Americans aren’t being helped, though: High taxes, tariffs, inflation, and costs of regulation (ie government meddling in the economy) all compound to make things that were previously affordable completely unaffordable today.<\/p>\n\n\n\n
Some data to prove the point.<\/p>\n\n\n\n
In the 1950’s the median home value was 2.2x median income. In 2025 that number was 5.5x, and often > 8x in major metro areas.<\/p>\n\n\n\n
In the 1950’s education was a rounding error; tuition has grown at 3-4x the rate of inflation (once again thanks to guaranteed government “demand” via student loans, which has created a bubble on its own<\/a>).<\/p>\n\n\n\n Healthcare in the 1950’s was 5% of GDP. In 2020 healthcare was 18% of GDP.<\/p>\n\n\n\n Goods and service today are much more advanced than those in the 1950’s (i.e. your house today has central A\/C, is safer, etc.) but those improvements have greatly outpaced Americans’ ability to pay for them.<\/p>\n\n\n\n Which helps explain why Americans carry so much debt. <\/p>\n\n\n\n Yes, financial imprudence is half the story, but the other half is that the US government whips its citizens constantly.<\/p>\n\n\n\n However, when moving to B2B, the customer is better at math.<\/p>\n\n\n\n Especially as the size of the business grows.<\/p>\n\n\n\n That’s because customers here graduated from a university, sometimes with a Masters or other advanced degree, are specialists in their field (i.e. accountant, controller, finance professional), and understand how math works. <\/p>\n\n\n\n Ready for the spoiler?<\/p>\n\n\n\n There are two benefits to taking card.<\/p>\n\n\n\n B2B is basically just a game of working capital: do I get paid faster if I eat the 3% to take a card?<\/p>\n\n\n\n Well, smart suppliers say no thank you.<\/p>\n\n\n\n They implement surcharges and dual pricing to get customers to pay with other means, and it works.<\/p>\n\n\n\n For example, an $18B supplier pushed a surcharge and saw 70% of their card volume move to non-card tenders.<\/p>\n\n\n\n They’re getting paid just as quickly, but margins go way up.<\/p>\n\n\n\n The 30% who remained either couldn’t do math (the surcharge was more than their rewards points on the purchase) or needed the float from their credit card.<\/p>\n\n\n\n It’s not the merchant’s responsibility to pay your cost of capital.<\/strong><\/p>\n\n\n\n Sorry. <\/p>\n\n\n\n As RTP<\/a> adoption grows (there are real constraints with ACH, namely that it takes 24 hours to confirm funding and a further 2-3 business days to settle), we have to ask: <\/p>\n\n\n\n What’s the plan for B2B card payments?<\/p>\n\n\n\n We have to think they’ll be used by customers that NEED the float of the card and just can’t get other terms.<\/p>\n\n\n\n High risk customers.<\/p>\n\n\n\n Card schemes pitch B2B as an untapped market 3x the size of consumer card spend, but it’s a false promise.<\/p>\n\n\n\n Look at this.<\/p>\n\n\n\n We don’t buy it.<\/p>\n\n\n\n Surely the duopolies know it’s nonsense.<\/p>\n\n\n\n Especially when they start adding absurd hurdles <\/a>because they get butthurt when the industry finds ways to avoid complying with their capricious guidelines<\/a>. <\/p>\n\n\n\n There has been massive growth in PIX and UPI, the default payment methods in Brazil and India respectively, but despite the fact that those programs are infinitely better for their economies than card payments they were mandated by their governments.<\/p>\n\n\n\n FedNow and RTP are voluntary<\/em> programs.<\/p>\n\n\n\n And as we’ve said before, banks make so. much. f*cking. money on their card programs they have no incentive to enable other payment modalities.<\/p>\n\n\n\n But there’s a new kid on the block that the banks can’t prevent: stablecoins.<\/p>\n\n\n\n See, the problem with lacking curiosity and avoiding innovation is that eventually<\/em> a paradigm change happens and you’re caught totally flat-footed.<\/p>\n\n\n\n This becomes a Black Swan event and wipes out your business.<\/p>\n\n\n\n Down go the moats.<\/p>\n\n\n\n Up rise people that are working to improve things.<\/p>\n\n\n\n Interchange improves NOTHING but the income statements of the incumbent oligopoly.<\/p>\n\n\n\n It’s a massive tax on the US economy.<\/p>\n\n\n\n Stablecoins represent – in our view – a modern, instant, and cheaper way to move money.<\/p>\n\n\n\n See the blow table that stacks Stablecoins against conventional, non-card B2B payment modalities, courtesy of AI.<\/p>\n\n\n\n We highlighted the biggest barrier to instant, cheap B2B payments with existing infrastructure: bank participation.<\/p>\n\n\n\n Asking banks to participate in a program that is “against” their financial interests (from the banks’ perspective, at least) was never going to work, no matter how much better it was for their customers and the economy at large.<\/p>\n\n\n\n Companies generally aren’t charities, so we don’t blame banks for optimizing for their own financial outcomes.<\/p>\n\n\n\n But it’s what Blockbuster did.<\/p>\n\n\n\n And Polaroid.<\/p>\n\n\n\n And a long list of other companies that refused to invest in R&D and adapt with market changes.<\/p>\n\n\n\n Here’s where it gets SUPER interesting though.<\/p>\n\n\n\n You can earn yield on stablecoins, meaning if I take money out of my bank account and park it in a stablecoin account, I can make 4%.<\/p>\n\n\n\n Banks argue that this increases the likelihood of a massive run on bank liquidity, as customers pull funds and park them in stablecoins.<\/p>\n\n\n\n Eh, maybe? <\/p>\n\n\n\n Interest rates will keep falling, taking wind out of this argument.<\/p>\n\n\n\nThese businesses do not want to piss away 30% of their EBITDA so Visa and Mastercard can remain duopolies.<\/h4>\n\n\n\n
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<\/figure>\n\n\n\nReality check: maybe the reason non-card tender is so high in B2B is because the cost of card makes near zero financial sense?<\/h4>\n\n\n\n
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