By: Jessica Duncan, AVP Research & Insights

Last week, Capital One created shock waves when the 9th largest bank announced its plan to buy Discover in an all-stock deal. This would become one of the largest banking mergers and would have strong implications in the payments space. The message in Capital One’s press release to investors made it clear that the acquisition will propel Capital One to become one of the top global payment providers.

– Create a global payments platform at scale
– Combine Complementary Card Businesses
– Scale our “Digital First” National Bank

Read along as we speculate about what this merger could mean if it were approved.

Dominance in the Mailbox
Despite having smaller portfolios than some of their peers, Capital One and Discover are consistently amongst the top three card marketers based on total estimated mail volume. In 2023, the two issuers accounted for over 30% of all credit card direct mail offers observed by Competiscan’s consumer panel. If that same level of marketing would occur post-merger, their product offers would dominate the mailbox. In the rewards card space, Discover it and Capital One Quicksilver are steadily the two highest volume card offers in the mailbox. Plus, Capital  One holds the top market share in the non-rewards space with its Capital One Platinum Mastercard and most recently established its presence as a premium card provider with the Venture X Card.

Super-Sized M&A Communication Strategy
Between the two organizations, 100 million+ consumers are now wondering what this merger means for their accounts. The deal would make Capital One the sixth-largest bank and the new owner of the fourth-largest network for card transactions. This will bring massive advantages to Capital One in the payment industry and a strong motivator to move its transactional volume over to the Discover network as soon as possible. However, with any conversion, typical challenges are to be expected, including reissuing physical cards, changing benefits, etc. Given the magnitude of consumers impacted by this deal, the merger will require an extensive logistical plan and a well-thought-out marketing strategy.


From our research on previous mergers, acquisitions, and card issuer transitions, we generally know what to anticipate from a marketing perspective:
– The initial merger announcements are often communicated across multiple media channels, including direct mail, email, and social media.
– Then, a steady cadence of communications will be sent to customers regarding the transition and how it will impact their accounts. Transition updates could roll out over the span of a few months or up to a year.
– Based on Capital One’s comments on the timeline and the fact that Capital One has existing network contracts with Mastercard and Visa, we expect the transitional period to be gradual and staggered by product types.

Competiscan considers the following best practices for transition updates:
– Links to a dedicated resource website
– FAQs
– A timeline of transition-related events
– An increase in overall retention-related communications for a sustained period.

These efforts often include promotional events or bonuses to keep customer satisfaction high and engagement positive.

Notable Example: When Ollo’s card program was acquired by Ally Bank in 2023, Ally used a self-mailer to welcome Ollo customers. The messaging emphasized that the two institutions shared similar values and that great new benefits would come due to the conversion. Ally used a QR code to quickly link customers to the FAQs page online.

Notable Example: When BMO Harris Bank notified Bank of the West customers that the conversion was finalized in September 2023, the email included an “Important” alert. BMO encouraged customers to be on the lookout for fraud attempts since cybercriminals look to prey on large events like conversions to target organizations and their customers.

Combined Synergies for Products/Services
Many questions remain as to what will become of the products and services currently offered by both institutions. It’s standard that the acquired entity gets re-branded, but it sounds likely that the Discover brand could live on. The Discover it Card has established itself as a top cash-back product and has successfully marketed its “Unlimited Cashback Match” feature for new cardholders. Discover also provides cardholder perks, like Social Security Alerts and Online Privacy Protection, which could boost the account security benefits available to Capital One’s existing account holders.

Conversely, Discover customers could benefit from the investments Capital One has made with its supplemental programs, Capital One Dining, Capital One Entertainment, and Capital One Travel. Capital One has also established a robust merchant discount program and offers the Capital One Shopping browser extension to help customers save while shopping online. Merchant deals have become increasingly common among top issuers. However, Discover currently does not offer this service to its cardholders.

What about the deposit side of their business? Both brands have invested heavily in marketing deposit products in the past year, notably Discover’s Cashback Debit product. This product is consistently ranked as one of the top debit card options for cashback.

Industry experts have been quick to point out Discover’s limitation in international acceptance and how that might impact Capital One account holders if they are moved off the Visa or Mastercard network. We’d expect Capital One to be conscious of this gap and will likely delay its transitioning of the travel-focused portfolios until they are confident that the coverage has improved.

Capital One has dedicated itself in recent years to becoming a bigger player in the premium travel space (i.e. enhancing its travel portal experience and launching the premium travel card Venture X for consumers and small businesses). This deal is a pivotal piece to bring to fruition its desire to have a global presence and enhanced product offerings in an increasingly competitive payments space.

Competiscan will continue to monitor how this deal is communicated to customers, and just as importantly how other institutions react.

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