On September 24, the U.S. Department of Justice (DOJ) filed a complaint against payments giant Visa (NASDAQ: V) in a New York federal court.
The complaint alleges that Visa, which processes 60% of all U.S. debit transactions, uses unfair practices such as exclusivity agreements and fines against partner merchants. It also alleges Visa uses its vast resources to entice would-be competitors to partner up rather than compete.
While Visa profited $18.3 billion in 2023, an increase of 14% year-on-year (YoY), the DOJ argues that its anti-competitive practices ultimately lead to higher customer prices.
It wouldn’t be the first time a payments giant has acted ruthlessly to protect its turf; check out the Bitcoin Mastercard conspiracy for another example.
What does this mean for Bitcoin?
While it probably doesn’t mean much for BTC, the anti-trust case against Visa has implications for Bitcoin as an electronic cash system.
For years, blockchain experts and entrepreneurs have been working to scale Bitcoin so it can act as a global peer-to-peer cash system, just as Satoshi Nakamoto wanted. With Teranode scaling BSV to over a million transactions per second (TPS), the time is near when it will be capable of doing so on the mainnet.
Visa processed 212.6 billion transactions in 2023—a truly staggering number. However, when Teranode goes live, BSV will be capable of processing that in just 212,600 seconds or 59.05 hours. That’s all of Visa’s annual transactions without breaking a sweat!
Blockchain-based payment systems on the horizon?
The timing is auspicious—with Teranode set to go live in early 2025, the Visa anti-trust case could see some renewed interest in building rival payment processors on top of the BSV blockchain.
If Visa’s alleged anti-competitive practices are dealt with, merchants could look for new, low-fee alternatives, and with the MNEE stablecoin eliminating the need to use volatile digital currencies like Bitcoin at the wallet level, the timing is perfect for a blockchain-based Visa competitor to emerge.
While this would take a while to build out and gain adoption, the path is now open for building a low-cost, scalable alternative to Visa. As well as saving merchants a fortune on transaction fees and dreaded chargebacks, such a system would be capable of processing tiny payments, potentially creating an economic boom.
How so? All manner of innovation is possible when customers can pay in USD micropayments. For example, paying a few cents to read a news story on the Wall Street Journal could do away with paywalls and outdated subscription models. It would also open online and offline commerce to many people and use cases that get locked out by Visa’s $0.04 minimum transaction fee. In-app payments, online tipping, and IoT machine-to-machine payments could create a new economy.
Cheers to the DOJ for considering the startups and entrepreneurs trying to compete against giants, not to mention the merchants who must pay their pound of flesh! Hopefully, the BSV blockchain can play a role in ushering in the next generation of low-fee, fast-settlement payment systems to rival the outdated giants who have had everything tied up for far too long.
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