Could Stablecoin Startups Challenge Card Networks?

Card networks have an advantage in digital payments because they address issues most consumers don’t even know exist. They link banks, merchants, processors, and customers in seconds and handle fraud rules, chargebacks, settlement, and global acceptance. It is difficult for any start-up to challenge that system.

But for stablecoin startups, the discussion is getting more serious, as digital dollars can be transferred internationally in a flash, settled, and processed 24 hours a day, without some of the expense layers found in traditional cards.

Crypto enthusiasts are shifting from payments to trading and speculating on cryptocurrency movements, like the price of dogecoin, which is a telling sign that cryptocurrencies are now an integral part of a broader financial culture.

Nevertheless, this is not the case with stablecoins. They are not meant for fluctuations. The latter sees them as a potential alternative to card rails since they are engineered to maintain a stable value.

Why Card Networks Are Hard to Beat

Visa and Mastercard are more than just payment brands. They are global trust systems. In fiscal 2025, Visa handled about 257.5 billion transactions and processed about $14.2 trillion in payments. A startup can hardly match that scale in a short time.

Another advantage that stablecoins need to overcome is consumer familiarity, which card networks already have. Someone can tap a card, dispute a payment, and be assured the merchant will likely accept it and offer fraud protection. This experience has been developed over many years.

Stablecoin startups might provide faster settlements and lower fees; however, they still must address the practical aspects of payments. Merchants need accounting tools. Customers want wallets that are easy to use. Regulators need clarity on the rules. Companies want assurance that transactions won’t create additional compliance issues.

Where Startups Can Compete First

In the short term, stablecoin startups will not be able to replace card networks at the supermarket checkout. The opportunity is much greater for payment categories where cards are inefficient.

The most obvious example is cross-border business payments. A business that pays contractors in five countries might face bank delays, plus foreign exchange and payment processor charges. Stablecoins are also available to move around, settle quicker, sometimes in minutes, and not days.

There’s also the chance of a merchant settlement. Card payments are fast, but settlement can take time. However, for businesses seeking faster access to cash, stablecoins offer on-chain settlement of value.

A great example is Binance, which has already demonstrated the significance of stablecoins in crypto payments. Binance Pay boasts tens of millions of users and has processed hundreds of billions of dollars in transactions since 2021.

Why Exchanges Matter to the Payment Story

Binance is not a card network, but it shows the potential for crypto platforms to make stablecoin use scale and become routine. For users who already have USDT, USDC, or other stablecoins on Binance, sending value via a crypto payment product may be the next logical step.

This matters because payment habits typically mirror where balances are held. Individuals use cards because their cash is linked to bank accounts. Crypto users can use stablecoins because their money is already held on exchanges or in wallets. Binance has contributed to the ecosystem by offering a one-stop trading and payment solution for its users, allowing them to access stablecoin markets and trading pairs conveniently.

That’s a good thing – and a bad thing – for startups. They can leverage existing stablecoin liquidity, but they’ll also have to compete with larger platforms such as Binance, which already have users, wallets, and infrastructure.

The Biggest Weakness Is Consumer Protection

While perhaps slower, card networks offer stronger protection for stablecoins. Card networks have clear dispute processes if a payment goes wrong. If a customer is defrauded, they may have chargeback rights. When a merchant doesn’t deliver, the card network and issuing bank might offer recourse.

Stablecoin transactions don’t have as much leeway. Funds are irrevocable once sent to the wrong wallet. Fraud recovery can be challenging. Conflict could hinge on the platform and the merchant/court system. That makes stablecoins appealing for some business use cases, but more challenging for mainstream retail payments.

Startups should innovate here. They can’t just argue that stablecoins are less expensive. They should improve refunds, escrow, identity, compliance, and user support.

Could They Really Challenge Cards?

Stablecoin startups can compete with card networks in certain areas, particularly cross-border payments, business settlement, digital marketplaces, and crypto-native commerce. They offer benefits in speed, cost, and the ability to move value 24/7.

However, it is much more difficult to challenge all of the cards in every location. Visa and Mastercard possess scale, consumer and merchant behavior, and fraud capabilities. Stablecoins need better user experience, clearer regulation, and stronger protections.

Stablecoins are unlikely to replace cards overnight. It’s a gradual separation. But cards might remain dominant in everyday retail, and stablecoin startups could capture high-friction payment scenarios, where the benefits of speed and settlement outweigh rewards points or chargebacks.

But it is still a threat. Startups aim to turn stablecoins from crypto balances into something easy to use for payments, and card networks will have to adjust accordingly if they don’t go under altogether.