financial subservience.
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That's pretty much their business model. They figure out how much you can afford each month, then give you a credit limit where that's what you'll roughly be paying in interest each month if you run up the balance. Then if you stop paying them, they sue you.
Fun times.
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monopoly.
a neon god.
billionaires made.
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I had not had a credit card ever in my life, until about 10 years ago.
Suddenly my credit went up from upper 600s to mid 700s.
I have no other debt, I pay for things in cash, so why is debt related to credit score, something that is supposed to understand your debt risk and limits?
Because its a capitalistic system owned by capitalists that literally want you to be in debt to borrow from them. That way, the possibility of owning you and your things is higher. Its literally
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Your credit score increased because you demonstrated that you pay your (new) credit card bill.
Nothing nefarious there, really.
Re:credit cards (Score:5, Funny)
Do they force customers to live on credit?
Asking just in case as I've been CapOne credit card customer for a bit over a year now and as of yet have not carried a balance. Wondering when the Capital One thugs will come knocking at my door threatening that I stop paying in full.
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Do they force customers to live on credit?
No, but human nature being what it is - when they give you that opportunity (aka "high credit limit"), it's very easy to convince yourself that it's okay to send more than you make because that really nice living room set is $200 off but only this week!
And if you're disciplined, there's nothing inherently wrong with doing that. But lots of people aren't disciplined, or aren't good at math... and end up with enough accumulated deferred purchases that they struggle to make ends meet.
The solution is probably j
Re:credit cards (Score:5, Informative)
I pay my cc off every month as well. In the cc trade, we are known as deadbeats. The cc companies still make money on fees they charge companies where you used your cc. That and they know EVERYTHING you buy. That data gets sliced and diced and sold off to the highest bidders, in different marketplaces. Each slice and dice has monetary value. And each slice and dice can be sold to more than one other company. Read the following to know just how you are being pimped out:
https://www.cbsnews.com/news/m... [cbsnews.com]
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It's been worth it for me. A short term 'interest free' loan, less need to carry cash, an intermediary such that random vendors don't have direct access to my bank account, consolidated payments, and the ability to raise and obtain assistance with disputes. And it ranks low in any assault from the targeted ad bogey-man. The only, albeit minor, regret is that I'm likely being subsidiz
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And I'm sure my bank would do the same exact thing. At least using my CC for every purchase gains me points that I can then use to get free stuff. I'm going to spend the money the same way so it's nice to get something back, even if it's very little. Using cash or my debt card almost never gains me anything and also puts me at a larger financial risk, aka I'd rather you steal my CC then my bank card. Much easier to dispute fraud with the CC company then argue with the bank to get your money back.
So really,
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I figure when I buy things with my cash back card, I'm basically getting everything at a 1.5% discount. And when I buy gas with my Costco card, I'm getting the gas at a 4% discount.
But that math only works if you pay it off in full every month, which we do.
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Everything you purchase has an associated code, so they may not know what you purchased, they know what type of item you purchased.
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They give me money for this (Score:2)
I'm a good deadbeat (and no ann fee) and just reap the the adjacent benefits. I get cash refund from them of a few bucks based on the amount I use it. I'm a total expense. I'd say, presumably, so I'll write stuff like this, but this all manifested before posting online was a thing. And capital one has a terrible reputation, I just never got bad treatment. They also have an browser plug-in shopping thing which they should work on. It's useful for one-use card numbers when it works. Discover, to me, was actua
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Now if Disco can be combined with those, that'd be great.
But I guess I'm just a financially subservient person getting free shit from money I have to spend anyway.
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my CapitalOne visa is my oldest cc, over 20 years. i've maxed it out and paid it off a few times in that stretch, and they diligently upped my limit into the tens of thousands, despite never making more than $40k a year in my entire stupid career. the last couple years i haven't carried a balance on that card, and just this week they sent me a notification that due to having a credit limit in vast excess of my balance, they are going to "review" my account in april and warn me that my limit will likely be l
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Re:credit cards (Score:5, Insightful)
Credit cards are the fastest path to financial subservience.
Not if you are able to control yourself.
Many ways to do it:
1.) Pay your full balance a couple of days before due date.
2.) Go each night and put in the card an ammount equal to the standing balance of that night.
