Visa and Mastercard and their highly anticompetitive tactics early in the network landgrab for the payment card space foretold what would happen in the tech space (that is to say do whatever you can to win the landgrab which is exactly what Google/FB did). DFS never caught on. Now the landscape has changed and this deal sort of serves as a bookend. People in fintech should go after the Visa/MC monopoly. There is no “network” and people are paying legacy fees just because it’s what they know.
Capital One to buy Discover Financial in $35B stock deal
11–20 of 127 posts
Re: Capital One to buy Discover Financial in $35B stock deal
#12> The deal, which is expected to receive intense antitrust scrutiny, So... it is highly possible/more than likely it will not go through?
I mean, T-Mobile bought Sprint. Antitrust laws might as well not exist in America
Re: Capital One to buy Discover Financial in $35B stock deal
#13Earlier quoted context omitted.
One can hope. The novus network attempts to provide a semblance of competition to AMEX, Visa and Mastercard in the US.
Do North American consumers/merchants pay less in processing fees overall than European/Asian counterparts or is it roughly 1-3% all over the world?
As far as I can tell, consumer interchange fees in the US are significantly higher than they are in Europe. The interchange fees for Visa and MC consumer products within the EEU are 0.2–0.3%[0][1], whereas in the US they are from 1–3%[2][3].
[0] https://www.visa.co.uk/dam/VCOM/regional/ve/unitedkingdom/PD...
[1] https://www.mastercard.co.uk/content/dam/public/mastercardco...
[2] https://usa.visa.com/content/dam/VCOM/download/merchants/vis...
[3] https://www.mastercard.us/content/dam/public/mastercardcom/n...
Re: Capital One to buy Discover Financial in $35B stock deal
#14> The deal, which is expected to receive intense antitrust scrutiny, So... it is highly possible/more than likely it will not go through?
basically deal goes thru is p(republican admin takes over) + p(win in court) + p(settlement deal of some sort).
You should replace all + with * in your formula.
Re: Capital One to buy Discover Financial in $35B stock deal
#15Visa and Mastercard and their highly anticompetitive tactics early in the network landgrab for the payment card space foretold what would happen in the tech space (that is to say do whatever you can to win the landgrab which is exactly what Google/FB did). DFS never caught on. Now the landscape has changed and this deal sort of serves as a bookend. People in fintech should go after the Visa/MC monopoly. There is no “…
My feeling is Google / FB have done nothing close to Visa / MC when it comes to landgrabbing, but I am open to information / arguments.
Re: Capital One to buy Discover Financial in $35B stock deal
#16Visa and Mastercard and their highly anticompetitive tactics early in the network landgrab for the payment card space foretold what would happen in the tech space (that is to say do whatever you can to win the landgrab which is exactly what Google/FB did). DFS never caught on. Now the landscape has changed and this deal sort of serves as a bookend. People in fintech should go after the Visa/MC monopoly. There is no “…
https://www.axios.com/2023/07/22/fednow-instant-payments-cre...
Networks (credit card rails) are dead long term. Capital One is buying a less than prime customer base instead of organic growth (plus the deposits). The profit is in the revolving interest on a customer base that carries a balance, not the interchange and network.
https://investorrelations.discover.com/newsroom/press-releas...
This should come as no surprise, as subprime is what Capital One does.
https://newrepublic.com/article/155212/worked-capital-one-fi...
Tangentially, it’s questionable how sustainable this is. This customer base is under material financial stress, and no one knows what’s going to happen next.
https://fred.stlouisfed.org/series/CCLACBW027SBOG
https://fred.stlouisfed.org/series/DRCCLACBS
https://www.cnbc.com/2024/02/06/credit-card-delinquencies-su...
Re: Capital One to buy Discover Financial in $35B stock deal
#17Re: Capital One to buy Discover Financial in $35B stock deal
#18I've always heard Discover was a good company to work for and they had the best customer support. Capital One is the opposite of both of those things so I hope the government steps in here.
I know someone who wasted two years trying to use a capital one secured credit card to help rebuild their credit history. The initial card offer was a $300 secured card and they figured it was the best they could do, ho hum, and just patiently plugged away
For two years, they used the card routinely, paid if off religiously...sometimes having a monthly spend three times the limit.
They would periodically request either a security deposit refund or to have their credit limit raised - more security deposit or not. Constantly denied, automatically, even when trying to escalate it with customer service agents. I forget the term, but when you essentially trade in one type of card for another from the same company - tried that too. Denied.
Finally, on a whim they tried another company, and got instant approval for an unsecured $3,000 limit card.
They stopped using the Capital One card except for a service or two that totaled $10, maybe $20/month.
2-3 months later, Capital One did a soft pull where the new card showed up and within days of the pull, refunds the security balance and moves them to an unsecured card with $3k credit limit.
Re: Capital One to buy Discover Financial in $35B stock deal
#19> The deal, which is expected to receive intense antitrust scrutiny, So... it is highly possible/more than likely it will not go through?
There’s absolutely no fucking chance this deal goes through in the current climate. It’s not clear why they are even trying.
It’s not just the Biden antitrust contingency it’s going to be Visa/MC and the other big banks lining up against it too. And there’s a non-trivial coalition of Republicans also against this kind of thing.
Re: Capital One to buy Discover Financial in $35B stock deal
#20> The deal, which is expected to receive intense antitrust scrutiny, So... it is highly possible/more than likely it will not go through?
basically deal goes thru is p(republican admin takes over) + p(win in court) + p(settlement deal of some sort).
a republican admin denied Visa + plaid... so I wouldn't assume anything