Payments party: Will Visa and Mastercard be absent?

Article author:Prathik DesaiArticle compilation：Block unicorn

It took nearly a thousand years from the first paper money in ancient China's Tang Dynasty to a functional check system. Then came wire transfers, which accelerated cross-border trade in the 19th century. But it was a forgotten wallet that really changed the way payments were made.

In 1949, Frank McNamara forgot to bring his wallet while having dinner with clients at Major『s Cabin Grill in Manhattan, New York. The incident embarrassed him, but it also led to a pioneering effort to ensure that similar incidents would never happen again. A year later, he returned with the world’s first credit card, the Diners Club Card, which eventually evolved from a cardboard card into a credit card network that processes billions of transactions every day.

Soon after, Mastercard and Visa emerged from the chaos of bank alliances and rebranding, largely out of necessity.

As Bank of America’s BankAmericard (later renamed Visa) took over the market in the 1960s, other regional banks worried about missing out on the credit card business. To meet the challenge, a group of banks formed Interbank in 1966, later renamed Master Charge and eventually Mastercard, which allowed them to pool resources, share infrastructure, and build a scalable competitive network.

The race to stay competitive turned into one of the most successful collaborations in banking history. Payment became simpler, but more importantly, it became invisible. The swipe or tap of a card was more than just a convenience; it laid the foundation for modern commerce.

People can now carry purchasing power with them. Merchants get faster payments. Banks gain new revenue streams. And the middle layer – the card networks – becomes one of the most valuable businesses in the world.

In 2024, Mastercard and Visa generate $17 billion and $16 billion in revenues, respectively, from payment services alone. Digital transaction volumes continue to grow every year.

Transaction volume grew 2.5 times from 645 billion in 2018 to 1.65 trillion in 2024. By 2028, transaction volume is expected to grow 70% from 2024 levels to 2.84 trillion, according to Capgemini’s World Payments Report 2025.

In 2023, about 57% of non-cash transactions worldwide were completed with debit or credit cards, and these transactions usually took 1 to 3 days to settle. Each transaction often needs to pass through multiple institutions before the merchant finally receives the money. Despite this, the system still works well. You can use the same card to pay in Tokyo, Toronto or Thiruvananthapuram. Payments have become invisible.

Visa and Mastercard never actually issue cards or hold your funds. What they have is a channel built on trust between financial institutions that don’t know each other. When you swipe a card to pay, their network decides whether to allow the transaction, matches the correct account, clears the bill, and ensures that the funds are ultimately transferred.

For this, merchants pay about 2-3% of the transaction value, a fee that is split between the issuing bank, the receiving bank, the processor, and the card network. In return, everyone gets a largely reliable system. You don't need to know who settled the payment, just that it got done.

As a user, you probably have no qualms about this process. When was the last time you asked your favorite coffee shop how they got the funds after you swiped your card? You paid, they smiled back, and life went on. But for merchants, those few percentage points can add up, especially for small businesses operating on slim margins.

Have you ever been frustrated by being charged a few dollars more for paying with a card than with cash or other digital payment methods? Now you know why.

Imagine if they could get paid instantly, without the delay, and with minimal fees. That’s the promise of blockchain. Visa and Mastercard are trying to emulate this model, or be surpassed by it.

Add stablecoins to the mix, and the dynamics of payment settlement change further. In the past 12 months, stablecoins have surpassed Visa in monthly transaction volume.

With stablecoins, transactions can be settled directly from one wallet to another in seconds. No banks, no processors, no delays, just code. On networks like Solana or Base, fees are just a few cents and transactions are nearly instant.

This isn’t just theoretical. Freelancers in Argentina are already accepting USDC. Remittance platforms are integrating stablecoins to bypass the traditional banking system. Crypto-native wallets let users pay merchants directly without a card.

The threat facing Visa and Mastercard is existential. If the world starts transacting on-chain, their roles could disappear. So, they’re adapting.

Mastercard’s moves over the past year can’t be ignored.

Its recent partnership with Chainlink aims to connect more than 3.5 billion cardholders directly to on-chain assets, representing more than 40% of the world’s population. The system leverages Chainlink’s secure interoperable infrastructure, combined with the power of payment processors like Uniswap and Shift4, to create a fiat-to-crypto conversion bridge.

