Capital One is the trailblazer that larger banks like BofA, Chase, and Wells Fargo should follow to move their debit businesses to a freer market enabling enormous value creation for their customers and shareholders. With Capital One’s $35 billion all-stock acquisition of Discover, it will own two national debit networks and thereby free itself from value-stifling debit-interchange price controls.
Interchange fees are the principal revenue source for debit cards and DDAs. They fund fee-free accounts, a range of benefits and rewards, and issuer and fintech innovation. They’re neobanks’ lifeblood.
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