The global payments landscape is witnessing a seismic shift as industry titans Visa and Mastercard aggressively integrate stablecoins and blockchain technology into their core operations. This move is not merely an experiment but a strategic bid to shape the future of money movement in an increasingly digital world. The potential reward? A significant stake in the multi-trillion-dollar Web3 payments market.
The Current Payments Landscape: A Duopoly with Legacy Systems
Visa and Mastercard are the undisputed leaders in global payment networks. As of 2024, Visa commands approximately 39% of the global market share, with Mastercard holding 24%. Given that China's UnionPay primarily services its domestic market, these two giants effectively dominate international card payments.
Their business model, the four-party system, involves card issuers, acquirers, merchants, and cardholders. They profit by facilitating transactions between these parties, charging small network fees. This has proven immensely profitable, with both companies boasting impressive operating margins—67% for Visa and 57% for Mastercard in 2023—thanks to their vast, scaled networks with low marginal costs.
Globally, card network transaction volume is projected to reach a staggering $20 trillion in 2024. The prospect of processing even a fraction of this volume on blockchain networks represents a monumental opportunity for the stablecoin and crypto industry.
The Hidden Inefficiencies of Modern Payments
While fintech innovations from companies like PayPal, Stripe, and Apple Pay have streamlined the front-end user experience, the backend settlement infrastructure remains largely unchanged and riddled with inefficiencies.
- Slow Settlement Times: Merchant settlement is typically batched and processed only once per business day. Weekends and holidays can further delay the process, meaning it often takes several days for funds to finally reach a merchant's account.
- High Cost of Cross-Border Transactions: International payments incur additional fees, including roughly 1% for cross-border processing and another 1% for foreign exchange (FX) conversion. These costs add up for both businesses and consumers.
Blockchain technology presents a compelling solution to these pain points. Its decentralized nature allows for 24/7 operation, borderless transactions, faster settlement, and potentially lower fees. Recognizing this, Visa and Mastercard are now racing to harness its power.
Visa's Four-Pronged Stablecoin Strategy
Visa operates VisaNet, one of the world's largest payment networks, capable of handling 65,000 transactions per second. Its strategy focuses on deeply integrating stablecoins into this existing infrastructure.
1. Modernizing Settlement Infrastructure
Since 2021, Visa has been piloting the use of the USDC stablecoin for settlement between partners on its network. To date, it has facilitated over $225 million in USDC settlements.
How it works: Traditionally, an issuer like Crypto.com would need to convert crypto to fiat currency and perform a cross-border wire transfer to Visa for settlement. Now, they can send USDC directly to a designated custodial account (e.g., via Anchorage Digital) over the Ethereum blockchain. This eliminates the need for costly FX conversions and slow wire transfers.
The result: Partners have reported reducing their advance funding time from an average of 8 days down to just 4 days and slashing FX fees to 20-30 basis points. Visa has expanded this program to allow acquirers like Worldpay and Nuvei to receive settlements in USDC from issuers.
2. Enhancing Global Money Movement
Visa Direct is the company's solution for peer-to-peer (P2P) transfers across borders. The next step is integrating stablecoins into this network to make cross-border remittance faster and cheaper. Visa's recent investment in BVNK, a startup building stablecoin infrastructure for businesses, signals its intent to expand these capabilities beyond retail into the B2B ecosystem.
3. Programmable Digital Currency with VTAP
A key advantage of stablecoins is their programmability via smart contracts. Visa's response is the Visa Tokenized Asset Platform (VTAP).
VTAP is a blockchain-based infrastructure that allows banks and financial institutions to issue and manage their own regulated digital tokens, such as stablecoins or tokenized deposits. These tokens can be integrated with smart contracts to automate complex financial processes like conditional payments or instant loan disbursements.
Currently in a sandbox environment with Spanish bank BBVA, VTAP is slated for its first live pilot on a public Ethereum blockchain in 2025.
4. Stablecoin On-Ramp and Off-Ramp Cards
Visa has already processed over $100 billion in crypto purchases and $25 billion in crypto spending via cards. To grow this ecosystem, it is partnering with infrastructure providers to make it easier to spend stablecoins directly.
- Bridge (acquired by Stripe) offers an API that lets fintechs issue cards linked to users' stablecoin balances. The stablecoins are instantly converted to fiat at the point of sale. This service is live in several Latin American countries.
- Baanx allows users to pay directly from the USDC in their self-custodied crypto wallets via a Visa card. A smart contract facilitates the instant transfer to Baanx for conversion and merchant settlement.
