Wrapping up 2025:  Stablecoins

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MoneyGram – Stablecoins, Strategic Shifts & Future of Remittances

Key insights 

• Industry pricing has likely reached a structural floor, constrained by agent commissions and interchange costs. This dynamic implies normalised EBITDA margins in 15-16% range – below historical 17-21% range – as competitive intensity and cost ceilings limit further leverage
• Stablecoin settlement presents a long-term cost-reduction and efficiency lever, but near-term impact remains muted. Broader adoption hinges on banking sector tokenisation and regulatory standardisation, which are prerequisites for scaled blockchain settlement in remittances
• Competitive outcomes will increasingly favour institutions with scale, diversification and balance sheet strength. Incumbents such as Western Union and MoneyGram must evolve beyond single-threaded remittance into wallets and value-added financial services
• MoneyGram has undergone a major transformation, overhauling its compliance systems, shifting to a cloud-based infrastructure and accelerating digital adoption under private ownership. It now balances its legacy cash business with the push to scale digitally, having increased digital transactions from c3% to the mid-30% range

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Visa – Value-added Services Strategy & Future of the Network

Key insights 

• Expert is confident Visa will achieve its goal of >20% growth in VAS, with emphasis on monetising Visa Consulting & Analytics and scaling Visa Token Service as significant revenue drivers
• Visa Consulting & Analytics is transitioning from a free service to a monetised offering, aiming to reach billions of dollars in revenue and represent 10-15% of the VAS business
• Expert expects Visa's VAS business to maintain 20%-plus growth in the near term, but it may shrink in the next 5-10 years due to market saturation
• Visa has struggled to scale VAS penetration beyond its top 200 clients due to pricing, integration challenges and tough negotiations. Expert says many large clients are already using most available services, so future revenue growth will likely come from innovating existing offerings
• Visa is adapting to stablecoins and digital currencies by shifting thresholds for non-fiat currencies and enabling transactions with integrated VAS offerings

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Visa – Cross-border Payments & Value-added Services Growth Outlook

Key insights 

• Merchant-led stablecoin adoption poses the greatest disintermediation risk to Visa's core role in payments, particularly in e-commerce and cross-border B2B payment flows
• While stablecoins could reduce Visa's traditional cross-border volumes and lower per-transaction fees, specialist believes the company is well-positioned to offset this through increased volume and VAS. Its strategy is to embed itself as a core enabler within the stablecoin ecosystem, playing a transformative role rather than resisting change
• Bigger long-term risk is maintaining market share as new players form alliances and chip away at Visa's share of payment flows, potentially impacting revenue growth and margins
• Visa's VAS TAM penetration could reach 10-12% in the next five years, up from the current 2%, if the company executes effectively on its strategies
• Visa faces challenges in articulating the value proposition of its numerous VAS, with adoption rates dropping significantly beyond the top 100-200 clients

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