Stablecoin Frenzy Rocks Payment Duopoly? Visa (V.US) and Mastercard (MA.US) Report Strong Earnings, but Moat Shows Cracks
According to reports from Zhitong Caifeng APP, the cryptocurrency craze is further heightening uncertainty in the US credit card duopoly. Top executives from Visa (V.US) and Mastercard (MA.US) faced the possibility of accelerated adoption of stablecoins in their recent earnings calls, downplaying the potential threat to their payment networks posed by digital currencies pegged to fiat money. Despite both companies enjoying a stable profit performance and strong valuation levels that have provided market reassurance, Circle Internet Group's (CRCL.US) market value has surged past $400 billion, revealing capital markets' divided expectations for the payment industry - two sets of investors struggling to maintain correct judgments.
Historical experience shows that credit card giants are resilient. In the second quarter, Visa's net profit rose 8% to $53 billion, while Mastercard's increased 14% to $37 billion, both exceeding analysts' expectations. Leveraging their dominant market share in US transactions (around 70%, according to Nielsen data), their networks' widespread adoption and reliability have built a moat against emerging payment applications like Venmo.
On the political front, the Trump administration's easing of regulatory pressures has been inconsistent but ultimately unchanged. Over the past year, Visa and Mastercard's stock prices have risen by 31% and 24%, respectively, reflecting capital markets' recognition of their profitability.
The core tension in this high-profit business lies in the continued compression of interchange fees. In recent years, both companies have collected around $95 billion from merchants in card transaction fees, but Visa's per-transaction fee has dropped to 6.6 cents in the latest quarter, a significant decline from nearly 9 cents a decade ago; Mastercard, while experiencing slight increases due to exchange rate fluctuations, still averages 7.3 cents per transaction, lower than its previous year's average of around 8 cents.
Although stablecoins' current transaction volume remains relatively small compared to the credit card network's (around $150 billion in annual processing volume), their application primarily focuses on markets with extreme fiat currency fluctuations, but the downward trend in single-fee charges has exposed the vulnerability of traditional payment systems. Large retailers like Walmart are exploring tokenized payment schemes, foreshadowing an accumulation of pressure for change.
Currently, Visa and Mastercard are mitigating income losses through consulting services and other value-added offerings, maintaining their earnings stability. However, Circle's market value has surged since its June listing, reflecting the market's overly optimistic expectations for stablecoin adoption, which, combined with the influx of other institutions into this field, may become a catalyst for overturning the existing framework. If digital currencies truly break through the limitations of unstable regions, these two previously regarded "unshakeable" credit card giants will face fundamental challenges to their market positions.