Shares of the payment processor Mastercard (NYSE:MA) had fallen nearly 5% as of 12:30 p.m. EST for no obvious reason, although it likely has something to do with the news that came out today about its rival Visa (NYSE:V).
The market isn't exactly having a great day, with the Dow Jones Industrial Average down, but the more likely reason for the decline in Mastercard shares seems connected to Amazon's (NASDAQ:AMZN) decision to soon stop taking payments from Visa credit cards issued in the United Kingdom. Amazon attributed the decision to the high fees it pays Visa for transactions.
I don't think this is the be-all and end-all for Mastercard or Visa. The two companies have set up some of the largest payment rails in the world, and both businesses appear to have benefited from the pandemic because the use of digital payments has accelerated.
But it does present likely far-off concern for Mastercard and Visa. As more and more payment options come into play, with alternatives like blockchain being able to potentially cut out the middlemen in the payments process, transaction fees may decline over time and may not be as pervasive as they are today.