In addition, it has partnered with Fiserv and launched a stablecoin called FIUSD, which Mastercard plans to integrate into more than 150 million merchant touchpoints. Their goal? To enable merchants to convert between stablecoins and fiat as seamlessly as email, anytime, anywhere.

Through its Multi-Token Network (MTN), Mastercard has also laid the foundation for stablecoin-linked cards, digital asset merchant settlements, and tokenized loyalty programs. Why give up the loyalty rewards associated with your card just because you choose an on-chain payment option?

What are the benefits to Mastercard? Actually, a lot. Enabling on-chain settlement can reduce internal processing costs by cutting out middlemen.

Mastercard’s $300 million investment in Corpay’s cross-border payments unit in April 2025 shows that they are betting on high-volume, low-margin businesses where cost-efficiency is crucial. Think of cross-border payments, one of the key differentiators between Mastercard and rival Visa. In 2024, Mastercard’s cross-border transaction volume grew 18% year-on-year. They are also creating new fee structures: while traditional per-transaction fees may taper off, now they can charge for API access, compliance modules, or integration with MTN. Meanwhile, Visa is working with Yellow Card in Africa to experiment with cross-border stablecoin payments — something Africa desperately needs. It’s partnered with Ledger to launch cards that allow users to spend with cryptocurrencies and get cashback in USDC or BTC. In addition, Visa continues to develop its Visa Tokenized Assets Platform, which aims to enable banks to issue digital fiat instruments on-chain. With stablecoin settlement, Visa doesn’t have to go through multiple banks and doesn’t have to take on as much FX slippage. The motivation is to reduce costs and increase margins. The philosophy of both companies is shifting. They are programming themselves as the infrastructure layer for programmable money. They realize that the future may not be dominated by card swipes, but by smart contract calls.

There are also some deeply personal reasons behind all this.

I have waited three days for a refund for a canceled reservation. I have watched international freelancers struggle with wire transfer delays and costs. I have wondered why my cashback took weeks after the transaction. For users like us, these inefficiencies, while inconvenient, have quietly become the norm. Web3 now offers an alternative.

For payments giants, the biggest hurdle will be cost. For merchants, traditional bank card transactions can cost 2% or more. With on-chain stablecoins, fees can be reduced to less than 0.1%. For users, this means faster cashback, real-time settlement, and lower prices. For developers and fintech companies, it means the ability to build applications that can directly access global payment networks without traditional banking procedures.

Web3 will still have its own trade-offs. Credit card networks offer fraud protection, chargebacks, and dispute resolution services. Stablecoins don’t. If you send funds to the wrong wallet, they’re likely gone forever. While on-chain money flows are efficient, it still lacks the consumer safeguards we value. The GENIUS Act, recently passed by the Senate, may well have addressed some of those consumer protection concerns.

Visa and Mastercard aren’t waiting. Instead, they see this gap as an opportunity. By overlaying traditional compliance, risk scoring, and security features on stablecoin transactions, they aim to make Web3 safe for regular users. The strategy is to let others build protocols and then sell them the hardware that makes them usable at scale.

They’re also betting on volume. Not speculative trading, but real-world uses: remittances, payroll, e-commerce. If these flows move on-chain, the companies that help manage them will benefit, even if they are no longer the fee-collectors they once were.

Visa and Mastercard want to be the enablers of building such ecosystems from the ground up. So when your crypto wallet of choice needs a trusted KYC layer, or your bank needs cross-border compliance, there will be a branded API ready to go.

What does this mean for users? Perhaps a future where your wallet works like a bank. You receive money in stablecoins, spend it through a Visa or Mastercard interface, earn tokenized points rewards, and it’s all settled instantly. You may not even notice which chain it went through.

For someone like me, who has gone from bank apps to UPI to paying for coffee with crypto, the appeal is clear: I want payments that are simple and efficient. I don’t care if it’s in tokens or rupees. I care that it’s fast, cheap, and that no mistakes are made in the transaction. If these old giants can guarantee that, perhaps they deserve to continue to exist.

Ultimately, it’s a race to remain indispensable. If Web3 wallets become the new payments norm, the beneficiaries may also be those who build the rails at the bottom. The card giants are betting that even if the currency, the infrastructure may still belong to them.

They want to be invisible behind the scenes again. Only this time, the plumbing will be made of code.