Payments: Two payment companies extended an olive branch to the cryptocurrency community this week

4/1/21 8:00PM

This week 2 payments giants made big announcements about their intentions for cryptocurrencies.

‍Visa revealed that it would allow users to use USD Coin, a cryptocurrency tied to the value of the US dollar, to settle transactions on its payment network and PayPal announced that US consumers would be able to use their cryptocurrency holdings to pay for items from millions of online merchants.

‍Cash, credit or crypto?

‍This is a fairly big deal for cryptocurrencies generally, but it's also a big moment for the legacy payment providers. Visa and PayPal are among the largest US payment firms, along with Mastercard and American Express — and all of them are trying to position themselves to best capture the increasingly digital way that we pay for... stuff.

From 2011-2019, those 4 payments companies all grew their revenue consistently, but last year the 3 largest card companies saw revenue fall, as consumers spending on credit and debit cards dried up. PayPal however grew 20%, as the facilitator of choice for millions of online, rather than physical, merchants.

Whether Visa or PayPal management seriously believe in cryptocurrencies as the future of payments, or whether these features are just a way to hedge their bets a bit, isn't clear. What is clear is that there are a lot of companies that want to take their, very sizable, lunch (these 4 companies did $85bn+ of revenue last year alone). Competition in payments is only going to intensify from here.

Max Knoblauch4h

American Airlines joins the flock, hiking bag fees amid higher jet fuel prices

American Airlines on Thursday announced that it, too, will be hiking the fees it charges customers to check luggage.

With the move, all four of the major US airlines, which together control about 80% of the US market, have now hiked their baggage fees in recent days amid surging jet fuel prices.

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Since late March, JetBlue, Delta Air Lines, United Airlines, Canada’s WestJet, and Southwest have hiked their fees. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.

American Airlines updates bag fees and Basic Economy fares

The change will go into effect on tickets bought on or after Thursday, the same day Southwest’s hike begins.

Max Knoblauch5h

Less than a year after implementing them, Southwest is also hiking its bag fees

Southwest Airlines has joined the growing list of airlines opting to hike their bag fees amid sustained higher jet fuel costs.

Starting today, the first checked bag at the carrier — which implemented bag fees less than a year ago — will jump from $35 to $45, and the second from $45 to $55. Southwest quietly disclosed the change Tuesday.

Southwest assigned the decision to “part of an ongoing analysis of the business and against the evolving global backdrop.”

As of Wednesday, jet fuel prices dropped to $4.16 a gallon, per the Argus US Jet Fuel Index, down from $4.81 on Tuesday following President Trump’s ceasefire announcement, which sent travel stocks soaring. Major airlines have shed some of those gains in premarket trading Thursday.

With the move to hike bag fees, Southwest joins JetBlue, United Airlines, Delta Air Lines, and Canada’s WestJet, all of which also boosted fees this month. Experts expect more major carriers to follow, and to potentially tweak the pricing of other ancillary revenue sources like seat assignments and carry-on luggage.