Monthly spending tops $759 million, yet 90% still runs on Visa: Why stablecoin cards can’t replace card networks
The latest data for July shows that monthly spending on crypto credit cards has topped $759 million, with transaction volumes reaching 9 million—almost 2.5 times the level of the same period last year. But behind this seemingly rapid growth lies a structural fact the market has overlooked: more than 90% of transaction value still flows through the Visa network. This reveals a fundamental contradiction. Although many crypto-native payment projects are trying to build disintermediated payment channels with stablecoins, claiming they can bypass the high fees charged by traditional card networks, the data shows that Visa has not been pushed to the margins. Instead, it remains an indispensable foundation of stablecoin payment infrastructure. This phenomenon—where “disruptors” depend on the very “incumbents” they aim to disrupt—forces us to reconsider the true role of stablecoins in payment systems: are they replacing Visa, or optimizing specific parts of its network?
To understand this, we need to unpack where payment fees actually go. A common misconception is that Visa or Mastercard takes most of the fees merchants pay. In reality, consider a $100 rewards credit card transaction: the merchant pays a discount rate of about 2.2%, or $2.20. That fee is distributed unevenly. The issuing bank takes about $1.75 through interchange fees, accounting for as much as 70%–80%; the acquiring institution receives $0.30–$0.70; and Visa collects just $0.13–$0.18 in assessment fees, or less than 10%. Visa’s low fees reflect the nature of its business: it does not take on credit risk, issue loans, or handle the transfer of funds. It simply operates as an information network. In 2025, Visa processed $14.2 trillion in payments and generated $40 billion in net revenue, with a net profit margin close to 50%. On average, it earned only about $0.13 per transaction. This high margin does not come from charging a large fee on each transaction, but from zero marginal costs, no credit risk, and the economies of scale generated by hundreds of billions of transactions. By contrast, most stablecoin-linked cards are debit products, with funds preloaded into USDC or USDT wallets. They have no credit cycle or interest income. Due to the restrictions on interchange fees for large banks’ debit cards under the U.S. Durbin Amendment, these programs typically work with smaller partner banks to avoid the regulations. Their average interchange fee is only about $0.62 per transaction. This means that even excluding Visa’s relatively small fees, the total revenue pool for stablecoin debit cards is far smaller than that for traditional credit cards. Once card network, processor, and bank costs, as well as fraud losses, are deducted, there is very little room to offer merchants a lower rate.
Stablecoins’ real value in the payment system is not in replacing Visa’s information-routing function, but in restructuring the clearing and settlement layer. In the traditional model, settlement between the issuing bank and the card network takes T+2, and the issuing bank bears the cost of funds tied up during that period. Stablecoins have brought a major change to this part of the process. Since 2021, Visa has supported settlement in USDC on public blockchains such as Ethereum and Solana, and the annualized settlement volume has now reached $7 billion. Mastercard, meanwhile, has expanded its stablecoin infrastructure by acquiring BVNK and supports intraday settlement in assets such as USDC and PYUSD. Moving settlement from T+2 to T+0—or even real time—frees up a substantial amount of working capital for issuing banks and reduces their funding costs. However, the benefits of this efficiency gain mainly go to card issuers and operators. The discount rate paid by merchants has not fallen, and consumers have seen no noticeable change in their payment experience. Visa has no incentive to lower its assessment fees because stablecoin settlement has not changed its cost structure; the pressure of funds tied up in settlement remains with the issuing bank. More importantly, Visa and Mastercard have not resisted stablecoins. Instead, they have proactively integrated them into their existing networks, treating them as an upgrade to the settlement layer rather than as a replacement. Every stablecoin-linked card operating on the Visa network generates transaction volume and fees for Visa. This symbiotic relationship reinforces, rather than dismantles, the existing payment landscape.
Stablecoins’ role in payments therefore needs to be reassessed realistically. In cross-border payments, stablecoins can indeed significantly reduce costs by eliminating multiple intermediary banks and foreign exchange conversion fees. This rationale is sound and has been proven in practice. But for domestic purchases, the main source of fees is the issuing bank’s interchange fee, not the card network’s assessment fee. Stablecoins cannot change this core cost structure; their advantages are limited to improving back-end settlement efficiency and fund management. If the industry applies the success of cross-border payments directly to domestic card spending, it overlooks the fundamental differences in how costs are structured. What stablecoins can ultimately replace are the clearing and settlement process and cross-border foreign exchange channels. They transform the underlying movement of funds behind a transaction, not the front-end information routing or credit intermediation functions. For merchants and consumers, stablecoins do not bring direct fee reductions; they improve the efficiency of the payment system’s underlying infrastructure. As stablecoin infrastructure matures, its value will be seen more in improving capital turnover for businesses than in revolutionizing payment costs for consumers. Visa’s position as an information network will be difficult to dislodge in the short term, while stablecoins, as efficient settlement tools, are being embedded in and strengthening the existing system. This “complementation over replacement” is the clearest picture of how crypto payments and traditional finance are converging today.
