Retailers Embrace Stablecoins. But Will Shoppers Care?

Stablecoins have been the big buzzword in the crypto industry, following the passage of the U.S. Stablecoin bill in the Senate last month. Notably, its not just the crypto enthusiasts who are interested this time around –  it’s actually some of the largest retailers and financial institutions. Walmart (NYSE:WMT), Amazon (NASDAQ:AMZN), and payment giants like Fiserv (NYSE:FI) are reportedly exploring stablecoin pilots or building out infrastructure to support them. Why is that? Stablecoins offer much lower fees compared to card networks which typically charge an average of 1.5% per transaction in swipe fees. Stablecoin transactions can settle in seconds, with minimal processing fees and no real intermediaries. That’s incentive enough for high-volume retailers. But here’s the real question: so if stablecoins are a win for merchants, what’s in it for customers?

Image by Mohamed Hassan from Pixabay

Why Retailers Are Flocking To Stablecoins?

Stablecoins are a type of cryptocurrency designed to maintain a 1:1 peg with government-issued currencies such as the U.S. dollar. In essence, they bring the dollar onto the blockchain. That means faster settlements, transparent transactions, and the potential for programmable payments — all without the volatility usually associated with crypto. Recent legislation in the U.S. is adding legitimacy to the space. A stablecoin bill passed in the Senate last month sets clear rules: full reserve backing, regular audits, and anti-money laundering controls. The move is expected to accelerate institutional and retail adoption, paving the way for stablecoins to play a bigger role in payments.

For retailers, the math is compelling. U.S. merchants paid an estimated $187 billion in card fees last year, per the Nilson Report, with a large chunk of it going to the likes of Visa (NYSE:V) and Mastercard (NYSE:MA). That’s a massive number and retailers are obviously looking for ways to cut this massive expense header. Stablecoins give retailers a way to settle transactions instantly, reduce reliance on traditional banks and payment intermediaries, and possibly build more direct relationships with customers.

E-commerce major Shopify, for instance, already lets merchants accept USDC, a dollar-backed stablecoin, through integrations with Coinbase and Stripe. Walmart is reportedly exploring similar options. Meanwhile, Fiserv and others are developing stablecoin infrastructure tailored for smaller banks and fintechs.  There are other benefits too. With programmable features, merchants can create flexible rewards, cashback in tokens, or limited-time discounts triggered by wallet activity. related: Are Stablecoins A Real Threat to Visa and Mastercard Stock?

Will Customers Bite?

That’s the tricky part. Despite the many advantages, stablecoins today don’t look like they will offer a significantly better experience for the average consumers. Cards remain the preferred option for most consumers. They’ve been around for decades, are ubiquitous, easy to use, tie into the current banking system, and come with strong fraud protections and attractive rewards. Meanwhile, stablecoin usage might require customers to set up a separate crypto wallet, adding extra steps to the checkout experience. That adds friction, especially when the existing system is working for customers.  There’s also some precedent. Other low-cost alternatives like pay-by-bank have struggled in the U.S., even though they offer similar advantages for merchants.

Without a clear value prop for consumers at checkout, even well-designed systems may struggle to break through. That said, there’s a lot of room for innovation. If merchants can reinvest even a fraction of the $187 billion they save in swipe fees into customer rewards and incentives, that equation could start to change. Take Shopify, which now offers 1% cashback in USDC when customers pay with stablecoins. Coinbase is reportedly working on infrastructure that would support loyalty programs, credit products, and more and this is tied to stablecoin wallets. If retailers can bundle stablecoin payments with attractive rewards, faster refunds, personalized offers, and added privacy, the proposition becomes a lot more compelling.

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