How can CapitalOne on iOS read my credit card?
The Capital One credit card has NFC capability, and similarly modern iPhones have NFC capabilities. This is how the phone and card communicates with eachother.

App developers can use NFC through Apple's "Core NFC" framework, which has been available for developers since iOS 11. So that's not really "new".

iPhone 6 and newer have NFC chips, but you'll need an iPhone 7 or newer for apps to be able to use NFC through the Core NFC framework.