Could Stablecoins Threaten Visa and Mastercard?

Visa (NYSE: V) and Mastercard (NYSE: MA), the world's two largest card payment companies, have both delivered multibagger gains since their IPOs. Visa, which went public at a split-adjusted price of $11 in 2008, trades at nearly $370 per share. Mastercard, which went public at a split-adjusted price of $3.90 in 2006, has surged to more than $560 per share.

Visa and Mastercard don't issue any cards of their own. Instead, they partner with financial institutions to issue co-branded cards that are tethered to their card-processing networks. Those partners handle the accounts and take on the debt, while Visa and Mastercard charge a "swipe fee" (usually 1%-3%) for every transaction processed on their networks. Most of those fees are paid back to the card-issuing banks, while Visa and Mastercard keep a single-digit cut.

Image source: Getty Images.

Continue reading