Written by: Will A Wang
By the end of 2024 or early 2025, the term 'PayFi' quietly appeared in the context of the crypto community.
Initially, it was seen as a narrative packaging of the Solana community—Crypto payments combined with liquidity and interest rate models, as if it was DeFi with a new name. But as a batch of builders who have long been engaged in payments joined the discussion, this seemingly old concept was gradually endowed with a more realistic and infrastructure-oriented meaning.
PayFi is no longer ‘the story of issuing tokens for the sake of issuing tokens,’ but a reconstruction of traditional payments in the Web3 world through blockchain.
This open mic invited practitioners and thinkers from the front lines of PayFi, including:
• Will (@Will_7th): Web3 lawyer, involved in multiple payment project constructions, focusing on stablecoins, payments, tokenization, and RWA.
• Kay (@portal_kay): Web3 product manager, has previously worked on GameFi and BTC ecosystem projects; recognizes the application value of stablecoin payments and looks forward to creating products that can be truly implemented.
• Claudio (@Clllau_dio): Co-founder of KODO, previously worked in international payments at ByteDance, focusing on the fintech industry, dedicated to building the enterprise-level digital cross-border payment platform for the next decade.
• Sky (@skyhan_eth): Co-founder of ROZO, deeply engaged in the native crypto acquiring field, previously worked at American Express responsible for connecting with issuing banks, and started building easy-to-use, low-friction acquiring products after experiencing a terrible Bitcoin payment experience in Tokyo in 2019.
Four seasoned crypto payment practitioners and researchers engaged in a nearly three-hour in-depth discussion around four major themes: 'What is PayFi', 'The layout of the giants', 'The future of Crypto payments', and 'The cooperation model of payment alliances'.
1. What is PayFi?
The new species of on-chain payments seen by four frontline builders.
‘PayFi is not a rehashed financial term; it represents a form of payment + finance integration that originates from on-chain. In this open mic discussion, several industry builders expressed similar views—PayFi may be the closest innovation of financial infrastructure that is 'landed' in the Web3 world.
Sky: The on-chain credit revolution coming from supply chain finance.
Sky was the first to speak, reviewing the origin of the PayFi concept while deconstructing both the technology and the scene.
‘The concept of PayFi, although proposed in recent years by Solana's Lily, actually has its prototype from a long time ago,’ she pointed out. The earliest form of PayFi can be traced back to traditional supply chain finance: pay first, settle later, which is essentially a financial structure of time and credit.
She divided payment scenarios into two major categories: C-end consumer payments (to Consumer) and B-end corporate payments (Business to Professional). Currently, the more active projects in the market are mainly concentrated in B-end, such as supply chain financial platforms providing funding and settlement pools to enterprises. However, Sky believes that the real space for imagination is actually in the C-end.
‘Credit cards are the most successful C-end PayFi example; they existed before the internet and are the greatest financial innovation since World War II,’ Sky lamented. Today, there hasn’t been a truly 'crypto credit card' product on-chain, but this actually indicates a massive opportunity. As long as a similar credit system can be reconstructed on-chain, users can achieve a 'consume now, pay later' experience without needing bank accounts or government IDs, and establish a Crypto-native merchant network. This is the truly viable model to challenge Visa.
Claudio: Making 'financial services' pluggable open components.
‘When many people mention PayFi, their first reaction is payment channels,’ Claudio went straight to the point at the opening, ‘but if PayFi is merely a different settlement method, it can only be called Web3 payments at best, not PayFi.’
In his view, **the most important innovation of PayFi lies in 'making the roles, capabilities, and profit logic in the traditional financial service chain more efficient through the global liquidity of blockchain.'** Turning it into modular components that can be assembled and plugged in.
