Americans’ reliance on credit cards is the key to Capital One’s bid for Discover

NEW YORK (AP) — Americans have become increasingly reliant on their credit cards since the pandemic. So much so that Capital One is willing to bet more than $30 billion that they won’t break the habit.

Capital One Financial announced Monday that it would buy Discover Financial Services for $35 billion. The combination could potentially shake up the payments industry, which is largely dominated by Visa and Mastercard.

For customers of the companies, it might eventually mean bigger perks and more merchant acceptance of Discover cards, and potentially lead to more competition in the payments industry. But most of the benefits will be going to the companies themselves, as well as the merchants who accept these cards.

Why is the deal important?

Some of the biggest issuers of credit cards are banks, like JPMorgan Chase and Citigroup. But Capital One and Discover are first and foremost credit card companies — like American Express, but with different clientele. They have tens of millions of customers and target their products at Americans who do not travel heavily outside the U.S. and would like to get more value out of their everyday purchases like gas, groceries and domestic travel. In other words, people who typically don’t carry premium credit cards.

The combined company will have more loans to customers on its credit cards than JPMorgan and Citigroup combined. The merger also gives the Discover network the ability to fight on more equal footing with Mastercard and American Express in a way that it simply hasn’t been able to in its 40-year history.

“You want the customer or merchant to choose you as a company, either for your products or for your brand, and this deal gives them plenty of opportunity to make that case,” said Sanjay Sakhrani, a payments industry analyst with Keefe, Bruyette & Woods.

Panorama Hispano is the regional news and information newspaper for Hispanic and other diverse communities.

US Hispanics are now the largest ethnic minority in the United States numbering 54.2 million as of July 2014. Serving: Buffalo, Rochester, Fredonia, Niagara Falls, NY and Erie, PA. Outside our Market area: Visit our affiliate at:

Contact us:

Featured News

Apr 14, 2024
Unfazed by danger and power, Guatemalan cardinal keeps up fight for migrants and the poor

HUEHUETENANGO, Guatemala (AP) — As more than 100 men carrying an elaborate float of Jesus halted before him, Cardinal Álvaro […]

Read More
Apr 14, 2024
Divisive? Not for moviegoers. ‘Civil War’ declares victory at box office.

Alex Garland’s provocative “ Civil War ” didn’t only ignite the discourse. The film also inspired audiences to go to […]

Read More
Apr 14, 2024
It’s almost April 15. Here’s how to reduce stress and get your taxes done

NEW YORK (AP) — For many people, tax season isn’t only about gathering W-2 forms or calling an accountant. It […]

Read More

popular categories

Featured (4,862)
Mundo Latino (1,972)
Locales / Regional (1,024)
Buffalo (2,015)
Dunkirk (1,590)
Rochester (1,569)
PA (1,166)
Negocios / Tecnología (939)
Tecnología y Science (192)
Salud (537)
Deportes (783)
Entretenimiento (720)
Extras (396)
Movies (203)
Viajes, Vida y Estilo (657)
Copyright © 2024 Panorama Hispano News. All Rights Reserved.
linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram