Why Crypto Credit Cards Struggle to Replace Visa

Article by: Vaidik Mandloi

Compiled by: Luffy, Foresight News

Did you know? In July, cryptocurrency credit card spending exceeded $759 million across 9 million transactions—nearly two and a half times the amount from the same period last year. Moreover, over 90% of this spending was still made using Visa cards.

Almost all crypto debit card projects tell the same story: leveraging stablecoin payment channels to bypass card network fees and returning the saved costs to merchants. We previously explored this logic when analyzing Stripe’s construction of a stablecoin-based cross-border payment infrastructure.

To this end, I delved into a core question: What would actually happen if we tried to bypass traditional card networks? Could truly removing Visa and Mastercard reduce costs for merchants? And which layer of the payment infrastructure could stablecoins actually replace?

The final conclusion was completely unexpected.

How does the payment system work?

To find the answer, first clarify where the fees go when consumers swipe their cards. I initially recognized a common misconception: many people, including numerous professionals in the crypto industry, assume that card networks like Visa take the largest share of the fees.