Claudio used his real business as an example: his team has long served traditional enterprises, especially Chinese companies going abroad. The biggest problem they face in cross-border transactions is not the payment interface, but rather low capital turnover efficiency, high financing thresholds, and intense pressure on funding. Traditional financial institutions offer limited support to small and medium-sized enterprises, while the openness of blockchain and stablecoins can provide yield-bearing capital pools in a more flexible way, breaking the deadlock between funding and receivables.
Kay: The 'PayFi' in the eyes of retail investors is actually 'Web3 payments'.
Unlike the technical perspectives of Sky and Claudio, Kay provided another definition of PayFi from a 'retail perspective'.
‘Fi in the industry's eyes stands for Finance, but in retail investors' eyes, it is actually a 'label' for Web3,’ Kay pointed out. This semantic difference has indeed led to a kind of 'misunderstanding-based popularity'—as long as a project uses blockchain technology and is related to payments, users can call it 'PayFi'.
She made an analogy: ‘Just like GameFi and SocialFi, Fi has become a categorical label rather than specifically referring to 'finance'.’ This also leads to PayFi often becoming vague in the community: it can be a payment tool, a capital pool, or even a product masquerading as a payment service to issue tokens.
Kay also pointed out that many teams in the Web3 payment field are doing real B-end business, but due to lengthy product chains and unengaging narratives, they seldom spark widespread discussion in communities. Instead, some projects that are closer to 'pre-heating + speculation' have gained considerable attention.
‘So I particularly hope that the topic of PayFi can connect more 'truly grounded' teams with 'users who truly care about payments,’ she said. ‘If there is no consensus, PayFi might become the next concept to be misrepresented.’
Will: PayFi is the blockchain 'financial Lego' that disassembles Alipay.
‘Many people want to find tradable coins and focus on PayFi. But most real PayFi projects cannot issue tokens,’ Will said cheerfully, yet hitting upon a pain point in the industry.
He further pointed out that those PayFi projects packaged around the hype of Solana often have underlying structures of on-chain capital pools + interest rate models, speculating on 'the time value of money', which essentially are financial businesses dressed in the facade of payments. Although this 'concept packaging' is not pure enough, it has also driven the explosion of the PayFi ecosystem.
But in Will's eyes, the true value of PayFi lies not in speculation, but in 'deconstruction'.
‘If Alipay is a closed large platform, then PayFi is like dismantling each financial service module of Alipay into Lego blocks and opening it up. Any developer can build their own blockchain Alipay.’
He believes the most explosive scenarios for PayFi are those users who have no traditional bank accounts but have stable internet connections—namely, residents of small countries in Asia, Africa, and Latin America, Web3 natives, AI agents, and other atypical users.
‘These people don’t need banks; they just need a wallet. As long as they can receive money, spend money, borrow money, and repay money, PayFi is their bank,’ Will emphasized. The C-end is the ultimate goal of PayFi and the logic of valuation. ‘As long as the project party can grasp user financial behaviors, they have credit and can provide corresponding lending, payment, wealth management, and other financial services. This story is too compelling, not to do it would be a disservice to oneself.’
This is the real PayFi as seen by four builders: not a speculative term, but a system-level transformation decoupled from traditional finance and reconstructed on-chain. Each person sees different facets, but they all point to the same future—a world where banks are unnecessary, but everyone can 'have a bank'.
2. When internet giants begin to 'invade' PayFi, are entrepreneurs besieged or 'carried'?
When names like Stripe, Visa, OKX, and Coinbase repeatedly appear in news headlines related to PayFi, many entrepreneurs' first reaction is—immense pressure.
‘Every time I see new moves from CeFi (traditional finance), I feel like my survival cycle has shrunk a bit more,’ Claudio said with a wry smile. But then he shifted gears: ‘However, their frequent actions precisely indicate that they are also in a state of panic.’
This discussion on 'giants entering the scene, and opportunities for entrepreneurs' became the most intense and authentic part of the open mic.
Stripe, Visa, Coinbase: What exactly are they competing for?
