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Capital One to buy Discover Financial in $35B stock deal

reuters.com

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Re: Capital One to buy Discover Financial in $35B stock deal

#81

Post by op00to »

NoPedantsThanks wrote: post #55
op00to wrote: post #10

Earlier quoted context omitted.

Amex treats me far better than Discover.

Oh yeah, AmEx, the company that detects fraud on your account, cancels it, and then DOESN'T NOTIFY YOU. So you start getting notifications from vendors that they canceled your orders right before Christmas, because of trouble with your card. When you call AmEx and ask why the fuck you weren't notified of fraud on your account, they say (and I quote): "Oh we don't do that. We wait for the customer to get in touch with…

I’m sorry you had that experience, it seems like it really affected your holiday.

I have been proactively notified about fraud by Amex, Discover, as well as other banks. Amex seems to be the loosest with allowing questionable but valid purchases, and my Visa cards the strictest.

Re: Capital One to buy Discover Financial in $35B stock deal

#82

Post by laylower »

lvl102 wrote: post #11

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 “…

Why are you not including amex in your point I am wondering?

Re: Capital One to buy Discover Financial in $35B stock deal

#83

Post by alephnerd »

Kbelicius wrote: post #79
pasttense01 wrote: post #31

Earlier quoted context omitted.

No. For many of us it irrelevant if there is duopoly in the ad space because we don't use Facebook and we use ad-blockers. But in the payment space VISA/MC charge high fees which are passed onto all consumers.

> For many of us it irrelevant if there is duopoly in the ad space because we don't use Facebook and we use ad-blockers. But in the payment space VISA/MC charge high fees which are passed onto all consumers. Products that you buy have their marketing priced in. Even if you don't see the adds you are still paying for them.

> Products that you buy have their marketing priced in. Even if you don't see the adds you are still paying for them

Marketing costs are not included in Gross Profit Margin calculations, and don't have an impact on COGS.

Marketing spend is primarily used to grow your TAM and channel customers to your product, but is very marginal spend wise.

Re: Capital One to buy Discover Financial in $35B stock deal

#84

Post by kaynelynn »

pasttense01 wrote: post #31
lvl102 wrote: post #28

Earlier quoted context omitted.

I actually think it’s worse because it’s not as natural of a monopoly as it was for the payment network space. Google and Meta actively created a duopoly in the ad space and at a global scale too.

No. For many of us it irrelevant if there is duopoly in the ad space because we don't use Facebook and we use ad-blockers. But in the payment space VISA/MC charge high fees which are passed onto all consumers.

Visa and MC only take .1% of the 2.9% you are thinking of. The rest goes to the banks on either side of the transaction (one for the merchant, one for the purchaser).

They are however building more “solutions” to try and capture more of the transaction fees, but most people’s disdain for the payment rails would be better redirected at the banks in this case.

Re: Capital One to buy Discover Financial in $35B stock deal

#85

Post by Turing_Machine »

KennyBlanken wrote: post #18
BadHumans wrote: post #6

I'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 eith…

> For two years, they used the card routinely, paid if off religiously...sometimes having a monthly spend three times the limit.

While I don't know exactly what's going on in your friend's case, this makes for an unprofitable customer from the credit card company's point of view.

Now, obviously they want to get paid, but for them the ideal customer is one who maxes out the card and then makes the minimum payment every month, thus incurring an interest charge, or better still, makes the minimum payment, but late, thus incurring a late fee on top of the interest.

Customers who pay off the card every month don't provide any interest to the credit card company.

Re: Capital One to buy Discover Financial in $35B stock deal

#86

Post by silexia »

Antitrust help is badly needed here. I recently tried to open a new Capital One card despite having two very old high spend accounts that are always paid off and got denied twice. I have zero debt and millions in assets. The first time I was denied it was some TransUnion thing. The second time it was basically random. There is no person to call and reopen your case, you just have to start over from scratch and hope you mysteriously float through.

Re: Capital One to buy Discover Financial in $35B stock deal

#87

Post by missedthecue »

TheCaptain4815 wrote: post #78
kmeisthax wrote: post #75

Earlier quoted context omitted.

It's legal because the 1st Amendment is narrowly drafted to the point of uselessness. Censorship is only the result of actions by the sovereign - i.e. the local legitimate violence monopoly. Any other kind of monopoly? Sorry, that's actually just their freedom of association. And, ironically, their own freedom of speech: Comcast argued in front of courts that any sort of common carrier regulation on Internet traffic…

Well because these banks can only function from the money they borrow from the government, it’s insane they’re allowed to censor 1st amendment protected speech.

I don't think banks borrow any money from the government, unless you're thinking of really convoluted things like the department of agriculture partially insuring equipment loans to farmers against default.

That's not borrowing from the gov. and it's not even most banks though.

Re: Capital One to buy Discover Financial in $35B stock deal

#88

Post by finfrastrcuture »

This is a generally unsurprising event to industry, but exciting nevertheless.

Cap One and Discover both focus on the nearprime / subprime / thin credit / credit invisible segments (think people who have bad credit, expats, students, etc.). Cap One is excellent in their analytics on understanding people, and likely sees Discover as an opportunity to acquire new customers + improve on Discover's operations.

The network side of Discover's business is intriguing. Its nowhere near as sophisticated as Visa/Mastercard, but it is something! The idea may be to turn into an Amex focused on everything but prime consumers, and use the improved economics (from owning both sides of the transaction) to give rewards (at least something) to cardholders who don't normally see them. I doubt their intention is to build a serious competitor to the card networks.

Re: Capital One to buy Discover Financial in $35B stock deal

#89

Post by mlrtime »

sodality2 wrote: post #32
BadHumans wrote: post #6

I'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.

To add more anecdata: C1 has all of my accounts from savings, checking, and two CC's. I've never had a problem. Their customer support has always helped. That being said, all my eggs in one basket is terrible (though instant transfers + 4.35% savings is great - I keep about $30 in my checking and transfer over whenever a charge will go through, and thus maximize my interest gained!)

A bit off-topic but this seems a bit risky to me. I always keep two completely separate banks with a balance to sustain me 30 days. (I know this is a luxury).

I fear a bank locking my account(s) and unable to pay bills.

Re: Capital One to buy Discover Financial in $35B stock deal

#90

Post by EVa5I7bHFq9mnYK »

NoPedantsThanks wrote: post #50
lvl102 wrote: post #11

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 “…

Not to mention that retailers are getting screwed harder all the time. I thought that the major cards had set fees across their brands, but NO: retailers are screwed at all different levels by different ISSUERS. Apparently Capital One is one of (if not THE) worst, coming in at something obscene like 4.5%. That's the entire profit margin of some businesses. At least some places like L.A. are taking tiny steps to preve…

I think they should outlaw the clause in the CC contracts that forbids discounts for cash payments.
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