The payment war shifts to distribution as stablecoins reach mainstream status

“Both Stripe and PayPal do approximately the same amount of payment volume, but Stripe has about one-fifth the net revenue,” Hadick said. “From a financial perspective, this is obviously accretive, and it helps them connect their merchant processing business, which is at risk of being commoditized, with a broad subset of PayPal’s more than 400 million accounts.”

Hadick also cautioned that executing a deal of that size would be difficult. “M&A integration in something of this size is incredibly hard,” he said.

Beyond merchant payments

Eric Queathem, CEO of Velocity, said the acquisition would also give Stripe access to one of the world’s largest consumer payments ecosystems, providing a platform to expand beyond merchant payments.

The proposed acquisition would also determine who controls the consumer side of blockchain-based payment infrastructure, complementing Stripe’s existing merchant network and stablecoin capabilities.

Several executives said the competitive focus has shifted from proving blockchain technology works to controlling distribution.

Pankaj Bengani, founder and CEO of Meld, agreed with Larbi that the race is on.

“The race has shifted from proving the technology works to owning distribution,” said Bengani, adding that “stablecoins have graduated from experiment to core payments infrastructure.”

Citi analysts reached a similar conclusion in a research note, writing that stablecoin competition has become “a default-setting game,” with scale accruing to whichever stablecoin becomes the default across the largest merchant, consumer wallet or autonomous transaction base, rather than to the issuer with the best technology.