Sky pointed out straightforwardly that Stripe and Visa's 'open card issuing' move directly impacts the intermediary model. ‘A friend who does U cards overseas shut down their U card product the day after the news broke,’ this statement left the audience speechless.
Originally products like U cards, which acted as 'intermediaries', provided users with crypto consumption outlets by connecting with issuers like Visa and Mastercard. But when Visa and Stripe directly opened up card issuing permissions, the value chain of these intermediaries was instantly cut off.
At the same time, the rise of stablecoins is quietly weakening the role of traditional banks. ‘Now stablecoins are banks, just with money stored on-chain,’ Sky stated directly. Visa and Mastercard control the merchant network, which is their last fortress. But whether they will be bypassed has already become an obvious trend.
Kay added from the C-end perspective: ‘OKX's recent OKX Pay, although labeled as C-end payment, is actually made like a social product in the first version with P2P transfers and friend groups, and it doesn’t resemble what payment should be.’ He sharply pointed out that payment is essentially a consumer behavior and cannot be separated from real scenarios. Simply relying on mutual transfers between wallets cannot support a C-end payment ecosystem.
Rather, it was the X402 protocol launched by Coinbase that caught Kay's attention. ‘It designed a set of on-chain micro-payment protocols for AI agents, elegant, simple, and practical,’ Kay commented. This B2B, machine-level calling scenario precisely hits the core advantage of on-chain payments—extremely low-friction cross-border micro-payments.
How can entrepreneurs 'compete at a distance' with giants?
‘If you can't beat them, join them,’ Claudio said half-jokingly. But he immediately added, ‘What we infrastructure-startup companies can do is to achieve results in our own niche as soon as possible. Whether it's acquisition or cooperation in the future, securing a foothold is the only way out.’
He cited Stripe as an example: Stripe is incredibly powerful in the global payment market, but it has never been a 'lone warrior'; instead, it builds its global network step by step by constantly integrating regional payment solutions. ‘No local payment company can defeat Stripe, but Stripe cannot do without local partners,’ Claudio said.
Sky believes that the real opportunity for startups lies in parts that 'giants are unwilling or not good at doing'. ‘Visa and Stripe excel at connecting merchants and consumers, but they are reluctant to deal with on-chain funding, credit, and interest rate models.’
These are the aspects entrepreneurs can focus on breaking through.’ She specifically mentioned the concept of 'on-chain credit cards'. ‘The current U cards are just prepaid cards and not true credit cards. If credit can be given to users based on on-chain credit data, even if the limit is not high, it would be a highly disruptive product.’
Giants are the 'capital moat', while PayFi aims to create a 'liquidity moat'.
Will provided his judgment from a more fundamental logic.
‘Giants like Visa, Mastercard, and Stripe essentially rely on network effects built on capital,’ he said, ‘but if PayFi can truly work, its moat won't be capital, but liquidity.’
He explained that on-chain capital pools, lending, and funding are all issues of 'money liquidity'. As long as an efficient and transparent liquidity network can be built on-chain, users, merchants, and developers will naturally gravitate here instead of passively relying on Visa's 'brand credit'.
‘Giants will continue to roll out KYC-based card issuing and chain-off consumption records, but on-chain is a new arena,’ Will said firmly, ‘PayFi should not compete for the same territory as them, but rather eat into their core value from the new track of 'on-chain liquidity'.
Sky also added: ‘In the past few years, the hardest part of doing payments wasn’t securing users, but rather getting the 'last mile' liquidity right. PayFi makes the flow of funds simple and transparent, and that's what the giants are truly afraid of.’
This round of discussion on 'giants entering PayFi' ultimately reached a consensus:
• Giants will continue to strengthen their moats in 'entry-level' capabilities such as merchant networks, issuing, and payment channels.
• Opportunities for entrepreneurs and the PayFi ecosystem lie in reconstructing underlying liquidity, decentralizing credit, and the explosion of new scenarios like machine economy and micropayments.
