How Mass Adoption Occurs

Marcus has a Delta SkyMiles Amex. He puts everything on it — groceries, gas, the occasional Chipotle. He gets his miles. He pays it off every month. The system works fine for him. What he doesn't think about: every merchant he shops at paid 2–3% of his transaction to Visa, Amex, and the banks in between. That cost is built into every price he paid.

If you pay your credit card in full every month and hold a premium rewards card, the current system works in your favor. You get miles, cashback, and purchase protection. The merchant swallows the fee, or buries it in prices.

The rewards aren't free. They're funded by a cross-subsidy built into every transaction. Merchants pay interchange fees of 2–3% in the United States, the highest of any developed country by far. They pass those costs back through higher prices for everyone. The Federal Reserve Bank of Boston quantified the transfer: each cash-using household pays $149 per year to card-using households. Each card-using household receives $1,133 per year from cash users.^[1] The transfer runs from low-income to high-income. Lowest earners net pay; highest earners net receive.

The people who benefit most are those who hold premium cards and pay them off every month. The people who fund those rewards include everyone who doesn't: cash users, debit users, people who carry balances, and anyone without a rewards card. It's embedded invisibly in the price of everything they buy.

Merchants have known this for decades and have been fighting it. In 2005, retailers filed a class-action antitrust lawsuit against Visa and Mastercard, alleging that their fee structures and "honor all cards" rules were anti-competitive. Twenty years later, a proposed settlement was announced in November 2025.^[2] The terms: merchants can now reject premium rewards cards by tier, and can surcharge customers up to 3% for credit card use. The interchange rate cut: 0.1 percentage points for five years. After two decades of litigation, the networks agreed to move from roughly 2.0% to roughly 1.9%. The court had not yet approved the settlement as of early 2026, and the National Retail Federation called it "window dressing and no substance."

Flexa doesn't beat credit cards on float, rewards, or purchase protection. What it does is change who captures the fee savings, and what merchants choose to do with them.

This dynamic is almost entirely American. The EU caps consumer card interchange at 0.3%.^[3] Australia at 0.5%.^[4] Canada at 1.5%.^[5] In those markets, there's no cashback arms race. There's no economic basis for one. The rewards ecosystem that makes US cards so sticky doesn't exist at the same scale anywhere else. The incumbent advantage Flexa has to work around here is largely absent in most of the world. The merchant economics for cheaper payment rails are already compelling in Europe without offering a 10% discount to compete with miles. The US is where the transition is hardest, and where cracking it matters most.

One Thursday morning, Marcus gets a push notification from his bank: "Save 10% at Sheetz today when you pay with [Bank] Pay. Offer valid 3–7 PM." He stops at Sheetz on the way home. Grabs snacks and a drink — $38. He pays with the bank app. His receipt shows $34.20. He doesn't think much about it. Just a good deal.

When Marcus saved $3.80, something happened in the background he never saw: Sheetz processed his payment through Flexa at a 1% fee,^[6] not the 2–3% they'd pay Visa. The bank handled the crypto settlement. Nobody asked Marcus if he wanted to pay with crypto. Nobody needed to.

Marcus never downloaded a crypto wallet. He didn't need to. The bank app he's had for six years handled everything. He tapped pay, held his phone to the reader, and walked out. The only thing new was the price.

This is by design. Danny McCabe, Flexa cofounder and former CEO, on the vision: "I want a 99-year-old plus to be able to use this seamlessly and not even know they're using crypto in the background. And that's built."^[8]

Flexa is built to run inside apps people already have: a bank's mobile app, a retailer's checkout flow, a merchant mini-app. The consumer opens an app they trust, taps pay, saves money. The crypto settlement happens underneath. Invisible.

The vision Flexa has articulated since day one: any app, any wallet, any merchant. When your bank app is the wallet, the last behavioral barrier for mainstream consumers disappears. No new app to download. No new account to create. Just a different button at checkout that saves you money.

