In an episode of the “All-in-podcast” released Wednesday, Billionaire investor and former Facebook executive Chamath Palihapitiya expressed some very bold views and predictions on payment companies Visa and MasterCard. In essence, Palihapitiya predicts the downfall of both businesses during 2022 because of competition from Web3- and crypto-based payment projects.
“My biggest business loser for 2022 is Visa and MasterCard and traditional payment rails and the entire ecosystem around it”. The long-standing payment systems used all over the world are a “completely contrived duopoly that doesn’t need to exist,” Palihapitiya said.
“Be short these companies and anybody that basically lives off of this 2 or 3 percent transaction tax, and be long well-thought-out, Web3 crypto projects that are rebuilding payments infrastructure in a completely decentralized way,” Palihapitiya said.
“If you read the whitepapers of these crypto projects, and you systematically put together a framework, I think you can be long those and you can be short Visa/MasterCard, because I think this is their peak market cap,” he added.
Adoption will begin in the developing world
“The canary in the coal mine here is pretty significant. Amazon is not going to do something like that, in my opinion, unless it’s a test of what they can do all around the world. There really is no need today for all these small businesses to sit on top of Visa, MasterCard, and AmEx rails. It’s unnecessary,” Palihapitiya said.
The Adoption of the emergent Web3-based payment technology will, in Palihapitya’s opinion, begin in the developing world. “This is why I think focusing in markets like Nigeria to me are way more exciting than talking about these fading Western European countries. This is where this stuff will happen,” he said.
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