A fresh battle is unfolding in digital payments as tech firms and crypto start‑ups press into territory long held by Visa Inc. and Mastercard Inc. Driving the charge are stablecoins, digital tokens pegged to the dollar, that offer merchants lower fees and instant settlement.
By letting consumers pay directly from crypto wallets, these tokens cut out banks and card networks. Last year, US businesses paid about $187 billion in swipe fees, most of it to Visa and Mastercard. Stablecoins promise to shrink that toll or even make it vanish, according to a recent report by Bloomberg.
Stablecoins Cut Out the Middleman
With stablecoins, merchants can accept payments without routing them through traditional banks or card rails. Tokens move on a blockchain, updating balances in real time.
This speed and cost advantage is hard for merchants to ignore. For consumers, it means using digital wallets to buy goods without converting assets back into dollars first.
Big Networks Strike Back
Visa and Mastercard are not sitting idle. Both giants are working to position themselves as essential infrastructure for all digital transactions, even those built around stablecoins.
President Donald Trump has signed legislation to regulate stablecoin issuers at the federal level, and card networks are rolling out new services to stay relevant. They see an opening to absorb stablecoin flows into their systems rather than cede ground to pure crypto players.
Absorption and Co‑option
Historically, Visa and Mastercard have neutralised threats by integrating them into their networks in ways that preserve their core revenue streams. Industry experts suggest that bringing stablecoins under their umbrella could be another example of this tactic.
As JPMorgan’s head of digital assets once noted, card networks have the methods and relationships to guide adoption. Their strategy may involve offering banks tokenised solutions or letting issuers settle transactions on their rails for a fee.
Industry Moves and Partnerships
Several major moves underscore this fight for dominance. Visa now lets banks issue their own fiat‑backed digital tokens and is testing stablecoin settlement on its network.
Mastercard has joined Paxos’s Global Dollar Network, enabling institutions to mint and redeem a USD‑pegged token called USDG under Mastercard’s rules.
These services aim to give clients fine‑tuned control over payment routing, blending bank accounts, credit lines, and stablecoin wallets under a single identity.
On the merchant side, Shopify Inc. teamed up with Stripe Inc. and Coinbase Global Inc. to let merchants accept USDC, Circle’s dollar‑backed token. Payments go straight from customer wallets to merchant wallets on a blockchain.
Shopify will even offer 1 % cashback in USDC to shoppers who use the token, further sweetening the deal. Coinbase is also expanding its payment platform to support stablecoin acceptance across more online stores.
Benefits and Hurdles
Stablecoins offer clear advantages in costs and speed. Yet replacing card networks in the US will not be easy. Consumers expect perks like rewards, fraud protection, and credit lines, features not yet matched by crypto wallets.
Stablecoins also lack FDIC insurance, and consumer safeguards can vary widely. Merchants must weigh the risk of new compliance and tax rules against the promise of lower fees.
A Shift in Payment Preferences
Despite hurdles, many believe change is coming. Richard Crone, CEO of Crone Consulting, argues that real momentum is building for stablecoin payments. Past innovations, from mobile wallets to buy‑now‑pay‑later, have triggered similar warnings before becoming mainstream.
Card networks themselves emphasise their tokenisation tools, which hide sensitive data and prevent fraud, as proof that they can evolve alongside new technologies.
The clash between stablecoins and established card networks captures a wider debate about the future of money. Stablecoins aim to make payments faster and cheaper. Visa and Mastercard seek to remain the backbone of global commerce by adapting their offerings.