Capital One announced it’s acquiring Discover Financial Services for $35.3 billion in an all-stock deal, giving the bank a leg up in the competitive credit card market.

If the deal is finalized, current Capital One shareholders will own a 60% stake in the combined company, while Discover shareholders will own the remaining 40%.

With a market valuation of almost $28 billion, Discover is considerably smaller than the other three major credit card networks in the US — Visa (V), Mastercard (MA) and American Express (AXP). Credit card networks are the liaison between card issuers and merchants, for whom they set fees.

Getting Discover, which also issues its own credit cards, under the same roof as Capital One would give the bank a major leg up against competing credit card-issuing banks such as JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup ©, which don’t process transactions themselves.

A marriage between Capital One and Discover, if approved by regulators, would also give Capital One a new source of revenue from the merchant fees it collects.

Currently, Capital One issues credit cards with Mastercard, Visa and Discover. The deal would likely result in more of its cards getting switched to the Discover network, the Wall Street Journal reported earlier on Monday before the deal was officially announced.