Merchants in the U.S. cough up more than $100 billion a year in credit and debit card processing fees. These costs quietly inflate the price of nearly everything you buy—from your sandwich to your shoes to your rideshare. It's a hidden tax most consumers don't know they're paying, funding a system that disproportionately rewards the affluent and penalizes everyone else.

For years, digital asset advocates have pointed to crypto and more recently to stablecoins—digital tokens pegged to and backed by U.S. dollars—as a way out. In theory, they offer low-cost, peer-to-peer transactions that bypass card networks entirely. In practice, they've barely made a dent in the U.S. payments market. Not because the tech doesn't work, but because the incentives are misaligned.

Credit and debit cards offer consumers convenience, protection and—crucially—rewards. Stablecoins offer speed, transparency and cost-efficiency, but they haven't yet been paired with the right reward incentives to drive mainstream consumer adoption in the U.S. Until that changes, we'll remain locked into a payment system where every tap, swipe and scan quietly reinforces one of the most punishing financial frameworks in the modern economy.

Hidden Cost of Your Points

Most Americans don't realize that the 2 percent cash back on their Amex or Chase card doesn't come from the bank's generosity—it comes out of the merchants' P&L. For small businesses, those fees can run up to 4 percent per transaction. Larger retailers negotiate better rates, but even then, the fees are a meaningful drag on margins. In total, U.S. merchants paid $187.2 billion in payment processing fees in 2024.

To cover those costs, merchants have no choice but to raise prices across the board—effectively charging everyone, regardless of payment method, a premium to support the rewards of the well-banked.

The result is perverse: Those with the best credit scores get perks, while those paying with cash or debit help subsidize them. It's not just economically inefficient. It's upside-down redistribution.

Stablecoins Could End Fee Loop, But They're Stuck Outside It

Stablecoins have been heralded as a cleaner alternative. By design, they settle quickly, don't require intermediaries, and offer the potential for nearly fee-free transactions. In countries with unstable currencies or unreliable banking infrastructure, that's a game-changer. In regions such as Argentina and Nigeria, stablecoins have emerged as a critical tool to combat high inflation. With stronger inherent incentives, stablecoins have already started to thrive in those places.

But in the U.S., stablecoins offer little noticeable benefit when it comes to day-to-day commerce. Most consumers don't see a compelling reason to switch. They're not directly paying the merchant fees, and they're satisfied with credit card rewards programs. Despite the inarguable logic, the current system limits convenience and ultimately costs consumers. The emotional satisfaction of collecting rewards points still drives consumer behavior.

And while merchants have strong motivations to switch, there's no clear path to overpower the status quo. Millions of customers are already used to paying with cards, and disrupting the checkout process might lose their business.

Starbucks Playbook

There is, however, precedent. Retailers that have successfully leveraged their own loyalty programs to reduce payment processing fees. Starbucks, for example, nudges users toward loading funds onto a digital gift card by offering more rewards. Why? Because those payments bypass the branded card networks and are processed in closed loop payment systems—saving Starbucks millions.

A similar strategy can apply to stablecoins. If merchants offered better deals, faster service or loyalty perks for stablecoin transactions, they might start to shift behavior at scale. The foundational technology is already here. What's missing is the carrot.

And a few carrots go a long way. In a high-margin business—or a low-margin one fighting for survival—even a 2 percent fee reduction can justify creative rewards.

Some early movers are experimenting with exactly this—offering cash discounts, extra loyalty points or even exclusive deals for users who pay with crypto wallets instead of cards. It's not widespread yet, but the logic is sound.

Adoption Won't Come From Issuers Alone

It's natural to wonder why stablecoin issuers haven't done more to drive consumer adoption. But in the U.S., regulations prevent them from offering yield or interest, limiting their ability to incentivize users directly.

That's not a flaw. It's a feature of the ecosystem. Stablecoins do what they're designed to do: provide fast, transparent, dollar-pegged settlement. The next layer—the one that shifts consumer behavior—doesn't need to come from the issuers. It can come from the apps, platforms and merchants building on top of them.

That's how this scales—not by turning stablecoins into banks, but by giving merchants tools to bypass banks altogether.

Stablecoins aren't a new Visa. They're the rails that let merchants opt out.

Americans Won't Switch for Principles but Will for Perks

Let's be honest: No one's giving up credit and debit cards for ideological reasons. Convenience and rewards matter far more. And even the consumers that realize the indirect costs of using cards and collecting points feel and frankly are powerless to overcome the status quo.

But people will change their behavior with the right incentives. If stablecoin payments come with bigger rewards, better prices or exclusive perks—and if they're just as easy to use as a card—behavior will follow. Not overnight, but fast enough to matter.

That's the real opportunity here. Stablecoins don't need to win on technical purity. They need to win on user experience and economics.

And that means merchants have to lead. Not regulators. Not blockchain idealists. Not even stablecoin issuers. Merchants are the ones footing the bill for the current system. They're the ones with the power to reshape it. All they need now is the will—and maybe a better loyalty program.

Ron Tarter is co-founder of MNEE, a platform developing incentive-driven stablecoin payments infrastructure for merchant applications.