Nico Pei

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How stablecoins will eat payments, and what happens next - a16z crypto
These businesses would now be able to earn a portion of the yield generated on the money flowing through their products, a business model typically reserved for banks, fintechs, and gift-card issuers who make money on user float.
How stablecoins will eat payments, and what happens next - a16z crypto
Stripe’s 1.5% fee will likely be competed down.
How stablecoins will eat payments, and what happens next - a16z crypto
Let’s look at three public companies’ fiscal year 2024 financials to approximate the effect of reducing payment processing to 0.1%
How stablecoins will eat payments, and what happens next - a16z crypto
For every $2 a customer spends on coffee, only $1.70 to $1.80 goes to the coffee shop, with the nearly 15% remaining going to the card companies — merely for facilitating the transaction. But credit cards are only being used for convenience here: Neither the consumer, nor the shop, needs the additional features that justify the fee. The consumer doesn’t need fraud protection (they were just handed a coffee) or a loan (the coffee was $2). And coffee shops have limited compliance and banking integration needs (coffee shops often use comprehensive restaurant management software or nothing at all)…
How stablecoins will eat payments, and what happens next - a16z crypto
Low-dollar transactions — especially low-fraud, in-person transactions, like those at restaurants, coffee shops, or corner stores — are also a promising opportunity. Given their low margins, these businesses are sensitive to cost, so a 15-cent transaction fee charged across a payment solution makes a substantial difference in their profitability.
How stablecoins will eat payments, and what happens next - a16z crypto