Mastercard is likely to suffer the biggest competitive blow in the card network industry if Capital One absorbs Discover Financial Services, shifting debit and credit payment flows to its newly acquired network.
The deal is still subject to regulatory approvals and will unfold throughout the year, but the biggest U.S. card network, Visa, also is expected to be negatively impacted.
Capital One has said it will shift its current debit payment volume, all of which is carried by Mastercard, to Discover, but it has remained coy about what will happen with the credit payment flow. Only “selected credit card purchase volume” will move to Discover, according to the Feb. 19 press release announcing the transaction.