Giants focus on the 'surface' of payments, while what PayFi wants is the 'substance' of payments. Claudio's last sentence is thought-provoking: 'We are not competing with giants; we are after a market they cannot see or are pretending not to see.'
3. Will Crypto payments really become 'universally popular'?
The virtual and real aspects of Mass Adoption.
‘Mass Adoption’ is almost the vision that all Crypto practitioners love to mention. But what really counts as true Adoption? Is it the heat of crypto enthusiasts tweeting? Is it the waves of FOMO from Memecoins? Or is it the day you buy coffee on the street with USDC?
During this open mic, several guests engaged in a rare 'pragmatic' discussion around 'Mass Adoption of Crypto payments'.
Claudio: Don't mythologize stablecoins; they are just an 'upgraded version' of cross-border payments.
‘I believe in Mass Adoption, but it depends on how you define it,’ Claudio's viewpoint is consistently pragmatic.
In his view, the advantages of stablecoins in enterprise cross-border payments are already indisputable:
• Cost reduction, speed enhancement, and transparency.
• Cross-border clearing and settlement are much more efficient than the banking systems of fifty or sixty years ago.
‘But this does not mean that stablecoins will indiscriminately replace local payments,’ he emphasized. In countries like China, India, and Singapore, local payment systems have long been mature and efficient, ‘countries like Mexico, which is a developing country, have no motivation to use stablecoins; local payments are sufficient.’
He judged that only in countries where financial infrastructure is extremely weak do stablecoins have structural opportunities. Even so, the choice of blockchain is not guaranteed. ‘Centralized solutions like digital RMB are not necessarily worse than blockchain,’ Claudio summarized: ‘Stablecoins will be part of the payment system, but will never be the only endgame. The future will definitely be a pattern of coexistence of various currencies and forms.’
Sky: Look quantitatively at scale and qualitatively at penetration; don’t be fooled by the 'fake adoption' in the crypto space.
‘Mass Adoption of Crypto payments requires both quantitative and qualitative measures,’ Sky proposed a set of 'hard indicators':
• Quantitatively, it must reach a stablecoin market cap of at least one trillion US dollars, close to the size of the US dollar M0, to be considered true Adoption; currently, the size of stablecoins is in the hundreds of billions.
• Qualitatively, it refers to the real penetration in a region; for example, in a place like Argentina, if you ask ten people on the street, at least two or three are using stablecoins, then that’s called Adoption.
The key to promoting Adoption lies in two major pain points:
• Friction of payment methods. In markets dominated by credit cards like the US and South America, small payment fees can be as high as 10%, indicating significant pain points.
• The reality of currency depreciation. In high-inflation countries like Argentina and Turkey, the real demand for cash and stablecoins far exceeds discussions of 'payment innovation'.
‘You don’t need to educate users; life will force them to use it,’ Sky bluntly stated.
But she also reminded that the openness of policies (such as currency competition after Mile's rise in Argentina) and the Web3 access cost for merchants are the final push for Mass Adoption.
Kay: Top-down and bottom-up, there are two paths to Mass Adoption.
Kay approached the topic of Mass Adoption from the perspective of 'path theory'.
He summarized it into two models:
• Top-down: government promotion, upgrading within the system.
• Bottom-up: users vote with their feet, spontaneous adoption by the public.
Taking Singapore as an example, the government launched an identity + payment system called 'SingPass', which also uses blockchain technology.
Although functionally strong, Kay pointed out that this model heavily relies on local identity systems, and tourists or foreign users don't even have access.
‘This top-down model can bring rapid adoption, but its dividends will not be shared with users,’ Kay believes that systems lacking endogenous incentives and flywheel effects are destined to be 'tools of the government'. In contrast, countries like Argentina and Turkey have more vitality in bottom-up adoption. With fiat currency devaluation and credit bankruptcy, users will seek stablecoins as value anchors. He shared a real case of a restaurant worker in Turkey who 'exchanges for dollars or USDT the moment they get paid'.
