Visa and Mastercard executives spoke on their quarterly earnings calls and downplayed the threat posed by dollar-pegged stablecoins. They made their comments after Congress passed new rules that could speed up stablecoin use.
The talks took place as Circle Internet Group’s stock soared past $40 billion in market value raising questions about the future of the card giants’ 70% share of U.S. payment volume.
Circles has minted 64 billion of USDC tokens, far less than the volume Visa and Mastercard processes.
The NASDAQ-listed company saw its prices slide by 8.40% and at press time is trading at $168.10.
However, the shares have jumped by 540% from their IPO price of $31 a share, indicating that stablecoins are here to stay and challenge payment processors like Visa and Mastercard
Solid Earnings Despite Concerns
Visa reported net income of $5.3 billion, up 8% from last year. Mastercard posted $3.7 billion in profit, a 14% rise. Both numbers beat LSEG analyst views.
Their wide networks and reliable systems have sheltered them from past upsets, like peer-to-peer payment apps.
Fee Pressure on the Rise
The firms still collect hefty swipe fees. Together, they took in nearly $95 billion from merchants in their last fiscal year. Yet their per-transaction take is slipping; Visa’s average fee fell to 6.6 cents last quarter from almost 9 cents a decade ago.
Mastercard’s per-transaction fee dipped to 7.3 cents over the past year, down from 8 cents the year before. Shrinking margins show that big merchants and regulators are pushing back on fees.
Stablecoin Surge
Circle’s share price jumped after its June market debut. Its valuation now tops $40 billion; however, at its peak, the stablecoin issuer was valued at over $60 billion.
Over 64 billion USDC tokens are in circulation, and the rise reflects high hopes for stablecoins in mainstream trade.These digital dollars could let stores and banks swap tokens without routing through traditional networks.
If stablecoin use grows, Visa and Mastercard could lose a slice of their volume.
Also Read: Payment Processing Giants Like Visa And Mastercard Compete To Win $253B Crypto Market
Usage Still Small
For now, stablecoins make up a tiny fraction of the $15 trillion processed on Visa’s network each year. Executives say digital coins work best in countries with shaky local money.
In the U.S., stablecoin volume has hardly moved the needle. But they admit usage could climb if more retailers and banks adopt tokens.
Merchant Interest Grows
Some major chains, like Walmart, have already shown interest in token payments. They see a chance to cut costs.
If enough big players join, stablecoins could gain critical mass. That shift could force Visa and Mastercard to tweak their models or lose business.
Offsetting Lost Revenue
So far, both card firms have made up for any fee loss with new services. They now offer consulting, data tools, and fraud prevention. Those add-on revenues have helped keep growth steady. But they may not plug every gap if stablecoin use jumps.
U.S. regulators are racing to set stablecoin rules. The new law aims to protect customers and boost adoption. Visa and Mastercard are watching closely.
They want clear standards so they can plan their next moves. Both groups remain in talks with banks, fintech firms, and policymakers.
Investors have sent Visa shares up 31% in the last year and Mastercard up 24%. Both trade at rich multiples. Visa sits at 28 times expected earnings, and Mastercard at 32 times.
Those high valuations leave less room for error. If stablecoin adoption accelerates faster than expected, the card giants’ growth stories could stumble.