3.) (the worst of them) Put the card in your "personal safe" and use it only for emergencies (with a clear and non frovolus definition of what an emergency is).
With 1 or 2, Credit cards are a good way to buiold up your credit score. and with 1, is a great way to get a 0 interest loan.
I myself go for scheme # 1
If you are not able/disciplined enough to go 1, 2 or 3, go the gordon Ramsey route, cancel all your credit and debit cards, and use cach only.
PS: Examples of good emergency definitions: I broke my arm. My car failed, I need said car to go to/from work
Examples of bad definitions of emergency: I threw an Xbox/PSx controller and damaged the TV, I need another TV. The Shoes I want are finally on sale, let's buy them before the sale is over.
Re:credit cards (Score:4, Insightful)
If you are not able/disciplined enough to go 1, 2 or 3, go the gordon Ramsey route, cancel all your credit and debit cards, and use cach only.
Is that Gordon Ramsey or Dave Ramsey?
The Gordon Ramsey route would be to learn how to check the doneness of a steak by touching it, and how to make a decent risotto, you donkey!
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cancel all your credit and debit cards, and use cache only.
FTFY
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Surprised there hasn't been a class action about this type of hidden cost.
It is a cartel at this point
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Discover Card's shtick is that if you pay your balance in full each month, you get 1% back (from the 3% or so merchant fees). The downside is that not everyone takes it. I've had a Discover card since the late '80s, and up until about 10 or so years ago, I had to have a Visa card as my second option. I think I still have one non-US payment per year that I make (to my domain registrar in Europe) where I have to use Paypal instead.
These days, when I get the e-mail notice that my bill is due, I just go to the
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Credit card companies do not make money on you. They make money on merchants. They charge you for being stupid and misusing the card.
But if used appropriately, credit cards are one of the most important pillars to financial success. Try getting a mortgage without credit history. Showing you're responsible with money is the fastest way to get institutions to give you money to buy assets and achieve financial independence.
Meanwhile if you're smart with your cards, you
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I am doing fine with a debit card except if I ever want to rent another place where I don't know the landlord personally I am going to need a 600 credit score. So I got a credit card.
The credit card is therefore just one tiny piece in the financial subservience puzzle. The fastest path to financial subservience is to live in a capitalist society.
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Banker? I wish. I work for a non-profit hospital.
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Not a banker? You don't say.
I hope you realize that giving tax breaks to the rich created the inequality that we have today, and that is Republican policy. Trickle-down was really trickle-up.
I couldn't give two fucks about income inequality. Want more income? Get a better job.
What did your guy actually do? https://www.factcheck.org/2017... [factcheck.org]
I don't like inflation anymore than you. I like taxing labor more than investment even less.
My guy lead troops in WWII and warned us about the military industrial complex.
Trump is a loser and should hang, along with Biden, Harris and every member of Congress.
Msmash loves paywalled content! (Score:5, Insightful)
Looks like I get my choice of a Wall Street Journal article that's paywalled, or an Axios Pro article which is also paywalled even though the link says that is isn't.
Damn, dude... are you even trying anymore?
Re:Msmash loves paywalled content! (Score:4, Informative)
Seriously, would it kill you to spend the extra 30 seconds to find a non-paywalled source like this CNBC article?
https://www.cnbc.com/2024/02/1... [cnbc.com]
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And yet, the CNBC article is paywalled TOO. So, yeah...
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1) go to https://archive.ph/ [archive.ph]
2) paste article into search box
3) read the article in less time than it took to type this post
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And yet, the CNBC article is paywalled TOO. So, yeah...
How is it paywalled? The article comes up without issue. Any problem must be on your side.
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Large box comes up saying, "Welcome to CNBC. Please support our journalism by allowing ads." Seems to be a paywall to me.
Unless you've already enabled ads on their site. Cannot say what the original poster has done.
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Why waste time reading an article when the summary clearly outlined all you need to know to participate in this discussion?
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Seriously, would it kill you to spend the extra 30 seconds to find a non-paywalled source like this CNBC article?
https://www.cnbc.com/2024/02/1... [cnbc.com]
No. It kills us to know that someone's job is to make Slashdot readable, and they are instead offloading this work onto thousands of people who each spend 30 seconds of their own time.