‘The Mass Adoption of Crypto payments will ultimately be a combination of these two pathways,’ Kay summarized, ‘but the path that can continuously snowball and truly benefit users is still the bottom-up one.’
Will: The moat of Crypto payments is to move 'off-chain data' on-chain.
Will proposed his Mass Adoption formula from the perspective of 'data accumulation'.
‘The real value of Crypto payments is to turn off-chain payment behaviors into on-chain credit records,’ he believes. The traditional payment giants hold payment data and credit assessment capabilities, while the opportunity for Crypto payments lies in rebuilding data and credit through blockchain.
He gave an example of a set of incentive mechanisms designed by his team:
• As long as users engage in transactions through on-chain payments, they can earn points.
• These points can be exchanged for tokens in the future, forming a 'use + earn' flywheel.
• Whether it’s merchants, individuals, or project parties, they can all gain substantial returns from promoting adoption.
‘The biggest problem with past To B projects was that early users did not receive returns; everyone was just using tools. But if part of the profits are distributed to early users, the C-end will no longer be tool users, but ecological builders,’ Will said.
For user incentives, Sky shared a real case from the community in network countries:
• The community has less than 200 people and publishes a consumption leaderboard every week.
• Users will actively bring merchants to connect with Crypto payments to 'climb the leaderboard'.
• This self-driven 'use + earn' dynamic makes adoption effortless.
‘Giants like Visa and Stripe never share their profits with users,’ Will said with a smile, 'If Web3 can successfully implement this use + earn model, only then will the mass adoption of Crypto payments be truly meaningful.’
This discussion on Mass Adoption brought about a clear conclusion:
• It won't happen automatically. It requires the dual catalysis of payment pain points and currency demands.
• It does not rely on a single technology. Stablecoins, on-chain data, and incentive mechanisms are all necessary pieces of the puzzle.
• It is a combination of business models and ecological flywheels.
The Mass Adoption of Crypto payments is both a replacement of the old system by new technology and a reclaiming of wealth and credit power by ordinary people.
Claudio's statement became the highlight of the discussion: 'Mass Adoption is not about Crypto changing the world, but about the world having problems that Crypto can solve.'
4. Payment alliance: how to break the giants' 'moat'? A self-rescue and co-construction to decentralize.
‘The payment industry is essentially a 'cooperative track'.
In the last round of the open mic, Sky did not use the usual entrepreneurial narrative to talk about 'payment alliances', but rather bluntly defined this 'collective combat' as a life-and-death collaborative game.
She gave an example: ‘Even if Visa abandons credit cards and fiat currency settlements, with the same name, it is still Visa. The brand is its longest-term barrier.’ And how can a new generation of Web3 payment projects build their own moat under the reality that 'technology can be copied at any time, and ecosystems can be seized instantly'?
The answer is just two words: alliance.
Sky: Brands are the ultimate barrier; the alliance is the only path for small teams to become 'big names'.
‘Technology and paths will change, but the brand will solidify trust,’ Sky emphasized. The significance of the payment alliance lies not in the old narrative of 'resource integration', but in how to form a recognition in users' minds that 'Crypto payments = these brands'.
She shared the experience of ROZO in the community of network countries:
• A small physical community (less than 200 people).
• The on-chain consumption leaderboard is published weekly, and the top users will actively 'bring merchants' to connect with Crypto payments.
• A real 'use + earn' flywheel has formed between merchants and users.
‘This is not about creating hype; it’s about cultivating payment habits,’ Sky said. The role of the alliance is to replicate this 'real adoption in small scenarios' in more places so that users, merchants, and project parties can benefit from ecological growth.
‘Only when everyone works together to 'make this happen' can individual brands have a chance to become 'Visa-level' in cognitive recognition,’ Sky summarized.
Claudio: The alliance is not about huddling together for warmth, but a real need in the B-end market.
