Retailers Strike Back: Stablecoins Are Disrupting the Payment Empire—Here's How to Profit

The era of Visa and Mastercard dominating payments may be nearing its end. Retailers like Walmart, Amazon, and PayPal are weaponizing stablecoins to slash $160 billion in annual interchange fees—a cash cow for banks that's about to bleed out. This isn't just about saving money; it's a full-blown revolution in payment infrastructure. And investors who move first stand to profit handsomely.

The Interchange Fee Problem: A Cash Drain for Retailers

Interchange fees—the 2-3% charged on every credit card transaction—are a financial millstone for retailers. In 2022 alone, Walmart spent $98.5 billion on “fulfillment costs,” a category that includes these fees. Amazon's expenses are similarly staggering. For low-margin businesses like grocers (think Kroger), even a 0.1% fee reduction could double profitability. Stablecoins, which bypass banks entirely, offer a lifeline.

The Stablecoin Solution: Speed, Savings, and Sovereignty

Stablecoins like PayPal's PYUSD or Walmart's proposed USD-backed digital currency are fiat-pegged tokens that enable real-time transactions at a fraction of the cost. For example, Visa's traditional fees average 2.9%+ per transaction, while stablecoin networks can process payments for as low as 1.5%. The savings are astronomical: Walmart's profits could jump 60% if it fully adopts this tech.

But it's not just about cost. Stablecoins let retailers retain control. Instead of letting banks pocket billions, retailers can invest those savings into their businesses—or even earn interest on the reserves backing their stablecoins. This is payment infrastructure disruption at its finest.

Who's Leading the Charge—and How to Play It

1. PayPal (PYPL): Already ahead with PYUSD, PayPal's stablecoin is integrated into its Venmo and PayPal wallets, offering rewards and cross-border ease.
2. Why buy? PayPal's ecosystem has 435 million active users—a built-in audience for stablecoin adoption.

4. Walmart (WMT): Filed a patent for a USD-backed digital currency in 2019. Imagine using Walmart Cash to buy groceries at a 2% discount—while the retailer pockets the savings.

5. Why buy? Walmart's $600 billion in annual revenue makes it a cash machine primed for disruption.

6. Circle (CRYPTO): The issuer of USDC, the second-largest stablecoin, is the backbone of this movement. USDC's market cap hit $39.7 billion in early 2025.

7. Why buy? Circle's partnerships with Visa and Mastercard mean it's already embedded in the system it's disrupting.

8. Stripe (acquired Bridge.xyz): Now enabling businesses to adopt stablecoins seamlessly. Think of it as the “Amazon Web Services” of crypto payments.

The Risks: Regulators and Consumer Hesitation

Don't underestimate the hurdles. The GENIUS Act (a U.S. stablecoin regulation bill) could force issuers to hold reserves in Treasurys, adding compliance costs. Meanwhile, consumers still trust credit cards for rewards and fraud protection. Retailers must incentivize adoption—like Starbucks' app-based loyalty system—by linking stablecoins to discounts or faster refunds.

Cramer's Call: Go Bold, But Stay Smart

This isn't a “buy and hold” trend—it's a seismic shift. Here's how to play it:
1. Buy the disruptors: Allocate 5-10% of your portfolio to PayPal (PYPL), Circle (CRYPTO), and Stripe (if/when it goes public). Historical backtests of short-term strategies (e.g., holding PYPL for 20 days after outperforming JPMorgan's revenue growth) showed a maximum drawdown of -32.77%, underscoring the need for patience.
2. Look for retail winners: Walmart (WMT) and Amazon (AMZN) could see valuation upgrades as their margins expand.
3. Avoid legacy banks: Visa (V) and Mastercard (MA) are ripe for disruption—their dominance is fading.

The bottom line? Stablecoins are the future of payments. Investors who bet on the companies enabling this shift will be laughing all the way to the bank—just like the retailers they're helping to save billions.

—Jim