MW Visa and Mastercard shares slide on stablecoin fears - but is the selloff too harsh?

By Emily Bary

Walmart and other retailers reportedly are exploring stablecoin ventures, but some analysts are doubtful these will take off with shoppers

Visa Inc. shares are sliding on Friday to pace Dow Jones Industrial Average laggards - and Mastercard Inc.'s stock is falling as well. The two card networks have dominated the payments landscape, but investors worry about potential new competition ahead.

The Wall Street Journal reported on Friday that various merchants, including Walmart Inc. $(WMT)$, are looking into whether issuing stablecoins might make sense for them. Stablecoins are a form of cryptocurrency that have values pegged to the dollar or other types of assets. The fear on Wall Street is that merchants will look to bypass traditional financial players as they look to dodge fees.

Walmart declined to comment. Visa (V) didn't immediately respond to a MarketWatch request for comment. A Mastercard $(MA)$ spokesperson pointed to past commentary suggesting the company can play a role in the growing acceptance of stablecoins.

"We believe in the potential of stablecoins to streamline payments and commerce across the value chain," Jorn Lambert, Mastercard's chief product officer, said in an April release. "Unlocking this is core to how we navigate the rapidly changing world, giving people and businesses the freedom they want by providing the choices they deserve."

Both Visa and Mastercard shares are down more than 4% in Friday's midday action.

But some analysts think investors might be overreacting.

Merchants like Walmart may see value in stablecoins, but Baird's David Koning doubts consumers will see the same appeal. Shoppers "like credit," he noted, flagging the benefits of credit-card points and the ability to pay for purchases later. From a logistical perspective, he's also not sure people "want to take time to move cash to stablecoins," especially when that payment form offers fewer protections than traditional credit and debit cards.

Plus, Koning added, there are already options that let people pay by bank account to avoid card networks. These haven't caught much steam yet, which suggests a stablecoin option might not see real momentum either.

Bernstein's Harshita Rawat was similarly skeptical that the reported merchant initiatives would resonate. She wrote that "traction will likely take years and may be limited to certain cross-border use cases or some emerging countries," while noting that PayPal Holdings Inc. (PYPL) already has a stablecoin that, in her view, hasn't really caught on despite the company's huge user base.

William Blair's Andrew Jeffrey recommended that investors take advantage of the selloff in Visa and Mastercard shares to build positions.

"We do not believe stablecoins are well suited for [business-to-consumer] commerce, even as merchants view them as a potential means of lowering card-acceptance costs," he wrote.

The Wall Street Journal reported that retailers are putting their weight behind the Genius Act, a bill that would drive regulation of the stablecoin industry.

See also: New crypto bill could turbocharge the stablecoin industry

"We question if the government ultimately will permit commercial firms to issue broadly used [stablecoins] though we continue to believe the push to instant payments is inevitable and represents a risk to Visa and [Mastercard]," TD Cowen's Jaret Seiberg wrote.

Visa and Mastercard don't collect interchange fees, which are what merchants pay to card-issuing banks when consumers purchase items using credit or debit cards. But the card networks benefit in other ways from the economics of card payments. Since banks are financially incentivized as well by the current structure, Seiberg said some people doubt whether there's risk to Visa and Mastercard of payment norms changing.

"Our counter has always been that merchants will press the issue, which will force banks to adapt," he wrote. "We view discussion of Amazon and Walmart exploring [stablecoins] as an example of the clout the merchants have to press banks to move to less costly and much faster debit payments."

-Emily Bary

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June 13, 2025 12:40 ET (16:40 GMT)

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