- Rain provides a global card issuance platform with APIs for businesses, offering features like 24/7 real-time settlement and tokenization of receivables.
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Mastercard's End-to-End Stablecoin Ecosystem
While Visa leverages its centralized VisaNet, Mastercard relies on Banknet, a robust distributed network supported by over 1,000 data centers. In April 2025, Mastercard announced it had built an end-to-end infrastructure covering the entire stablecoin payment flow.
1. Card Issuance and Payment Support
Mastercard has forged partnerships with key players across the crypto space:
- Wallets: Partnered with MetaMask to launch the MetaMask Card, allowing users to spend crypto assets directly from their wallet.
- Exchanges: Collaborates with Kraken, Gemini, Bybit, and others to enable stablecoin payments from user exchange accounts.
- Infrastructure: Works with fintechs like Monavate and Bleap to provide the backend solutions that connect blockchain networks to Banknet.
2. Merchant Settlement in USDC
While most merchants prefer fiat settlement, Mastercard, through partners like Nuvei and Circle, offers the option to receive settlements in USDC. It also supports settlement in Paxos-issued stablecoins.
3. Simplifying On-Chain Transfers: Crypto Credential
Sending stablecoin on-chain can be daunting for beginners. Mastercard's Crypto Credential service tackles this by allowing users at supported exchanges (e.g., Bit2Me, Mercado Bitcoin) to create an alias.
Users can send funds to a simple alias instead of a long wallet address. The system also performs vital checks, blocking transactions if the recipient's wallet doesn't support the asset or blockchain, preventing loss. It automatically handles Travel Rule compliance for international transfers. The service is live in several Latin American and European countries.
4. Enterprise Tokenization with Multi-Token Network (MTN)
Mastercard's MTN is a private blockchain service designed for institutions. It helps them issue, manage, and burn tokens and facilitate instant cross-border transactions.
Use Cases:
- Ondo Finance tokenized its short-term U.S. treasury bond fund (OUSG) on MTN, enabling 24/7 instant trading.
- JPMorgan Chase integrated its blockchain payment system, JPM Coin, with MTN.
- Standard Chartered successfully tokenized and traded carbon credits on MTN as a proof-of-concept.
The Battle for Web3 Payments Supremacy
The convergence of clearer U.S. regulatory support for crypto and growing institutional interest has created a perfect storm. Visa and Mastercard's simultaneous announcements in April 2025—outlining nearly identical strategies in card services, tokenization platforms, settlement, and P2P transfers—signal the start of a direct competition for dominance in Web3 payments.
However, this technological shift may not immediately颠覆 the existing market share duopoly. While blockchain will drastically improve the efficiency of the underlying payment infrastructure—making transactions faster, cheaper, and more programmable—the competitive landscape is still shaped by decades-deep relationships with merchants, acquirers, and issuers. The winners will be those who best leverage new technology to strengthen those existing partnerships and deliver unparalleled value.
Frequently Asked Questions (FAQ)
Q: What is a stablecoin?
A: A stablecoin is a type of digital cryptocurrency designed to maintain a stable value by being pegged to a reserve asset, most commonly the U.S. dollar. This makes them suitable for everyday payments and transfers, unlike more volatile cryptocurrencies like Bitcoin.
Q: How do Visa and Mastercard make money from stablecoins?
A: They continue to earn network fees for facilitating transactions. The fundamental business model remains the same; they are simply upgrading the settlement layer from traditional banking rails to more efficient blockchain networks, which can make their services more attractive to partners.
Q: Will using a stablecoin card be more expensive for me?
A: Potentially less expensive, especially for cross-border transactions. By reducing FX fees and settlement costs for the card issuers, these savings could be passed on to consumers in the form of lower transaction fees or better exchange rates.
Q: Are stablecoin payments secure?
A: Payments processed through Visa and Mastercard networks inherit their robust fraud protection systems. Furthermore, the underlying blockchain technology offers transparency and immutability. Services like Mastercard Crypto Credential add an extra layer of security by verifying participants and preventing misdirected payments.
Q: When will these services be widely available?
A: Many pilot programs and partnerships are already live in select regions, particularly Latin America and Europe. Broader rollout, especially in markets like the U.S., is expected to accelerate through 2025 and beyond as regulatory frameworks solidify.
Q: Do I need to understand blockchain to use these services?
A: Not at all. The core strategy of both Visa and Mastercard is to abstract away the technological complexity. For the end-user, spending stablecoins will feel as simple as using a regular debit or credit card, with all the blockchain operations happening seamlessly in the background.