Crypto Payment Party: Visa, Mastercard Enter Web3

Author: Prathik Desai, Source: Token Dispatch, Compiler: Shaw Golden Finance

It took nearly a thousand years from the earliest paper money in China's Tang Dynasty to the effective check system today. Later, the emergence of wire transfers accelerated the development of cross-border trade in the 19th century. However, nothing can revolutionize payment methods like a forgotten wallet.

In 1949, Frank McNamara forgot to bring his wallet when dining with customers at Major's Cabin Grill in Manhattan, New York. This incident embarrassed him, but it also prompted him to invent a new way to ensure that similar situations would not happen again. A year later, he returned with the world's first credit card, Diners Club Card. This card was originally just a piece of cardboard, but later developed into a credit card network that processes billions of transactions every day.

Soon thereafter, MasterCard and Visa emerged from a mix of bank alliances and rebranding, born largely out of necessity.

In the 1960s, as BankAmericard (later Visa) gained ground, other regional banks worried about missing out on the credit card business. To coordinate their response, several banks formed Interbank (later renamed Master Charge and eventually Mastercard) in 1966, which allowed them to pool resources, share infrastructure, and build a scalable, competitive network.

What started as a battle for relevance ended up being one of the most successful partnerships in banking history. Payments became simpler and, more importantly, invisible. The swipe or tap didn’t just bring convenience; it laid the foundation for modern commerce.

People could now put spending power in their pockets. Merchants got a faster way to get paid. Banks got a new revenue stream. And the card networks in the middle became one of the most valuable businesses in the world.

In 2024 alone, Mastercard and Visa will generate $17 billion and $16 billion in revenue respectively from payment services alone. And the volume of digital transactions is growing steadily year by year.

From 645 billion in 2018 to 1.65 trillion in 2024, the transaction volume has increased 2.5 times. According to the Capgemini Consulting Company's "2025 Global Payments Report", by 2028, the transaction volume will increase by 70% from the 2024 level to 2.84 trillion.

In 2023, about 57% of non-cash transactions worldwide will be completed through debit or credit cards, and settlement time usually takes 1 to 3 days. Each transaction usually goes through multiple institutions before it is finally paid to the merchant. Even so, this method still works. You can travel around the world and swipe the same card in Tokyo, Toronto or New York. Payments have become invisible.

Visa and Mastercard never actually issued your card or held your funds. All they have is a payment channel built on trust between financial institutions that don't know each other. When you click to pay, their network decides whether to allow the transaction, matches the correct account, clears the bill, and ensures that the funds are finally received.

For this service, merchants need to pay about 2% to 3% of the transaction amount to the relevant parties, and this fee is divided among the issuing bank, the acquiring bank, the processing organization, and the card network. In exchange, everyone gets a system that basically works. You don't need to know who settled the payment, just pay the money.

As a consumer, you may not care about this process. But for merchants, those few percentage points of fees can add up to a lot of money, especially for small businesses with razor-thin margins.

Have you ever been in a situation where a vendor or corner shop owner charges you a few bucks more when you pay with a credit card than you do with cash or another form of electronic payment? Now you know why.

Imagine if they could avoid delays, get paid instantly, and with minimal fees. That’s the promise of blockchain. And it’s the model Visa and Mastercard are trying to emulate, or they’ll be surpassed.

Add stablecoins to the mix, and the dynamics of payment settlement change even further. In the past 12 months, stablecoins have surpassed Visa in monthly transaction volume.

With stablecoins, transactions can be settled in seconds, directly from one wallet to another. No banks, no processors, no delays. Just code. On networks like Solana or Base, fees are a fraction of a cent. And finality is almost instant.

This isn’t just theoretical. Freelancers in Argentina already accept USDC. Remittance platforms are integrating stablecoins to bypass the correspondent banking system. Crypto-native wallets let users pay merchants directly without a bank card.

Visa and Mastercard face an existential threat. If the world starts transacting on blockchains, their roles could disappear. So, they’re adapting.

Mastercard’s moves over the past year have been hard to ignore.

The company recently partnered with Chainlink to connect more than 3.5 billion cardholders directly to on-chain assets, which is more than 40% of the world’s population. The system leverages Chainlink’s secure interoperability infrastructure, combined with the power of Uniswap and payment processors like Shift4, to create a fiat-to-crypto conversion bridge.

