Are Stablecoins a Threat to Visa and Mastercard Fees?

Label June 18, 2025, as a turning point for Visa (V) and Mastercard (MA). The U.S. Senate passed its stablecoin legislation. This could lead to a stablecoin-based system for merchants. It would increase competition for credit card payment firms.

A competing platform for Visa and Mastercard would benefit merchants, cutting costs. They are already absorbing at least some of the tariff-related costs. Any of the costs it cannot incur will need to be passed to consumers. So, reducing transaction costs would give merchants more flexibility.

This is unfortunate for Visa and Mastercard investors. Shares fell by 4.88% and 5.39%, respectively, on Wednesday. They trade at a premium, pricing in the moat in the credit card platform. Moreover, the credit card backend system is highly secure. It protects its customers from cybersecurity threats.

Merchants eager to cut costs will need to weigh in on the risk of insecure tokens against an established credit card platform. They are more likely to continue using the more expensive option. A cybersecurity breach or a broken down stablecoin platform that disappears is too expensive a risk.

For now, credit card customers may watch the stablecoins alternative develop. Savvy clients may let others test the stablecoins option first. If it succeeds, Visa could develop a Visa coin low-cost per transaction alternative. That would remove the existential threat currently posed.