Jack Mallers Says Bitcoin Can Break Visa and Mastercard’s Merchant Fee Grip

Jack Mallers is coming for the payment rails with both hands, arguing that banks and card networks are squeezing merchants with hidden fees while selling consumer rewards as if they’re free candy. Jack Mallers Say Big Banks Are Holding Merchants Hostage, And Bitcoin Is the Way Out

• Merchant fees: Mallers says card networks charge roughly 3% to 5%.
• Rewards games: Cashback, points, and lounge perks are funded by merchants.
• Bitcoin payments: He wants BTC used for settlement, not just price speculation.
• Bitcoin vs gold: Bitcoin moves globally at speed; gold mostly just sits there.
• Big conviction: Twenty One Capital reportedly holds 43,514 BTC worth about $3.3 billion.

Speaking at the Bitcoin 2026 Conference, the Twenty One Capital CEO said the current card-based system is fundamentally tilted against merchants. In plain English: when a customer taps or swipes a card, the business pays a fee to the banks, card network, and payment processors behind the scenes. That cost is often baked into prices, squeezed out of margins, or both. The consumer sees the reward points. The merchant sees the bill. Cute system, if you’re the middleman.

Mallers did not bother with soft language.

“These card networks have all of us right where they want us.”

“They’re effectively holding merchants hostage and bribing the person at checkout to use their option instead of Bitcoin.”

That’s the core of his argument: banks and card networks use merchant fees to fund cashback, airline miles, and perks like airport lounge access. Consumers love the rewards because they feel like they’re getting one over on the system. Merchants, meanwhile, are the ones actually financing the party.

Mallers said those fees can run around 3% to 5%, which is enough to sting badly if you’re a small shop, restaurant, or local business operating on thin margins. A big retailer can absorb some of that pain better than a neighborhood café. For a small merchant, every basis point matters. When the payment stack takes a cut before the business even touches the money, the whole setup starts looking less like convenience and more like a toll booth with branding.

He also pointed to the structural lock-in behind the current system.

“I don’t have access to the Visa rails. I don’t have access to the Mastercard rails. They’re abusing these merchants and treating them unfairly.”

“Rails” is finance jargon for the underlying payment network — the infrastructure that moves money from buyer to seller. Mallers’ complaint is that the biggest rails are closed, centralized, and controlled by a handful of gatekeepers. If you want to operate inside that system, you play by their rules and pay their tolls. If you want to build something open, you’re stuck asking permission from the same companies that profit from keeping the old model intact.

Why Bitcoin enters the fight

Mallers wants Bitcoin to be more than a speculative asset or a corporate treasury trophy. He wants it to function as a real payment and settlement network that entrepreneurs and consumers can use without depending on Visa, Mastercard, or the broader card cartel circus.

“My passion for using Bitcoin as payments is actually to dematerialize the chokehold that card networks and centralized entities have on our ability to facilitate settlement.”

Settlement is the final step in a payment: the point at which the value transfer is actually completed and the books are closed. That matters because a lot of the payment industry is built around layers of promises, intermediaries, reversals, and delayed finality. Bitcoin’s pitch is simpler: one open network, fixed rules, and global transfer without needing a bank’s blessing.

That does not mean Bitcoin payments are magically ready to replace every card transaction at the grocery store tomorrow morning. Real-world checkout use still faces friction: volatility, tax treatment, wallet UX, merchant integration, and the fact that people are creatures of habit. Card networks are bloated and extractive, yes, but they are also deeply embedded and stupidly convenient. That’s the annoying part. Bad systems survive a long time when they’re easy.

Still, Mallers’ point lands because the current model has an obvious sleight of hand. Consumers are “rewarded” for using cards, but those rewards are typically funded through merchant fees. Nothing is free. It is not a magic money machine. It is a cost transfer dressed up as a perk.

That’s why this debate keeps coming back. Bitcoin advocates see an open network that could reduce fees, improve settlement, and give merchants a cleaner way to accept payments. The legacy payment industry sees a lucrative machine that already works and doesn’t care much whether the merchant likes it.

Bitcoin vs. gold: the digital hard-money argument

Mallers also revived one of Bitcoin’s favorite comparisons: Bitcoin versus gold. Gold has centuries of history as a store of value, and nobody serious denies that. It is scarce, durable, and widely trusted. But it is also clunky, slow to move, and inconvenient in a digital economy where money is supposed to travel at internet speed.

