Capital One Financial Corp.’s possible purchase of Discover Financial Services could prove a costly shake-up for credit-card users, according to consumer advocates and payments experts. The potential $35 billion merger has prompted concern from consumer groups, who say it could allow Capital One
COF,
-1.08%
to push annual percentage rates on credit cards even higher in an already-high interest-rate environment.
Others say the most notable potential change could happen on the back end of the credit-card equation if Discover
DFS,
-0.97%
gets a much larger stage for its payment network. Discover is one of the few credit-card issuers to use its own network to process payments. At a time when lawmakers want to break up Visa
V,
+0.17%
and Mastercard’s
MA,
+1.12%
dominance in the payments market, the question is whether increased competition from another network could increase the “swipe fees” that merchants pay — and if customers would bear the cost. If Capital One’s acquisition gets regulatory approval, it would create the largest card issuer as measured by card loans outstanding, according to some counts. Capital One and Discover did not immediately respond to requests for comment. Could the Capital One-Discover deal lead to higher APRs on credit cards? The massive size of the dea …
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COF,
-1.08%
to push annual percentage rates on credit cards even higher in an already-high interest-rate environment.
Others say the most notable potential change could happen on the back end of the credit-card equation if Discover
DFS,
-0.97%
gets a much larger stage for its payment network. Discover is one of the few credit-card issuers to use its own network to process payments. At a time when lawmakers want to break up Visa
V,
+0.17%
and Mastercard’s
MA,
+1.12%
dominance in the payments market, the question is whether increased competition from another network could increase the “swipe fees” that merchants pay — and if customers would bear the cost. If Capital One’s acquisition gets regulatory approval, it would create the largest card issuer as measured by card loans outstanding, according to some counts. Capital One and Discover did not immediately respond to requests for comment. Could the Capital One-Discover deal lead to higher APRs on credit cards? The massive size of the dea …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]