Why Are Stablecoin Credit Cards So Hard to Replace Visa?
Let’s look at a $100 credit card purchase.
The merchant pays about $2.20 in fees, of which roughly $1.75 goes to the issuing bank—70%–80% of the total fee.
Visa’s assessment fee is about $0.13–$0.18, only 7%–9% of the total.
If you’re hoping to slash costs by bypassing Visa, you may be targeting the wrong thing from the start.
Why does the largest share of credit card fees go to the issuing bank?
Because the issuing bank bears the costs of lending, bad debt, and tying up capital.
Visa and Mastercard mainly provide payment networks and transmit information; they don’t bear the same credit risk.
That means card network fees are only one part of the entire payment chain.
Cutting network fees doesn’t mean cutting most of the costs.
Crypto cards often tell a story:
Bypass traditional card networks and return the fees saved to merchants.
But if transactions still rely on the Visa network for acceptance, risk management, or dispute resolution, those costs can’t simply disappear.
Using stablecoins for settlement doesn’t mean that issuing cards, providing credit, and merchant acceptance can all be disintermediated at the same time.
The settlement method may change, but the entire payment chain may not.
The market data is also interesting.
According to relevant statistics, crypto credit card spending exceeded $759 million in July, with around 9 million transactions. More than 90% of them were still processed through the Visa network.
This shows that crypto cards can grow, but growth doesn’t automatically mean traditional payment networks are being replaced.
What really matters is whether the underlying payment structure changes as transaction volumes rise.
The next time you see a project claim that “stablecoins can dramatically reduce payment costs,” ask three questions first:
First, exactly which fee is being eliminated?
Second, who bears the costs of card issuance, lending, bad debt, and dispute resolution?
Third, do transactions still rely on traditional card networks?
If all that’s reduced is the assessment fee—which makes up 7%–9% of the total—while the largest cost, the issuing bank’s interchange fee, remains unchanged, the potential cost savings may be far smaller than advertised.
Payment innovation isn’t just about which currency is used for settlement; it’s also about how much of the entire fee chain has changed.
Let’s look at a $100 credit card purchase.
The merchant pays about $2.20 in fees, of which roughly $1.75 goes to the issuing bank—70%–80% of the total fee.
Visa’s assessment fee is about $0.13–$0.18, only 7%–9% of the total.
If you’re hoping to slash costs by bypassing Visa, you may be targeting the wrong thing from the start.
Why does the largest share of credit card fees go to the issuing bank?
Because the issuing bank bears the costs of lending, bad debt, and tying up capital.
Visa and Mastercard mainly provide payment networks and transmit information; they don’t bear the same credit risk.
That means card network fees are only one part of the entire payment chain.
Cutting network fees doesn’t mean cutting most of the costs.
Crypto cards often tell a story:
Bypass traditional card networks and return the fees saved to merchants.
But if transactions still rely on the Visa network for acceptance, risk management, or dispute resolution, those costs can’t simply disappear.
Using stablecoins for settlement doesn’t mean that issuing cards, providing credit, and merchant acceptance can all be disintermediated at the same time.
The settlement method may change, but the entire payment chain may not.
The market data is also interesting.
According to relevant statistics, crypto credit card spending exceeded $759 million in July, with around 9 million transactions. More than 90% of them were still processed through the Visa network.
This shows that crypto cards can grow, but growth doesn’t automatically mean traditional payment networks are being replaced.
What really matters is whether the underlying payment structure changes as transaction volumes rise.
The next time you see a project claim that “stablecoins can dramatically reduce payment costs,” ask three questions first:
First, exactly which fee is being eliminated?
Second, who bears the costs of card issuance, lending, bad debt, and dispute resolution?
Third, do transactions still rely on traditional card networks?
If all that’s reduced is the assessment fee—which makes up 7%–9% of the total—while the largest cost, the issuing bank’s interchange fee, remains unchanged, the potential cost savings may be far smaller than advertised.
Payment innovation isn’t just about which currency is used for settlement; it’s also about how much of the entire fee chain has changed.