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Discover is now part of Capital One

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Re: Discover is now part of Capital One

#81

Post by chasil »

jdeibele wrote: post #74
chasil wrote: post #66

Earlier quoted context omitted.

What I am actually seeing are restaurant receipts with "price for cash" and a higher "price for credit." I am not seeing this for groceries or other goods. I understand that the "Durbin Amendment" had something to do with this. https://en.wikipedia.org/wiki/Durbin_amendment

Had an eye exam this morning and I needed to do a $30 co-pay. Pulled out a card to pay and I was asked if it was a credit card. I said yes and she said there'd be a 3% fee for using a credit card. I switched to my Discover debit card, which pays 1% back. My only recent experiences with this with transactions over $10 was a small restaurant and a construction project where they took the deposit on a card but would cha…

I'm looking at a receipt in an Iowa restaurant that says "Total: $13.23; Pay With Cash: $12.71."

Re: Discover is now part of Capital One

#82

Post by const_cast »

lxgr wrote: post #71
ethbr1 wrote: post #70

Earlier quoted context omitted.

Underappreciated reason, when system observations are made: - Discover was founded in 1985 (credit card only, by Sears) and began banking in 2006(?) - Capital One was founded in 1994 (credit card only) and began banking in 2005 Legacy systems suck , especially if the parent company has underinvested in IT modernization for decades. Delta? Southwest? And younger companies don't have to deal with the pre-digital legacy…

Counterpoint: Amex has been issuing charge cards since the 50s, and their tech seems leagues ahead of Discover, for both charge/credit cards and checking accounts (based on my first impressions for the latter; I haven't really used their checking account as my main account).

Yes, Amex has the best app out of all banking I've used thus far. It's very fast, the UI is easy to understand, and you can do what you need to do quickly and painlessly.

Re: Discover is now part of Capital One

#83

Post by const_cast »

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.

This was the Amex experience too until square came out. That little card reader that plugs into ipads and phones. These days, most small businesses are just using that, and that supports everything.

Re: Discover is now part of Capital One

#84

Post by BobaFloutist »

jimt1234 wrote: post #57

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…

I would imagine network effects are a pretty big barrier to entry.

Re: Discover is now part of Capital One

#85

Post by [deleted] »

jimt1234 wrote: post #57

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…

[deleted]

Re: Discover is now part of Capital One

#86

Post by jldugger »

trollbridge wrote: post #69
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.

It is very likely C1 will move away from MC/Visa. There's a massive amount of money on the table for them in the form of interchange fees. They're effectively becoming the next American Express. From a competitive landscape, this is probably a good thing - Discover never really did much issuance of cards by other banks, and this means competition against Amex.

For the record, I believe we are saying the same thing.

Re: Discover is now part of Capital One

#87

Post by jldugger »

Kon-Peki wrote: post #75
greenavocado wrote: post #59

Earlier quoted context omitted.

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.

Discover has something like 150-200 different card designs that people can choose from, and they let you change them out almost as often as you want. You can even have more than one active at a time - perhaps keep one for your professional adulting wallet and another for your wild nightlife wallet. Better marketing around this would likely improve signups. I've had one in my wallet since college; it has never been a…

> Better marketing around this would likely improve signups.

For 2023, the Capital One was the fourth largest issuer[1] by purchase volume. Post merger would put them at number three. The challenge isn't signups, it's retention. Discover being in the subprime category means it's often a borrower's oldest account and thus likely to be sticky. Capital One is no slouch either.

But also: this may not even be a credit card play. Matt Stoller points out that there's a loophole in the Durbin rules for debit cards that hasn't been a factor until today: the rules that cut debit fees in half in 2011[3] only regulate networks operating as middlemen between banks and merchants. So presumably they can take those fees and double it again, at which point it's a fascinating question of who blinks first: merchants or Capital One.

[1]: https://money.usnews.com/credit-cards/articles/biggest-us-cr...

[2]: https://www.thebignewsletter.com/p/the-fed-is-behind-the-cap...

[3]: https://www.federalreserve.gov/paymentsystems/regii-average-...

Re: Discover is now part of Capital One

#88

Post by Schiendelman »

coldpie wrote: post #63
ravenstine wrote: post #52

Earlier quoted context omitted.

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?

Interesting! I wonder if it's a regional thing. I'm in the Twin Cities, so not a small town. Some smaller places do accept it, but I find it's pretty rare.

Others have noted that it's accepted anywhere Diner's Club is - you often see the DC logo without realizing that's Discover network.

Re: Discover is now part of Capital One

#89

Post by mulderc »

0xC0ncord wrote: post #44
mulderc wrote: post #14

Earlier quoted context omitted.

Well run? Haven’t they had lots of legal issues over the years? https://en.m.wikipedia.org/wiki/Capital_One#Investigations_a...

Seems like nothing more than the cost of doing business.

Do you honestly think defrauding your customers out of billions is the cost of doing business?

Re: Discover is now part of Capital One

#90

Post by cardassia »

monksy wrote: post #60
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 s…

I’ll confirm this, the place is a complete mess. Better than most financial “tech” companies but the workplace and managers are SO toxic.
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