This week 2 payments giants made big announcements about their intentions for cryptocurrencies.
Visa revealed that it would allow users to use USD Coin, a cryptocurrency tied to the value of the US dollar, to settle transactions on its payment network and PayPal announced that US consumers would be able to use their cryptocurrency holdings to pay for items from millions of online merchants.
Cash, credit or crypto?
This is a fairly big deal for cryptocurrencies generally, but it's also a big moment for the legacy payment providers. Visa and PayPal are among the largest US payment firms, along with Mastercard and American Express — and all of them are trying to position themselves to best capture the increasingly digital way that we pay for... stuff.
From 2011-2019, those 4 payments companies all grew their revenue consistently, but last year the 3 largest card companies saw revenue fall, as consumers spending on credit and debit cards dried up. PayPal however grew 20%, as the facilitator of choice for millions of online, rather than physical, merchants.
Whether Visa or PayPal management seriously believe in cryptocurrencies as the future of payments, or whether these features are just a way to hedge their bets a bit, isn't clear. What is clear is that there are a lot of companies that want to take their, very sizable, lunch (these 4 companies did $85bn+ of revenue last year alone). Competition in payments is only going to intensify from here.
