Sporadic issues with the acceptance of debit cards that were switched to the Discover network after Capital One (COF) acquired the network has fueled concerns among customers more accustomed to the larger Visa (V) and Mastercard (MA) networks, according to a media report.
Capital One (COF) is moving its debit cards to the Discover network after the acquisition closed in May of this year. Since then, complaints have cropped up on social media, the Wall Street Journal reported.
In the U.S., more than 99% of merchants accept Discover cards, the WSJ said. The friction, though, illustrates that customers’ perception of Discover is almost as important as the actual card acceptance by merchants.
Capital One (COF) stock slipped 0.8% in Friday premarket trading.
While the network’s reach in the U.S. is close to that of its much larger rivals, the Discover network isn’t accepted for instant transfers, which are used in payment apps such as Venmo. In those cases, the company suggests linking checking accounts instead of a debit card.
Before Capital One (COF) started the network switch, it checked that the 100 merchants most used by its debit-card holders accepted Discover debit, and took steps to fill the gaps, a company spokeswoman told the WSJ. She said card activations for its new debit cards and spending are in line with its expectations, and complaints have been low.
In addition, the company is working to expand the Discover network and address concerns about acceptance when they crop up. For the time being, Capital One (COF) is only moving debit cards to Discover, but plans to transition some credit cards in the future, the WSJ said.