Visa's Relationship with Cryptocurrency: Bjelic of Polygon Offers Opinion
In the ever-evolving world of finance, the practice of Visa charging merchants transaction fees, commonly known as swipe fees, has become a topic of discussion. These fees, while regulated to some extent, can be costly for merchants accepting card payments.
Mihailo Bjelic, co-founder of Polygon, and Vitalik Buterin of Ethereum have raised concerns about these fees, particularly in the context of the cryptocurrency sector. They argue that new technologies like stablecoins and blockchain could disrupt traditional payment systems by bypassing these fees and reducing friction.
However, Visa's head of crypto, Cuy Sheffield, has stated that the company does not view stablecoins and crypto payment innovations as a significant threat to their business. Instead, Visa is adapting by integrating stablecoin settlement on blockchain rails to enhance efficiency and reduce costs for cross-border and institutional transactions.
This adaptation is evident in Visa's collaboration with Tangem, a hardware wallet and credit card integration aimed at making payments a seamless transaction, blurring the line between crypto and fiat payments.
Despite this, Bjelic has expressed confusion over the labeling of Visa as oppressive in its business approach. He maintains that Visa's practices could be considered extractive, but it is a normal business move. He argues that Visa is simply leveraging its competitive market power, and it might be inaccurate to consider the practice as oppressive or bad for the crypto sector.
The debate about Visa's practices in the crypto sector is ongoing, with some viewing it as an attempt to control and centralize the space. This concern might have been triggered by the crypto space's emphasis on decentralization.
However, recent developments suggest that large corporations, such as Amazon and Walmart, could issue their own stablecoins, potentially reducing their reliance on Visa’s network. This could affect merchant fee dynamics and pose a competitive challenge to Visa’s fee-based revenue model.
In conclusion, Visa's fees represent a traditional cost structure in the finance industry, but they also serve as an impetus for blockchain solutions that crypto leaders advocate. Visa, in turn, is adapting by incorporating blockchain technology, demonstrating a complex interaction between the two entities.
- Mihailo Bjelic and Vitalik Buterin, prominent figures in the cryptocurrency sector, have voiced concerns about swipe fees in traditional payment systems, arguing that new technologies like stablecoins and blockchain can reduce costs by bypassing these fees.
- Visa's adaptation to the changing landscape can be seen in its collaboration with Tangem, a project that aims to integrate hardware wallet and credit card technology, blending crypto and fiat payments seamlessly.
- The debate about Visa's practices in the crypto sector is ongoing, with some viewing it as an attempt to control and centralize the space, due to its traditional cost structure.
- The emergence of large corporations, such as Amazon and Walmart, potentially issuing their own stablecoins could impact merchant fee dynamics, posing a competitive challenge to Visa’s fee-based revenue model, further accelerating the interaction between traditional finance and blockchain.