Marcus had some Dogecoin sitting in an app from 2021. He'd forgotten about it mostly. Then he walked past a coffee shop with a sign in the window: "Pay with crypto, get 15% off." He figured he'd finally use it for something. He paid. $6.40 for a latte. Felt good. Three months later, his accountant flagged it. "You disposed of a capital asset," she said. "I need the cost basis on that Dogecoin." Marcus looked at her. "For the coffee."

Under current US law, paying with cryptocurrency is a taxable disposal of property, regardless of the amount, regardless of whether the gain is $0.12. You must record the cost basis, calculate the gain or loss, and report it. Per transaction.

The Virtual Currency Tax Fairness Act (HR 5982)^[9] proposes a de minimis exemption: small transactions below a threshold would not trigger a taxable event. McCabe has called tax reform "the most important thing" for real-world adoption, alongside the GENIUS Act.^[10] The GENIUS Act was signed July 18, 2025. Tax reform is the next piece. Until it passes, this is the ceiling on direct crypto spending at scale. Bank app integration sidesteps the problem architecturally, because the bank holds the asset, not the customer. For anyone spending crypto they personally own, the friction is real. When tax reform passes, that ceiling lifts completely.

Marcus still uses his Delta card for flights, hotels, anything over $500. The float matters there. The rewards add up on big purchases. But Sheetz, Chipotle, Ulta — the Tuesday errands — he checks the bank app first now. If there's a deal, he takes it. If there isn't, he swipes the card. It's not a conversion. It's just math.

The credit card float argument — spend now and pay in 30 days — matters on a $2,000 laptop. On a $40 convenience store run, deferring that payment for a month is worth almost nothing. Flexa's discount economics fit high-frequency, moderate-ticket purchases: gas station in-store, fast food, convenience stores, groceries, everyday retail.

For the purchases where float matters, the answer eventually lies with banks. A bank that integrates Flexa's payment rail can extend unsecured credit on top of it, same underwriting they do today but routed through Flexa at 1% instead of Visa at 2.5%. Marcus gets his 30-day float and his 10% discount at the same time. The bank's interest income on revolving balances is identical regardless of the rail. What changes is their cost structure: they're no longer funding a rewards program, because the merchant is funding the discount instead. The spread they were paying to Visa stays in-house.

Whether major banks move first is another question. Their Visa and Mastercard contracts create real friction. The more likely first movers are neobanks and fintechs with no legacy rail obligations. Once one player demonstrates retention and acquisition gains with a "Pay & Save Later" product, the incumbents follow. It's the same pattern as Zelle: banks didn't want to build P2P payments, Venmo forced their hand, then they all moved.

The following January, Marcus's accountant called again. "That de minimis bill passed. Transactions under the threshold — no reporting required." Marcus thought about the coffee. Then he pulled out his phone and checked if that shop was still running the promo. That's the whole thing.

Flexa has been in rooms with enterprise merchants since 2018. For most of that time the answer wasn't no. It was not yet. No regulatory framework. No legal clarity. No certainty the space was safe to operate in.

That's changed. In July 2025, the GENIUS Act was signed — the first major federal framework for stablecoins and digital payments.^[10] The merchant waitlist grew into the thousands.

Then in March 2026, the SEC and CFTC issued a joint interpretation clarifying how federal securities laws apply to crypto assets.^[11] The headline: most crypto assets are not securities. Payment stablecoins operating under the GENIUS Act are explicitly exempt. Token taxonomy established. "After more than a decade of uncertainty," SEC Chairman Paul Atkins said, "this interpretation will provide market participants with a clear understanding of how the Commission treats crypto assets." The legal fog that kept cautious institutions on the sidelines thinned considerably.

Two pieces remain. The Clarity Act — bipartisan market structure legislation moving through Congress — would lock in a permanent framework for digital commodities and payment tokens. The de minimis tax exemption would remove the per-transaction reporting burden that still makes direct crypto spending at scale operationally impossible. Together, those two are the holy grail. Clarity gives institutions the permanent rulebook. De minimis removes the last friction point for consumers spending crypto they personally own.

If both pass, the path clears completely. If only one does, the environment is still fundamentally different from where it was three years ago. The SEC clarification alone has already moved the line. The rest is a matter of when, not if. At least, that's this author's view.