Visa has announced that it will enable its merchant acquirers to settle transactions in stablecoins, which are cryptocurrencies pegged to a fiat currency or a commodity. To do this, Visa is partnering with blockchain company Solana and merchant acquirers Worldpay and Nuvei.

This means that merchants who accept Visa cards can choose to receive their payments in a digital currency that is more stable and less volatile than other cryptocurrencies. “This is a big step for the development of digital currencies as a tool within financial services,” said James Wester, Head of Cryptocurrency at Javelin Strategy & Research. “The settlement process is not an area that consumers see, but it’s a crucial part of how merchants accept payments; it affects their costs and access to funds.” Visa’s embrace of stablecoins and blockchain technology could transform the way money moves around the world. By allowing its merchant acquirers to settle transactions in stablecoins, Visa is reducing the friction and cost of cross-border payments, enhancing the efficiency and security of the payment system, and providing more choice and flexibility to customers and partners.

This news also means that Visa is positioning itself as a leader and a bridge between the traditional and the digital payment worlds. Visa’s move is interesting for a few reasons. First, it reflects the growing popularity and adoption of stablecoins, which are seen as a reliable and scalable form of digital currency.  Second, it demonstrates the increasing convergence and collaboration between fintech companies and traditional financial institutions, which are leveraging each other’s strengths and capabilities to offer better products and services to customers.  Third, it indicates the evolution and diversification of the credit card industry, which is facing new challenges and opportunities from the emergence of alternative payment methods, such as mobile wallets, peer-to-peer payments, and cryptocurrencies. By supporting stablecoin settlement, Visa is enhancing its value proposition and competitiveness in an increasingly diverse global payment market. “By introducing stablecoins into the process, Visa is demonstrating how digital currencies can make settlement more efficient,” Wester said.

“This is potentially good for merchants, but it’s also good for digital currencies as it’s a strong use case for highlighting their utility.”

By Josh Einis
Sep 06, 2023 00:00
Original link