Visa, Mastercard race to capture $253 bn crypto threat

A turf war is breaking out in the vast world of digital payments — and the incumbents are suddenly on defense.

- BLOOMBERG

Tech firms and crypto start-ups are moving in on territory long dominated by Visa and Mastercard, powered by a new type of currency — the stablecoin — and a pitch merchants can't ignore: lower fees, faster settlement and a way to bypass the big two altogether.

It's a tech threat and a financial threat. Digital tokens, which are typically pegged to the dollar, allow consumers to pay merchants directly from their crypto wallets — without routing payments through a bank or card network. Last year alone, US businesses paid an estimated $187 billion in swipe fees, most of it via Visa and Mastercard's systems.

Stablecoins promise to make that toll much lower, or even obsolete.