The "deadly threat" of credit cards and online payments: Why are Walmart and Amazon also issuing stablecoins?

Retail giants like Walmart and Amazon are quietly laying out their plans for stablecoin payments. This seemingly innovative financial experiment is, in fact, a direct challenge to traditional payment powerhouses like Visa and Mastercard—annual fees amounting to billions of dollars have finally compelled these retail giants to seek solutions that could completely disrupt the existing rules of the game.

As mentioned in a previous article by Wallstreetcn, multinational giants such as Walmart and Amazon have recently begun exploring the possibility of issuing their own stablecoins in the United States. Online travel giant Expedia and other large companies, including airlines, are also discussing plans to issue stablecoins.

Bloomberg's latest analysis points out that these companies' motivation for issuing stablecoins is not to embrace cryptocurrency innovation, but rather to gain new negotiating leverage in their long-standing fee disputes with Visa and Mastercard, or even to completely bypass traditional payment networks. Each year, these retailers pay billions of dollars in fees within traditional payment systems, including interchange fees incurred when customers use credit or debit cards for purchases. Even more frustrating is that payment settlements often take several days, delaying merchants' receipt of sales revenue.

Stablecoins offer the enticing prospect of instant settlement—funds do not have to wait several days to arrive as they do with traditional credit card transactions. More importantly, this could help them escape the predicament of paying high processing fees to banks and payment networks.

Doug Kantor, General Counsel of the National Association of Convenience Stores, candidly stated:

The reason the fees are so high is that Visa and Mastercard have organized banks across the country into a textbook case of a pricing cartel, telling banks how much to charge merchants. The result is that all these banks, which should be competing with each other, do not compete on the fees they charge merchants for card transactions.

Retail Giants Attempt to Bypass Traditional Payment Networks

Retail giants have long sought to introduce alternative payment solutions to bypass the card-based systems dominated by Visa and Mastercard.

Walmart has already taken the lead in the pay-by-bank sector, which allows consumers to pay merchants directly from their bank accounts without using credit or debit cards. Last year, Walmart announced an upgraded version of its pay-by-bank service.

The article from Wallstreetcn also mentioned that Walmart has lobbied to add a separate amendment to the GENIUS Act to introduce more competition in the credit card industry. The company has long sought to enter the financial services sector, hoping to leverage its network of millions of customers and employees.

Amazon's related efforts are still in the early stages, with some discussions focused on launching the company's own token for online shopping. Even if they decide not to issue their own stablecoin, these companies are weighing how to use external stablecoins, such as through a merchant alliance led by a stablecoin issuer With the Trump administration relaxing cryptocurrency regulations and advancing the GENIUS Act to establish a regulatory framework for stablecoins, stablecoins are facing unprecedented development opportunities.

In recent months, a business trade organization led by the Merchant Payment Alliance has been in talks with U.S. lawmakers to push for the passage of the GENIUS Act. These trade organizations state that the regulatory framework for stablecoins will provide merchants with an alternative payment method that can significantly reduce their costs and compete with Visa and Mastercard.

Traditional Payment Networks Strike Back

In the face of potential threats, traditional payment providers like Visa and Mastercard are not sitting idly by. Both companies are trying to position themselves as key infrastructure providers in the stablecoin ecosystem.

Last year, Visa announced the launch of a platform to help banks issue their own fiat-backed tokens. Recently, the network also collaborated with Stripe's Bridge division to allow businesses to launch credit cards associated with stablecoins. Mastercard has added stablecoin settlement support for merchants.

Mastercard's Chief Product Officer Jorn Lambert stated in a statement last month: "Unlocking this potential is crucial for how we respond to a rapidly changing world, providing people and businesses with the freedom they want by offering them the choices they deserve."

Meanwhile, other participants in the payment ecosystem are also accelerating their layouts. Shopify announced this week that it will allow merchants on its platform to accept stablecoin payments, supported by Stripe and Coinbase.

The Real Challenge of Consumer Acceptance

Although stablecoins offer significant advantages to merchants, convincing consumers to abandon their habitual use of credit cards is another matter. Sanjay Sakhrani, Managing Director and Senior Analyst at Keefe, Bruyette & Woods, pointed out: "Price and settlement time are indeed beneficial for merchants, but they don't mean much to consumers."

Stablecoins also require consumers to have a cryptocurrency wallet, which typically needs to be set up through third-party platforms like MetaMask or Coinbase Wallet, adding friction to the purchasing experience. More importantly, consumers need to see clear advantages over traditional credit cards, especially when credit products offer reward points.

PayPal is attempting to address some of the use case issues by building a platform that helps merchants pay overseas suppliers with stablecoins.

However, history shows that this path is not easy. The promotion of bank direct payments in the U.S. has been slow, leaving many failed cases. For example, the Merchant Customer Exchange (MCX), supported by a coalition of U.S. retailers including Walmart and Target, did not gain widespread adoption before being acquired by JP Morgan nearly a decade ago.

Scott Talbott, Executive Vice President of the Electronic Transactions Association, warned: "Any new system will have its challenges, risks, and costs, and stablecoins will be subject to the same forces."