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The End Of Interchange

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In 2013 and 2014, USV made a number of payments-related investments and we went deep on both consumer and business-to-business payments infrastructure. By the latter part of that decade, we had come to believe that the credit card system, and the interchange fees that make up much of the cost of the credit card system, is eventually going to go away. Since then, we have had an active investment thesis that we called The End Of Interchange. We use Notion AI to maintain a thesis description based on past meeting notes, emails, and internal discussions related to the topic. Our current thesis description says: USV has had a longstanding interest in the end of the interchange/credit card system and the move to stablecoins and bank-to-bank direct payments. The credit card interchange fee model—where merchants pay 2-3% per transaction—is vulnerable to disruption from: Stablecoins enabling near-zero-cost value transfer Bank-to-bank direct payments (ACH, FedNow, etc.) with identity/security la

The End Of Interchange In 2013 and 2014, USV made a number of payments-related investments and we went deep on both consumer and business-to-business payments infrastructure. By the latter part of that decade, we had come to believe that the credit card system, and the interchange fees that make up much of the cost of the credit card system, is eventually going to go away. Since then, we have had an active investment thesis that we called The End Of Interchange. We use Notion AI to maintain a thesis description based on past meeting notes, emails, and internal discussions related to the topic.

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