Capital One Financial received approval from both the Federal Reserve and the Office of the Comptroller of the Currency on 18 April 2025 for its $35 billion acquisition of Discover Financial Services.
The combination of the two institutions would create the largest credit card issuer in the United States measured by loan balances.
THE TRANSACTION
Capital One announced the Discover transaction on 19 February 2024. Capital One proposed to acquire Discover, which operates one of the four major United States card payment networks in addition to its consumer banking and credit card lending businesses.
Consumer advocacy groups and a number of elected officials raised objections during the public comment periods that formed part of the regulatory process, arguing that consolidation among the largest card issuers could reduce competitive pressure and ultimately harm borrowers through less favourable terms.
The review process lasted nearly fourteen months.
PAYMENT NETWORK
By acquiring the network, Capital One would gain the ability to route card transactions processed on its own issued cards through the Discover network rather than paying processing fees to Visa or Mastercard — a structural cost advantage that management argued would generate substantial long-run savings and improve the economics of its card lending business over time.