Bitcoin’s fixed supply of 21 million coins gives it the scarcity angle. Its network gives it the mobility angle. That combination is what makes Bitcoin more than “digital gold” in the narrow sense. Mallers’ argument is that Bitcoin is not just a better asset to hold — it is a better payment network than gold could ever be.

He also made the familiar observation that people spend dollars because dollars lose value over time, while they hold Bitcoin because they expect it to appreciate. That’s a blunt way of describing inflation’s quiet tax on cash. If your money is melting, you spend it faster. If your money is designed to be scarce, you save it.

Bitcoin’s thesis has always been built around that tension: use bad money for spending, save in hard money for the future. Whether that dynamic plays out at scale is still the open question. But the logic is hard to dismiss.

Twenty One Capital’s Bitcoin conviction

Mallers’ talk is not coming from nowhere. Twenty One Capital reportedly holds 43,514 BTC, worth about $3.3 billion at the time referenced. That is not the kind of balance sheet position you take because you’re feeling whimsical on a Tuesday.

Large institutional Bitcoin holdings matter because they show conviction, not just commentary. Plenty of firms are happy to talk about Bitcoin when the chart is green. Fewer are willing to put billions of dollars into it and make the bet real. Twenty One Capital’s stash suggests Mallers is not merely selling a philosophy. He is backing it with capital.

Bitcoin was trading near $77,219 when the figures were referenced, which is a reminder that price chatter always sits in the background, even when the bigger issue is monetary infrastructure. Traders want the next candle. Builders want the next rail. Users mostly want lower fees, better privacy, and fewer middlemen taking a bite out of every transaction.

The uncomfortable truth for both sides

To be fair, the card system’s dominance is not purely a conspiracy of evil suits twirling mustaches in a boardroom. Consumers genuinely like cashback, points, and perks. Businesses also like the conversion lift and customer familiarity that cards bring. The system works because everyone has been trained to accept its costs as normal.

That said, “normal” is not the same thing as fair.

Mallers is right to push back on the idea that rewards are some kind of free-market miracle. They are funded somewhere, and that somewhere is often the merchant. When the merchant pays more, the customer ultimately tends to pay more too. The costs do not vanish. They get distributed through the economy like bad gossip.

The bigger challenge for Bitcoin is that winning the argument is not the same as winning the checkout screen. Bitcoin may be the cleaner settlement layer and the stronger long-term monetary asset, but cards still dominate because they’re easy, familiar, and deeply integrated into commerce. Bitcoin payment adoption will likely grow first where the pain of card fees is highest, or where censorship resistance and self-custody matter more than convenience. That’s a real path forward, just not a cinematic one.

Stablecoins, Lightning-style payment tools, and other crypto payment systems may also end up doing some of the heavy lifting in daily commerce. The future is probably messier than a pure “Bitcoin replaces Visa” slogan. But that doesn’t make the critique any less sharp. It just means the transition will be ugly, gradual, and fought over by a lot of very annoyed incumbents.

• What problem is Jack Mallers calling out?
  He says banks and card networks charge merchants excessive fees and use rewards to keep consumers locked into their system.
• Why does he say the system is unfair?
  Because merchants pay the cost of processing and rewards while consumers mostly see the perks, not the hidden bill.
• Why does Mallers prefer Bitcoin over gold?
  Bitcoin can move quickly and cheaply across the globe, while gold is physically cumbersome and slow to use as payment infrastructure.
• Why don’t more people spend Bitcoin every day?
  Because Bitcoin is still volatile, tax treatment can be messy, and card payments are easier for most people right now.
• What does Twenty One Capital’s Bitcoin stash signal?
  It shows serious institutional conviction. Holding 43,514 BTC worth roughly $3.3 billion is a real balance-sheet bet on Bitcoin.
• Are card rewards actually free?
  No. Mallers’ point is that merchant fees help fund cashback, miles, and perks, which means the cost gets paid indirectly.
• Is Bitcoin already replacing Visa and Mastercard?
  Not yet. Bitcoin has the thesis, but the old rails still dominate everyday spending.

Mallers’ message is simple: the current payments system extracts value from merchants, hides the cost inside consumer perks, and keeps settlement locked behind centralized gates. Bitcoin offers a cleaner alternative — open, scarce, borderless, and built to move value without asking permission. That alone does not make it a finished replacement for card networks. But it does make the legacy model look a lot more fragile than it pretends to be.