In addition, Mastercard has partnered with Fiserv and launched a stablecoin called FIUSD. Mastercard aims to integrate it into more than 150 million merchant touchpoints. Their goal? To make stablecoin to fiat conversion as common and seamless as email for their merchants.

Mastercard is also laying the foundation for stablecoin-linked cards, merchant settlement in digital assets, and tokenized loyalty programs through its Multi-Token Network (MTN). Why give up loyalty rewards tied to your card just because you choose an on-chain payment option?

What does Mastercard get out of this? A lot, actually. Enabling on-chain settlement reduces the number of intermediaries, thereby reducing internal processing costs.

Mastercard’s investment of $300 million in Corpay’s cross-border payments unit in April 2025 is a bet on the high-volume, low-margin payments business where cost-efficiency is crucial. Cross-border payments are one of the main differentiators between Mastercard and rival Visa. In 2024, Mastercard’s cross-border transaction volume grew 18% year-on-year.

They are also creating new fee structures: while traditional per-swipe fees may taper off, they can now charge for API access, compliance modules, or integration with MTN.

Meanwhile, Visa has partnered with Yellow Card in Africa to experiment with cross-border stablecoin payments, which the continent desperately needs. Visa has partnered with Ledger to launch a card that allows users to spend with cryptocurrencies and get cashback in USDC or BTC. Visa is also continuing to develop its Visa Tokenized Asset Platform, which aims to enable banks to issue digital fiat instruments on-chain.

With stablecoin settlement, Visa doesn’t have to go through multiple banks and doesn’t have to take as much FX slippage. The benefit is lower costs and higher margins.

Both companies are shifting their philosophies. They are programming themselves to become the infrastructure layer for programmable money. They realize that the future may not be dominated by card swipes, but by smart contract calls.

There’s something very personal behind all of this.

I’ve waited three days for a refund for a canceled reservation. I’ve seen international freelancers struggle with wire transfer delays and fees. I’ve wondered why my cashback took weeks to arrive. For users like us, these inefficiencies, while inconvenient, have quietly become the norm. Web3 now offers an alternative.

For the payment giants, the biggest obstacle is cost. For merchants, traditional bank card transactions can cost 2% or more in fees. With on-chain stablecoins, this fee can be reduced to less than 0.1%. For users, this means faster cash back, real-time settlement, and lower prices. For developers and fintech companies, it means the ability to build applications that directly access global payment networks without the need for review by traditional banks.

Web3 will still face many pros and cons. Credit card networks provide features such as fraud protection, chargebacks, and dispute resolution, while stablecoins do not. If you send funds to the wrong wallet, there is a high probability that these funds will never be recovered. Although on-chain funds flow efficiently, it still lacks the consumer protection measures we value. The GENIUS Act recently passed by the US Senate may have addressed some of these consumer protection concerns.

Visa and Mastercard are not sitting still. Instead, they see this gap as an opportunity. By incorporating traditional compliance, risk scoring, and security features into stablecoin transactions, they aim to make Web3 safer for ordinary users. Their strategy is to let others build protocols, then sell them the infrastructure that enables those protocols to be used at scale.

They’re betting on volume, too. Not speculative trading, but real-world applications: remittances, payroll, e-commerce. If those flows move on-chain, the companies responsible for managing them will benefit, even if they’re no longer the “toll collectors” of the past.

Visa and Mastercard are looking to be the enablers of building such ecosystems from scratch. So when your crypto wallet of choice needs a trusted KYC layer, or your bank needs cross-border compliance, there’s a branded API to use.

What does this mean for users? In the future, your wallet may work like a bank. You can pay with stablecoins, use it through a Visa or Mastercard interface, get rewarded with tokenized points, and have all payments settled instantly. You may not even know which chain it went through.

For someone like me who has used everything from banking apps to the Unified Payments Interface (UPI) to paying for coffee with crypto, the appeal is clear: I want a way to pay that actually works. I don’t care if it’s tokens or rupees. I just care that it’s fast, cheap, and doesn’t break down in the middle of a transaction. If the incumbents can guarantee that, maybe they do deserve to stay.

Ultimately, it’s a race to stay at the center. If Web3 wallets become the new payment standard, the beneficiaries are also likely to be those who build the infrastructure for them. And the credit card giants are betting that even if the currency changes, the infrastructure may still belong to them.

They want to be invisible again. Only this time, the channels will be made of code.