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products with the same issuer, in par-
ticular deposit accounts, and more
likely to have strong credit scores,
a fact which may only add to the fi-
What's ahead for payments after the Capital One/Discover Deal? nancial opportunity and momentum
within the combined companies.
e wish to thank John Cabell, managing director of payments
intelligence at J.D. Power, for the following insights sent in "Meanwhile, as a major player in
response to news of Capital One and Discover's plans to combine small business credit cards, Capital
W forces and become a new payments industry powerhouse: "Can One could fill a role that Discover
Capital One and Discover create a team formidable enough to seize the lead had abandoned. Within recent years
among top credit card issuers?," Cabell wrote. "If they can combine their best Discover stopped issuing new small
attributes, they may have a chance. "On their own, both companies currently business cards, and the new corpora-
trail the top performers. Capital One lags behind JPMorgan and American tion could relaunch or introduce new
Express in purchase volumes, while Discover is in a distant fourth when it small business products to gain more
comes to total network volume. Both brands currently trail American Express customer volume.
in issuer customer satisfaction.
"The combined company can also ex-
"As a combined entity, though, the two could be much stronger. The merging pand the reach of the Discover card
of Discover’s customer-focused culture and Capital One’s card product domi- network. As potentially the largest is-
nation could be unprecedented. According to J.D. Power data, Discover card suer in the U.S. post-merger, it could
customers tend to be more loyal than those of Capital One, with 49% of holders put more pressure on competitors to
having their cards for more than five years compared to 25% for Capital One. compete on transaction pricing and
By contrast, with more new customers, Capital One earned J.D. Power awards newly available payment types with
for highest satisfaction in two card products in 2023. What’s more, Discover merchants. If that leads to the new
customers have been less likely than Capital One customers to have multiple Capital One/Discover network be-
ing used at more retailers with more
card and non-card payment types, it
should improve its market share, as
J.D. Power data show customers are
more likely to add a card or use a
payment type that is accepted every-
where. That is a current pain point
for Discover customers, as they re-
PAYMENT FORM GENERATOR port their cards being less likely to be
accepted everywhere and less likely
to cite acceptance as the reason for
opening a card, compared to Visa or
EASY TO USE: Mastercard.
"A new, more robust competitor in
We Host Page the payments space could be a potent
force for change. How consumers and
Pay Link other industry players react remains
to be seen. The months ahead will
Embed Code certainly be exciting as a new future
emerges."
Inventory How will the merger
affect your business?
Level Ill What do you believe the impact of a

ACH Capital One-Discover merger will be
ACH
on the industry overall and on your
business in particular? Share your
thoughts on this question or on other
C A L L F O R T R A I N I N G issues of concern to the industry at
8 0 0 - 2 9 6 - 4 8 1 0 greensheet@greensheet.com.

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