The all-stock deal, first announced over a year ago, would give Capital One a major leg up against competing credit card-issuing banks such as JPMorgan Chase ( JPM ), Bank of America ( BAC) and Citigroup ( C ), which don’t process transactions themselves.

Capital One's acquistion of Discover will combine two of the industry's best-known names, making it the biggest credit card company when customers’ outstanding balances are combined.

U.S. banking regulators said on Friday they approved Capital One's $35.3 billion purchase of Discover Financial Services , paving the way for the combined firms to become the nation's eighth-largest bank.