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Discover is now part of Capital One

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Re: Discover is now part of Capital One

#51

Post by [deleted] »

jedbrooke wrote: post #23
christophilus wrote: post #6

I know nothing. But this is an interesting acquisition. Capital One strikes me as a pretty well run org. Why would they want Discover, who notoriously targets the low end of credit card custom? My guess is that this gives them the ability to increase margins by owning the entire payment layer all the way through distribution. If they slash the fees charged to merchants, this could make them quite a powerhouse.

as I understand it, Discover gets to charge higher fees on debit cards (than eg visa and mc) due to some regulatory carve out, so capital one wants to take advantage of this and Discover’s payment network

[deleted]

Re: Discover is now part of Capital One

#52

Post by ravenstine »

coldpie wrote: post #49
ravenstine wrote: post #43

Earlier quoted context omitted.

How common is it really that Discover isn't accepted these days? I don't have Amex, so not really sure about that, but I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it – and neither of them were worth returning to anyway.

> I've been using Discover for years and I think I've only ever encountered 2 places that didn't take it Really? For brick & mortar retail, my experience is pretty much only the major retailers accept it. Most small, local, or even regional retailers do not accept it.

I've used my Discover card at a bajillion bars, restaurants, and stores this last 2 years, all ranging from dives and mom & pops to bigger retailers and haven't had a single problem in that time. Then again, I've been living in Boston and Los Angeles, so maybe Discover is more accepted in major cities?

Re: Discover is now part of Capital One

#53

Post by silisili »

hombre_fatal wrote: post #45

Ugh. Moving back to the US after a decade abroad, I had to get credit cards to rebuild my nonexistent credit. Discover and Capital One both had deposit-based credit cards for credit building, so that's what I started with. Discover's customer support system was polished and felt like a small company. I'd always speak to a polite native English speaker. When I gave authentication information to the pre-call robot (lik…

I really like Discover for the reasons you stated. It was my first CS experience where you called a number and a person just answered...imagine that.

Similarly, I detest Capital One for a whole host of reasons.

Just last month I was looking to switch banks, read great things about Discover, only to realize they'd be absorbed soon. Hard pass.

I wish this deal were never approved. I can't see Discover going away, nor Capital One growing, as good things.

Re: Discover is now part of Capital One

#54

Post by kulahan »

christophilus wrote: post #6

I know nothing. But this is an interesting acquisition. Capital One strikes me as a pretty well run org. Why would they want Discover, who notoriously targets the low end of credit card custom? My guess is that this gives them the ability to increase margins by owning the entire payment layer all the way through distribution. If they slash the fees charged to merchants, this could make them quite a powerhouse.

Capital one also targets primarily lower end customers. Many of their cards just have usage fees despite being terrible cards in general.

Re: Discover is now part of Capital One

#55

Post by greenavocado »

mplewis9z wrote: post #15
christophilus wrote: post #6

I know nothing. But this is an interesting acquisition. Capital One strikes me as a pretty well run org. Why would they want Discover, who notoriously targets the low end of credit card custom? My guess is that this gives them the ability to increase margins by owning the entire payment layer all the way through distribution. If they slash the fees charged to merchants, this could make them quite a powerhouse.

Capital One’s personal lending is also notorious for targeting the mid-to-low end of credit card customers. They routinely deny people for credit cards if it looks like the applicant pays off their cards in full every month - they love a customer with a credit profile that has no negative marks but with a moderate debt-to-income ratio that means they’ll get those sweet interest payments.

Subprime borrowers are categorically unsophisticated. If you look at the transaction data you will frequently see patterns like someone paying the minimum balance for 15 years instead of declaring bankruptcy strategically. The amount of unnecessary interest payment is insane.

Re: Discover is now part of Capital One

#57

Post by jimt1234 »

Dumb question: Why are payment networks so difficult? My vague/naive assumption is it's because of complex banking/financial regulations and legacy banking systems. But honestly, from a technical perspective, I don't see it as so complicated. Anyone reading this could create a transactional system for "payments", open it to the public and scale it - basically, Venmo. The only major costs I can see are "infrastructure" and dealing with fraud. ???

Re: Discover is now part of Capital One

#58

Post by the_sleaze_ »

hombre_fatal wrote: post #45

Ugh. Moving back to the US after a decade abroad, I had to get credit cards to rebuild my nonexistent credit. Discover and Capital One both had deposit-based credit cards for credit building, so that's what I started with. Discover's customer support system was polished and felt like a small company. I'd always speak to a polite native English speaker. When I gave authentication information to the pre-call robot (lik…

Opposite experience. I love Capital Ones interface, and their customer support is good. Usually I'll get a customer support agent state-side.

> the rep who sometimes gets mad at me for it

That's an ...unusual customer support experience.

> my Discover card kept me up to date with it's upgrade status

My capital one card does the same, it periodically requests updates to my income after which my credit line increases.

The only friction I experience with Capital One is the lack of physical presences. There are none in my entire region. That being said it is a great bank that never - and I mean never - has played games with auto-pay suddenly and silently failing at the due date (and incurring a late fee of course oopsies), or other annoyances I've had with Discover.

Re: Discover is now part of Capital One

#59

Post by greenavocado »

JCattheATM wrote: post #42
jldugger wrote: post #37

Earlier quoted context omitted.

I suspect the trick here is that capitalone issues so many other cards that once they standardize on it, merchants can't refuse their network without losing substantial amounts of business.

Or customers start bailing because no one accepts their cards and the whole thing backfires...

What C1 has to do in the short-term is give customers a deal they cannot refuse to get them hooked. They can bag em and tag em later.

Re: Discover is now part of Capital One

#60

Post by monksy »

christophilus wrote: post #6

I know nothing. But this is an interesting acquisition. Capital One strikes me as a pretty well run org. Why would they want Discover, who notoriously targets the low end of credit card custom? My guess is that this gives them the ability to increase margins by owning the entire payment layer all the way through distribution. If they slash the fees charged to merchants, this could make them quite a powerhouse.

From the people that I know that work at Capital One.

That is certainly not the case. It's full of ex-Amazon managers that only want to pile on and then aggressively stack rank engineers to fire them. Heck they even do the whole hire someone to fire them.

> Why would they want Discover, who notoriously targets the low end of credit card custom?

More revenue and cheaper admin/labor costs since they're already in the space.

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