Claudio, starting from more practical B-end scenarios, provided the underlying logic of the alliance.
‘The payment industry has never been a solo business,’ he illustrated. Stripe's global strength relies on continuous cooperation and aggregation with local payment solutions. ‘No payment company can possess strong local capabilities in every corner of the world,’ he said.
He candidly stated that his team is not skilled in operations, marketing, or branding; the multi-headed market nature of PayFi naturally requires everyone to unite to voice and co-build the brand.
Claudio also mentioned that since this year, To B projects in the crypto space have begun to actively build communities and shape brands, ‘projects like Huma and BlackHorse, which originally had no need for To C, have also started to enhance their ecological influence through branding.’
This ‘dual-wheel drive of B+C’ is especially important in the payment track.
‘An alliance is a 'brand co-building body'. When users trust the alliance, corporate clients will naturally trust you,’ Claudio said.
Will: Use Web3's incentive mechanisms to turn C-end users into 'business partners'.
‘What we aim to do is not just a simple alliance, but a 'decentralized alliance' with Web3 incentive mechanisms,’ Will's expression makes the core of the alliance sound more Crypto-like.
He shared a token economy model that the team is working on:
• Engaging in on-chain payment activities will earn alliance points.
• Points can be exchanged for tokens and rights in the future.
• Whether it's payment channels, merchants, developers, or early users, they are all contributors to this 'growth of on-chain payments' and should benefit from it.
‘Traditional payment giants keep all the profits within the platform. But Crypto payments can distribute the growing value to every participant through token economies,’ Will believes this can not only incentivize C-end users but also solve the 'incentive gap' issue during early B-end project adoption.
He emphasized: ‘PayFi projects are not about issuing tokens for the sake of it, but to form a 'Net Positive' usage loop where users, merchants, and project parties can all receive real returns.’
Kay: The core of the alliance is to reduce 'trust costs'.
Kay pointed out the most essential value of the payment alliance from the perspective of user perception: ‘In fact, the alliance is a kind of 'trust agency'.
For ordinary users, Crypto payments have never been a technical issue, but rather a question of 'can I trust this payment method?'
• Trust and security.
• Trust liquidity.
• Trust won't be 'cut off' after it's used up.
The role of the alliance is to build a trust bridge between users, merchants, and project parties, sharing risks and benefits.
‘Instead of fighting alone, it’s better to collectively wave a big flag,’ Kay said, ‘Brands are the most expensive resource, and alliances are the fastest brand amplifiers.’ She also mentioned that alliances are not just about the linkage of technology and brands, but also about lowering the entry barriers for merchants and users—‘infrastructure’.
‘If a merchant wants to independently connect to Crypto payments, the learning cost, compliance risks, and user education will deter them. But if it's a standardized solution provided by the alliance, the merchant only needs to trust the 'alliance brand' to connect at low cost,’ Kay said.
In summary: the alliance is the 'weapon for the masses' against the Visa model in Web3 payments.
This round of discussions about 'payment alliances' ultimately returned to a simple logic:
• The core barrier for Visa and Stripe is 'network effects + brand trust'.
• PayFi projects struggle to compete on their own.
• The alliance is a decentralized way to rebuild the 'network effect + brand trust' as a weapon for the masses.
• Technology is sufficient; it’s a competition of 'who can make users trust you first'.
5. Finally
The significance of PayFi is not merely a rebranded DeFi, but making 'spending users' part of income for the first time. In the past, the profits of payment networks only belonged to giants like Visa and Stripe, while on-chain, every payment and usage scenario by users is a part of the network value and should share in the growth dividends. What PayFi aims to do is turn payment into a co-building game of 'the more you use, the more you earn', making the C-end not just consumers but also beneficiaries of the ecosystem.
In PayFi, spending is no longer just an expense, but a way to piece together one's own small portion of the Visa puzzle, building a 'financial Lego' that everyone can own.