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The latest data for July shows that monthly spending on crypto credit cards has topped $759 million, with transaction volumes reaching 9 million—almost 2.5 times the level of the same period last year. But behind this seemingly rapid growth lies a structural fact the market has overlooked: more than 90% of transaction value still flows through the Visa network. This reveals a fundamental contradiction. Although many crypto-native payment projects are trying to build disintermediated payment channels with stablecoins, claiming they can bypass the high fees charged by traditional card networks, the data shows that Visa has not been pushed to the margins. Instead, it remains an indispensable foundation of stablecoin payment infrastructure. This phenomenon—where “disruptors” depend on the very “incumbents” they aim to disrupt—forces us to reconsider the true role of stablecoins in payment systems: are they replacing Visa, or optimizing specific parts of its network?
To understand this, we need to unpack where payment fees actually go. A common misconception is that Visa or Mastercard takes most of the fees merchants pay. In reality, consider a $100 rewards credit card transaction: the merchant pays a discount rate of about 2.2%, or $2.20. That fee is distributed unevenly. The issuing bank takes about $1.75 through interchange fees, accounting for as much as 70%–80%; the acquiring institution receives $0.30–$0.70; and Visa collects just $0.13–$0.18 in assessment fees, or less than 10%. Visa’s low fees reflect the nature of its business: it does not take on credit risk, issue loans, or handle the transfer of funds. It simply operates as an information network. In 2025, Visa processed $14.2 trillion in payments and generated $40 billion in net revenue, with a net profit margin close to 50%. On average, it earned only about $0.13 per transaction. This high margin does not come from charging a large fee on each transaction, but from zero marginal costs, no credit risk, and the economies of scale generated by hundreds of billions of transactions. By contrast, most stablecoin-linked cards are debit products, with funds preloaded into USDC or USDT wallets. They have no credit cycle or interest income. Due to the restrictions on interchange fees for large banks’ debit cards under the U.S. Durbin Amendment, these programs typically work with smaller partner banks to avoid the regulations. Their average interchange fee is only about $0.62 per transaction. This means that even excluding Visa’s relatively small fees, the total revenue pool for stablecoin debit cards is far smaller than that for traditional credit cards. Once card network, processor, and bank costs, as well as fraud losses, are deducted, there is very little room to offer merchants a lower rate.
Stablecoins’ real value in the payment system is not in replacing Visa’s information-routing function, but in restructuring the clearing and settlement layer. In the traditional model, settlement between the issuing bank and the card network takes T+2, and the issuing bank bears the cost of funds tied up during that period. Stablecoins have brought a major change to this part of the process. Since 2021, Visa has supported settlement in USDC on public blockchains such as Ethereum and Solana, and the annualized settlement volume has now reached $7 billion. Mastercard, meanwhile, has expanded its stablecoin infrastructure by acquiring BVNK and supports intraday settlement in assets such as USDC and PYUSD. Moving settlement from T+2 to T+0—or even real time—frees up a substantial amount of working capital for issuing banks and reduces their funding costs. However, the benefits of this efficiency gain mainly go to card issuers and operators. The discount rate paid by merchants has not fallen, and consumers have seen no noticeable change in their payment experience. Visa has no incentive to lower its assessment fees because stablecoin settlement has not changed its cost structure; the pressure of funds tied up in settlement remains with the issuing bank. More importantly, Visa and Mastercard have not resisted stablecoins. Instead, they have proactively integrated them into their existing networks, treating them as an upgrade to the settlement layer rather than as a replacement. Every stablecoin-linked card operating on the Visa network generates transaction volume and fees for Visa. This symbiotic relationship reinforces, rather than dismantles, the existing payment landscape.
Stablecoins’ role in payments therefore needs to be reassessed realistically. In cross-border payments, stablecoins can indeed significantly reduce costs by eliminating multiple intermediary banks and foreign exchange conversion fees. This rationale is sound and has been proven in practice. But for domestic purchases, the main source of fees is the issuing bank’s interchange fee, not the card network’s assessment fee. Stablecoins cannot change this core cost structure; their advantages are limited to improving back-end settlement efficiency and fund management. If the industry applies the success of cross-border payments directly to domestic card spending, it overlooks the fundamental differences in how costs are structured. What stablecoins can ultimately replace are the clearing and settlement process and cross-border foreign exchange channels. They transform the underlying movement of funds behind a transaction, not the front-end information routing or credit intermediation functions. For merchants and consumers, stablecoins do not bring direct fee reductions; they improve the efficiency of the payment system’s underlying infrastructure. As stablecoin infrastructure matures, its value will be seen more in improving capital turnover for businesses than in revolutionizing payment costs for consumers. Visa’s position as an information network will be difficult to dislodge in the short term, while stablecoins, as efficient settlement tools, are being embedded in and strengthening the existing system. This “complementation over replacement” is the clearest picture of how crypto payments and traditional finance are converging today.
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