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Capital One's acquisition of Discover

Posted by (Massachusetts) on

Hi all,

I searched the forum but I could not find any previous discussions on this subject. About a year ago, Capital One announced its planned acquisition of Discover. Capital One plans to ditch the Visa/Mastercard networks and switch to using Discover's payment processing network.

https://finance.yahoo.com/news/capital-one-acquire-discover-means-161220705.html

https://www.cnet.com/personal-finance/credit-cards/have-a-capital-one-credit-card-the-discover-merger-could-change-how-you-pay/

“Over time, we will move a growing portion of the credit card business to the Discover network” said Richard Fairbank, CEO of Capital One, on an investor presentation call.

Why does this matter?
Discover's network is smaller and is not widely accepted, especially outside the US.

CapitalOne is often recommended on this forum, and like a lot of people on this forum, I have a CapitalOne credit card, which is my primary card I use at home and during my travels in Europe. I have been a happy customer for a very long time.

Should I be concerned that I may need to look for another credit card that uses the Visa/Mastercard network to use abroad? Am I overthinking this? Have any of thought about the implications of the merger on your travels?

Looking forward to your thoughts,
Mary

Posted by
1440 posts

I've never heard of Discover. I'd have assumed most of the banks here in the UK are issuing Visa, but on a cursory Google, it seems 50/50ish with Mastercard. HSBC issue Discover here seemingly, as do Chase, but I don't think they have many UK customers. It should in theory be accepted in the UK where Mastercard and Visa are. I can't imagine HSBC issuing a card that people would have problems using.

Your mileage may vary in other countries on the continent.

Posted by
2708 posts

Well, that sucks. I use a Capital One card as my primary card, both here and abroad. Since it's a MC, I also carry a visa card too as a backup.

Posted by
1973 posts

Not sure of all the implications, but why not just get a Visa card that has no foreign transaction fees. Chase has many and I am sure there are others.

Posted by
2855 posts

I do not know what this means either, but I find it hard to believe that Capital One would do something with their credit card processing that would make them usable in less places. It would drastically reduce their revenue, and what company does that? I'd hold tight until more is known. If you do want to get another credit card with no foreign transaction fees... PNC Bank now has one, but not all their cards are foreign transaction fee free, so make sure you get the right card.

Posted by
907 posts

I’m not worrying about mine right now, but if this does come to pass and they do go to Discover network, I will cancel that card and use another one. I’ve been very happy with my Capital One card, but…

Posted by
28864 posts

I have two other no-fee credit cards, in addition to my Capital One card, but my back-up ATM card is tied to a Capital One 360 account. I wonder whether there are any changes in the works there.

Posted by
8702 posts

Interesting, Mary. I have about 8-9 major credit cards, so it's no problem for me to use a different one (in fact, the Chase Sapphire Preferred is my usual go-to card) but I do wonder at CapitalOne doing this. Maybe it will save them enough money that they don't care?

Regardless, I think everyone should always have a good backup Visa/MC when traveling abroad. You just never know what will happen.

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