Swipe, Tap, or Token: The Changing Face of Payments

Visa and Mastercard are back in the spotlight as the U.K. Competition Appeal Tribunal rules their interchange fees violate competition law, adding fuel to a long-running legal saga. In the U.S., efforts to regulate credit card competition fell short—for now. Meanwhile, stablecoins are surging into the mainstream following Senate approval of the GENIUS Act, with major players like Amazon, Walmart, Visa, Stripe, and Mastercard racing to stake their claims. On the adoption front, mobile wallets are gaining serious traction for in-store purchases, and a new market forecast predicts payment processing revenue will more than double by 2029, driven by innovations like blockchain, contactless, and embedded payments.

Welcome to Today in Payments, I’m your host, Patti Murphy, here with your weekly dose of payments notes.

U.K. Challenges Card Brands on Interchange

Visa and Mastercard continue to face mounting challenges over interchange fees. The latest development comes from the U.K. Competition Appeal Tribunal, which has ruled that the two companies’ multilateral interchange fees violate competition law, according to reporting by Reuters. The Tribunal is a U.K. specialist judicial body that handles cases involving competition and economic regulation.

This ruling is the latest in a long-running legal saga, with hundreds of merchants filing lawsuits against the card brands. Visa and Mastercard are expected to appeal the decision.

Meanwhile, in the U.S., lawmakers failed in their attempt to attach the Credit Card Competition Act to the GENIUS Act—a bill aimed at creating a regulatory framework for stablecoins. Still, word from Washington is that the debate over credit card industry regulation is far from over.

Firms Scramble to Tap into Stablecoin Market

It’s been a busy news cycle for stablecoins. The U.S. Senate’s approval of the GENIUS Act appears to have kicked the conversation into overdrive. The Act would establish a regulatory framework for stablecoins, but key members of the House have their own ideas—ones that don’t fully align with the Senate’s version. Expect negotiations ahead.

Meanwhile, The Wall Street Journal reports that Amazon, Walmart, and other multinational giants are exploring the possibility of issuing their own stablecoins—bypassing traditional payment systems and costs like interchange.

The shift toward stablecoins and away from traditional payment rails is already underway. Stripe announced last month that it’s working with Shopify and Coinbase to enable stablecoin payments (specifically USDC) on the Shopify e-commerce platform. Shoppers will be able to use their preferred crypto wallets, and merchants can choose to receive payments in local currency deposited directly into their bank accounts—or as USDC to an external wallet.

Visa is also involved. It’s partnering with Stripe and Bridge, the stablecoin platform owned by Stripe, to enable fintech developers using Bridge to issue stablecoin-linked Visa cards through a single API. Cardholders can make purchases from a stablecoin balance at any merchant that accepts Visa. For now, the program is focused on Central and South America, with expansion planned across Europe, Africa, and Asia in the coming months. U.S. availability is likely once a domestic regulatory framework is in place.

Not to be left out, Mastercard is working to integrate Fiserv’s FIUSD stablecoin into its suite of payment products for shared customers.

In a recent CNBC interview, Zac Abrams—co-founder of Bridge—called stablecoins “an entirely new money movement platform,” likening them to the introduction of credit cards in the mid-20th century. He estimated the current market cap of stablecoins at $400 billion and projected it could grow to $2 trillion within a few years.

Payment Processing Market Poised for Continued Growth

A new report from the Business Research Company projects that the global market for payment processing solutions will grow from $121.28 billion in 2024 to $141.1 billion in 2025. That’s a compound annual growth rate (CAGR) of 16.3%.

By 2029, the market is expected to reach $268.74 billion, with an even higher CAGR of 17.5%. Key growth drivers include contactless payments, blockchain integration, embedded payments, and broader adoption of mobile wallets.

Mobile Wallets Gain Traction for In-Store Purchases

Consumers are increasingly turning to mobile wallets for in-store purchases. According to a PYMNTS Intelligence survey of 216,000 consumers across 11 countries, 21% of all in-store transactions in 2023 were made using mobile wallets.

That represents a 10.9% increase over 2022—a clear sign that digital wallets are gaining traction globally.

That’s all for Today in Payments. Stay tuned for your weekly dose of payments notes.