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Ep 17: What It Takes for Stablecoins to Scale at Checkout w/ Jess Houlgrave (WalletConnect)

“Turning on” stablecoin payments is easy. Getting them chosen at checkout is the hard part. The gating problem is coordination: merchants, acquirers, PSPs, wallets, and consumers all have to say yes in the same flow, even though the economic upside is not evenly distributed.

This conversation is a clear look at what actually sits behind a “crypto accepted here” sticker: merchant onboarding, transit accounts and screening, reconciliation, refund mechanics, and fiat settlement via regulated partners. It’s a reminder that checkout is less about terminals and more about compliance plumbing plus incentive design.

The core ideas

• Stablecoin cards show there is real consumer demand to spend crypto, but they don’t create merchant-side benefits because they effectively route value back through the existing card system.
• “Merchant acceptance” for stablecoins is an end-to-end system, not a toggle: wallet UX, terminal UX, compliant routing, treasury settlement, reconciliation, refunds, and off-ramps.
• On-chain introduces a structural constraint: you cannot control who sends funds to an address, so compliant designs use transit accounts and layered screening before payout.
• WalletConnect’s wedge is distribution as a cross-wallet messaging layer, then layering a payments-native SDK so “connect + sign” becomes closer to “click pay.”
• For acquirers, this needs to look like an APM decision, with familiar ops and a clear fee model, not a bespoke crypto integration.
• Incentives are the coordination mechanism: consumer cashback, wallet revenue share modeled like interchange, and merchant-funded discounts to shift behavior without recreating the full card fee stack.
• Early real-world usage may be more crypto-native than “stable-only”: in the Portugal cafe test, Jess notes a meaningful share of payments came from native assets (e.g., ETH/SOL), not just stablecoins.

What this changes

• For merchants: the value proposition is lower effective fees plus faster settlement, but the practical win depends on whether enough volume shifts to make the new rail worth enabling and promoting.
• For acquirers/PSPs: stablecoin checkout becomes a packaging problem: ship it as a standardized APM-like product with reporting, onboarding, and refund flows that fit existing systems.
• For wallet builders: distribution and UX parity become strategic assets, and wallets that adopt payments-native flows can participate in economics via on-chain interchange-like revenue share.

What we didn’t fully resolve

• Who sustainably funds incentives at scale when merchants have strong upside from lower fees, but wallets, PSPs, and acquirers still need reasons to distribute the method.
• Whether privacy expectations (especially for merchants and public companies) can be met on transparent ledgers without pushing meaningful volume onto privacy-preserving rails.
• How quickly merchant treasury behavior changes (holding stablecoins on-chain) enough to remove the off-ramp leg and unlock materially lower total costs.

If you listen, listen for this

The hidden thesis is that stablecoin checkout is a coordination game. WalletConnect’s bet is that if you collapse crypto complexity into APM-familiar operations and offer enough incentives for each participant to try it, you can create a habit loop that cards do not automatically dominate. The open question is whether there's enough of a catalyst to kick start that loop in the first place.