©Reuters. The Capital One logo and ticker are displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 21, 2018. REUTERS/Brendan McDermid/File Photo
(Reuters) -Discover financial services or Capital One Financial (NYSE:) will pay a termination fee of $1.38 billion if the companies’ merger fails under any circumstances, a regulatory filing showed Thursday.
The all-stock deal announced Monday would create the largest credit card issuer in the United States, but would also give Capital One access to Discover’s payments network, allowing it to rely less on payments giants Visa (NYSE 🙂 and Mastercard (NYSE :).
Capital One, the third largest issuer of Visa and MasterCard credit cards in the United States, said earlier in the week that moving its card portfolio from these two payments giants to Discover’s network would help it generate 1 .2 billion dollars in 2027.