I'm more than happy to look up own links. All that I ask is for msmash to be fired for being shit at his job and making me do it. Maybe you can apply for the resulting opening. You seem to like playing the role of the editor, though I recommend not doing it for free like you are now.
The truly sad part is your UID is low enough
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I don't come here to do my own research. That's the whole point of news. The editors should do their damn job.
Re:Msmash loves paywalled content! (Score:5, Informative)
This is terrible news (Score:5, Insightful)
Re:This is terrible news (Score:5, Interesting)
I have accounts at Capital One (because they acquired my local bank 15 years ago), and with Discover (opened around the same time). Discover customer service has always been incredible, and Capital One has always been garbage. I have no doubt that Capital One's first move will be to bring Discover down to Capital One's existing level.
That was along the lines of my first thoughts as well. Discover is about as good as credit card companies get, which admittedly isn't saying a lot, but they at least seem to treat the people with the cards as if they have some form of value. Capital One throws fees and gotchyas at you faster than you can blink, and pretty much does nothing as far as customer service goes. OK, that's not true. They make it very easy to pay your bill. Outside of that? You're on your own.
Of *COURSE* Capital One would by Discover. Let's lower the bar for the entire credit universe. That seems like a good idea.
Now let's see how few of our regulators even so much as blink at this transaction.
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Discover is about as good as credit card companies get
I used to agree with that statement, until they went to the rotating quarterly rebate categories. Those kinds of games aren't what I look for in a credit card.
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Discover is about as good as credit card companies get
I used to agree with that statement, until they went to the rotating quarterly rebate categories. Those kinds of games aren't what I look for in a credit card.
Seems everything is in a down-spiral now. At least for those of us hanging on one of the lower rungs of the economic ladder.
I'd still say Discover is better than Capital One by several orders of magnitude.
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I have called both in the past and, expectedly, Captial One's foreign support was not as smooth.
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Discover customer service has always been incredible,
It's funny, I keep hearing people say that, which was the exact opposite of my experience. I had a Discover card for six months last year, and in that time had more problems with their customer service than I have had, in total, in twenty-five years or so with other credit card companies.
Never had any experience with Capital One for a credit card, but all I can say is good riddance if they kill off Discover.
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Discover customer service has always been incredible
I'm amazed that this is something that is needed. A quadruple amputee can count on their digits the number of times I've talked to any bank's customer support in the past decade +.
The best banks aren't the ones with good customer support, they are the ones which don't require you to call or contact them in the first place. Open accounts, close accounts, report cards lost, stolen, need a replacement, transfer money, report fraud, chargebacks, change my address, change my partner status, update tax informatio
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Yeah, Crapital One will crap all over Discover's superior customer service. They're basically just buying a book of customers.
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This. Discover was the last place with decent US-based customer service. Capital One I am sure will axe that immediately.
Get off my lawn (Score:5, Funny)
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Yep, and Craftsman tools were the best around, and DieHard batteries were warrantied for life.
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Yep, and Craftsman tools were the best around, and DieHard batteries were warrantied for life.
Now you're making me both sad and nostalgic.
Sears tires used to be very good too.
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Yep, and Craftsman tools were the best around
No, they very much were not.
For example Proto has always been better than Craftsman.
Only someone who hasn't had to work with tools for a living can think that Craftsman was ever the best.
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Only someone who hasn't had to work with tools for a living can think that Craftsman was ever the best.
Or, maybe someone who lived during the heyday of Sears.
Or, maybe someone who doesn't want to pay $800 for a set of wrenches. https://www.northerntool.com/p... [northerntool.com]
Yes of course, there are, and always were, better tools than Craftsman. But among the tools commonly availabnle at big box or mall stores, Craftsman was pretty good.
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Moving the goalposts.
Just admit you didn't know what you were talking about and move on.
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Yep, and they and IBM created Prodigy! [wikipedia.org]
Interesting times.
I'm not quite sure why this is allowed (Score:5, Insightful)
"marry two of the largest companies in any given field" should by default not be possible...
What possible good could come out of this for society as a whole?
Re:I'm not quite sure why this is allowed (Score:5, Insightful)
"marry two of the largest companies in any given field" should by default not be possible...
What possible good could come out of this for society as a whole?
