Chamath Palihapitiya: Visa and MasterCard biggest business losers for 2022

In the episode “Everything in a podcast”Released on Wednesday, billionaire investor and former Facebook CEO Chamath Palihapitiya expressed some very bold views and predictions about Visa and MasterCard payment companies. In essence, Palihapitiya predicts the decline of both companies during 2022 due to competition from payment projects based on Web3 and crypto.

“My biggest business losers for 2022 are Visa and MasterCard and traditional payrolls and the whole ecosystem around them.” The long-standing payment systems used around the world are “a completely fictional duopoly that doesn’t have to exist,” Palihapitiya said.

Be short of this company, and long of Web3

Palihapitiya, who runs the venture capital fund Social Capital, also shared what he believes is the “most profitable spread trade” in his 2022 life.

“Be short of those companies and anyone basically living off this 2 or 3 percent transaction tax, and be well thought out for a long time, Web3 crypto projects that rebuild your payment infrastructure in a completely decentralized way,” Palihapitiya said.

“If you read the white papers of these crypto projects and systematically compile a framework, I think you can be long and you can be short Visa / MasterCard, because I think this is their biggest market capitalization,” he added.

However, Palihapitiya also predicted that, at the same time, “many of these fake crypto projects will go to zero”.

Amazon’s decision last month yes ban the use of Visa credit cards in the UK, due to high transaction fees, lays the groundwork for Palihapity’s opinion on the fate of the two payment processors.

Adoption will begin in developing countries

“The canary in the coal mine is quite significant here. Amazon won’t do something like that, in my opinion, unless it’s a test of what I can do around the world. Today there is really no need for all these small businesses to sit on top of Visa, MasterCard and AmEx rails. That is unnecessary, ”Palihapitiya said.

Adoption of a new payment technology based on web3 will begin, in Palihapity’s opinion, in developing countries. “That’s why I think focusing on markets like Nigeria is much more exciting for me than talking about these fading Western European countries. This is where these things will happen, ”he said.

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