Feb 20 Reuters Discover Financial shares rose 13 before the bell on Tuesday after U.S. lender Capital One39;s 35.3 billion deal for the credit card issuer, while top payment processors fell on bets of a shakeup in a sector where they hold big market share.

The allstock deal would give Capital One access to Discover39;s network of payments processing and settlement services, potentially allowing it to cut its reliance on Visa and Mastercard.

The pair have come under fire in recent years for the fees that they charge for processing payments, with some lawmakers accusing them of a duopoly. Both have denied the allegations.

Capital One said a shift from the big two global payment processors to Discover39;s network would help the lender generate 1.2 billion in 2027.

The acquisition is a negative headline for Mastercard and Visa, in our view, said J.P. Morgan analyst Tientsin Huang. Visa shares fell 1.8, while Mastercard dropped more than 2.

Any transition, however, would likely be slow since both Visa and Mastercard renewed their partnerships with Capital One recently, Huang said.

The Capital OneDiscover deal is the biggest ever in the global credit card industry, narrowly coming ahead of Bank of America39;s 35.19 billion purchase of MBNA Corp in 2005, according to data from Dealogic.

ANTITRUST CONCERNS

The deal is likely to draw antitrust scrutiny, analysts cautioned.

The combined company will create the number 1 player in the credit card lending industry where the…