This isn't about good for society. This is about good for the company. Less competition means higher fees and fewer services equals higher profits.
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Hopefully the relevant authorities can stop this. Almost no upside for society, and plenty of downside risk.
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Because they're still smaller than either of the other two big players. While this could theoretically enable stronger competition against the other two players, they'll settle back into an oligopoly and consumers won't really have any benefit to switching brands.
"Two of the largest" != "the two largest" (Score:5, Interesting)
"marry two of the largest companies in any given field" should by default not be possible...
What possible good could come out of this for society as a whole?
Because in terms of credit card payment networks, it's the Visa/MC duopoly. Discover is a distant 3rd, barely ahead of AmEx with 8%. Giving an also-ran more clout could enable more competition to the #1 and #2. They need to increase the number of users of their network. The CapOne acquisition will do that.
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If two can collude, then so can three.
Why not break up Visa and MC instead?
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"marry two of the largest companies in any given field" should by default not be possible...
What possible good could come out of this for society as a whole?
Regulators in charge of preventing mergers between large companies have switched to "whatever makes the owner class happy." Consolidation of wealth and power is good for the owner class and shit for society as a whole. That right there is win-win. At least until we get to the point where there is so little wealth below the owner class that no one can continue to pay them. We've probably still got a couple decades of wealth consolidation left in society before that point hits hard enough to make a difference
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The solution is to teach critical thinking and claims evaluation skills along with media literacy in our schools.
Which is why even very basic education on things like this is treated like "indoctrination" and is now its own moral panic.
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I don't get it. Because 22% of the population cares about morality, we therefore allow big companies to merge? What's the connection, exactly? And the other 78% doesn't have a say?
You don't understand the difference (Score:3)
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Why am I not surprised that rsilvergun reacts to a critical question with an ad hominem and then points to a youtube channel for "reeducation"?
Re:I'm not quite sure why this is allowed (Score:4, Funny)
I don't get it. Because 22% of the population cares about morality, we therefore allow big companies to merge?
There isn't a connection, it's just a flimsy opening for injecting yet another rant on an unrelated topic. This is Slashdot, after all.
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No because 22% of the country care about "morality" over things that are actually important like the long term economic health of the country.
If these people actually cared about morality they'd be one hell of a lot more upset about the fact that we lose 5 times as many people to gun violence than any other first world nation. But who cares about dead bodies when a trans kid might use the "wrong" bathroom, right?
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So you're saying that 22% are in control of the 78%? Last time I checked, we still get the power of the vote in this country. If 78% of the country cares more about *your* issues than about morality, why aren't they voting what they believe?
And just because *you* don't think morality isn't important, doesn't mean it shouldn't be important some some people. That's the real benefit of living in a democracy, we can argue about what's important, and live to argue some more. If you're so sure morality isn't impo
Do you take Visa? (Score:5, Funny)
Fry: "Do you take Visa?" Clerk: "Visa hasn't existed for five hundred years." Fry: "American Express?" Clerk: "Six hundred years." Fry: "Discover Card?" Clerk: "Hmm...sorry, we don't take Discover."
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And if you need further proof that this is really a thousand years ago, well, here's contemporary actress, Pamela Anderson!
Oh good (Score:3)
Consumers will surely benefit from this...
Capital One ruins everything they touch (Score:5, Interesting)
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Out of curiosity, what have they destroyed that you liked?
I have a CapitalOne360 account that I guess was formerly ING and it's been fine.
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The technology ING had was way better - the way the we
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I feel you on the local bank. My local bank, one with a long history in my area and the first bank I opened an account with in highschool, got bought out by Wells Fargo and it just went to hell. I'm still sad about that one. I'm not surprised that Capital One was similiar when dealing with a local bank.
On your other points, I've never had any issues with Capital One website or tech. I've used the chat function a handful of times over the years (I had an accidental late payment on a credit card once; one che
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I had a kids savings account with ING that got converted to Capital One. While their other savings accounts hiked up their savings rates with the Fed, the kids savings account rate stayed at around 1% until I finally closed it about a year ago.
Capital One... ripping off an 8 year old. That's certainly what's not in MY wallet anymore.
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CapitaOne360 is formerly ING and formerly Netbank.
Don't ask me how I know.
