Visa and Mastercard are on the brink of significant changes, venturing into the world of blockchain and stablecoins. This news outlines the threats these companies face and their strategy to adapt to new financial conditions.
How Traditional Payment Giants Earn
Visa and Mastercard profit by serving as intermediaries in the payment system. They earn fees from each transaction, largely unnoticed by payers. Despite their significant earnings, this outdated model is slow and costly.
The Threat of Stablecoins
Stablecoins are gaining popularity: their transaction volume has already surpassed that of Visa. For users, stablecoins offer instant transactions and low fees. If this trend continues, Visa and Mastercard might become irrelevant.
Visa and Mastercard's Actions in the Web3 World
Visa and Mastercard are taking steps to integrate with blockchain. Mastercard has partnered with Chainlink and launched its stablecoin FIUSD, while Visa works on enhancing its services to support cryptocurrencies. Their goal is to avoid falling behind in the Web3 landscape.
Visa and Mastercard recognize that their main competitor in the future is not each other but new technologies such as crypto wallets and blockchain. To keep up, they need to adapt to the changing financial world.