The FDIC saved their customers' funds.
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So my account is currently listed as a "360 Performance Savings" with 4.35% APR. Not too shabby. Not the absolute best, but not bad either. I haven't done anything to modify my account in years...
Why are companies allowed to buy other companies ? (Score:2)
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In the US, it would be generally classed as "freedom of association" as a Constitutional right in the absence of very strong exceptions. US law mostly starts from "everything is allowed" and then adds restrictions from there. Of course people forget that the lack of restrictions is supposed to drive more specific legislation in response to what abuses actually happen in the real world.
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The phrase itself isn't in there. It's an emergent trait that is reinforced by legal precedent regarding freedom of assembly and freedom of speech.
You suddenly Discover ... (Score:4, Funny)
... that you don't want your Discover card any more.
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I stopped wanting my Discover card when they stopped offering a simple cash rebate, and switched to rotating categories that you have to sign up for every quarter. Those kinds of marketing games are not customer-focused, but are more about being able to *say* they offer a great rebate while at the same time finding ways to get out of actually paying it because they know a significant portion of their customers will simply forget, or not bother, to sign up. That's when I switched to a credit card that offere
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That 1% on "everything" isn't what it used to be. From Discover's site:
Everywhere Else
You earn 0.25% cash back on all purchases at warehouse clubs, wholesale stores, discount stores and their affiliates (including grocery stores).
You earn 0.25% cash back on your first $3,000 in all other purchases and a full 1% cash back after that.
Rewards reset on the day after the last day of the billing period ending during your Anniversary Month shown on your monthly statement.
And as for the 5% rotating categories:
Earn 5% Cashback Bonus at Restaurants and Drug Stores, now-March 31, 2024, on up to $1,500 in purchases.
I spend about $3,000 per month on my credit card. With Capital One, it's a flat 1.5% on every dollar of that. At Discover, what the large print giveth, the fine print taketh away.
Discover was started by Sears (Score:3)
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That's because Discover was one of the first items of cargo Sears jettisoned as its ship started taking on water.
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Sears was good... but bad management... and a vulture CEO who's been gutting it for quite some time. Discover escaped before the inshitification.
M&A mania (Score:2)
Acquisitions BH huge companies should not be allowed. Capitalism is great, but only as long as the government regulates the excesses. M&A BG big companies destroys competition, and should - must - be prohibited.
Of course, money talks. And politicians are for sale.
Discover (Score:2)
Is Discover any good? What's the big advantage? I think I had Discover for some time in the 90s and then either ditched it or it ditched me for non-use. Do any places even accept Discover?
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Like any market with limited choice, its main benefit is that it's neither Visa nor Mastercard. Now since most people deal more directly with issuing banks, few people actually have the negative perception that should be associated with the other two. Which is why Discover is such a distant 3rd. People are far more likely to bounce around issuing banks for the major two every time there is a problem.
And they can get 50$ cash too (Score:3)
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That would be called a leveraged buyout. This is a stock swap deal. So they are charging Discover to their own Capital One card.
what is a payment network? (Score:2)
And why are they so exclusive in the age of the Internet? Why aren't stripe, square, etc payment networks directly?
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And why are they so exclusive in the age of the Internet? Why aren't stripe, square, etc payment networks directly?
A payment network is the behind the scenes "thing" that authorizes your payments, and does so faster than Bitcoin (even with lightning on top) or etherium (to name two examples).
For that sh1ft (of money) to happen, not only you need a bunch of Really-Really Fast (tm) Hardware and Software (mostly mainframes tuned for IOPS handling capacity), you also need to earn the trust of a bunch of banks around the world, and bankers being a conservative bunch, that's easier said than done.
Also, since "payment networks
Discover Already acquired Diners Club (Score:5, Insightful)
in 2008. Diners Club being the inventors of the Credit Card.
Without that merger, both Diners and Discover woud have died under the feet of the two juggernoughts that are Visa and Mastercard.
I know it goes against the grain of the /. zeitgeist, but I'd rather have 3 competitors, than nominally four, of which two are on life support, effectively being "monopoly shields" for the two big ones.
Anything that keeps Discover/Diners (and AMEX) viable, is the lesser of two evils.
Dead end tech (Score:2)
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Consumer: your greedy hands.