null
Author: Yokiiiya
In the past six months, I have transitioned from a bystander in Web3 to an insider in the payment industry. And now, I choose to stop and no longer continue with Web3 payments.
This is not a retreat after a failure, but a judgment adjustment made after truly getting involved. Over the past six months, I have visited Yiwu, Shuibei, Putian, and even Mexico, to see the liveliest places mentioned in those reports, to understand how payments are actually made. I also got involved, built an MVP for Web3 payments, managed accounts, created Web3 collection tools, and tried to run the imagined path from the first step to the last step.
But the deeper I went, the clearer I became about one thing: this is not an industry where 'doing the product well means winning.' Payment is not about functionality, but about banking relationships, licenses, capital efficiency, and the long-term ability to manage risks.
Many payment businesses that seem 'profitable' do not earn capability premiums, but rather risk premiums — they just haven't had issues yet. What truly determines how far a payment company can go has never been about how much money they made, but whether they can withstand and survive before risks become apparent.
This article is not meant to deny this industry, but to hope to remove the filters, lay bare the real structure, and leave some clearer judgments for later entrants. (A few weeks ago, I also recorded a podcast with former Kun Global VP Robert, Nayuta Capital CEO, and former Didi Finance CEO Alex, discussing the same issues.)
One, why did I enter Web3 payments?
As a serial entrepreneur, I ended a long-term entrepreneurial project last year. During the process of closing the company, I also left myself some rest time to return to a more 'cleared' position and seriously think about what direction to focus my energy on next.
Six months ago, a friend invited me to Hong Kong to explore entrepreneurship related to Web3 payments. At that time, I was not familiar with Web3 and could not claim to have any understanding of the payment industry. Just from a macro perspective, it was clearly a large enough industry that was still in an upward cycle; at the same time, there was potential for a combination of Web3 and AI.
In the previous entrepreneurial process, we engaged in cross-border business and developed platforms and software related to remote employment. In these practices, I constantly encountered the same fact: businesses can quickly go global, but the flow of funds always lags behind. Slow settlements, fragmented paths, opaque costs, uncontrollable account periods — these problems, when the scale is still small, may be bypassed with experience and patience; but once the business scales, they will not be resolved by 'management capabilities,' only amplified.
It is also against this backdrop that when I began to systematically understand the actual usage of Web3 payments at the settlement level, it did not present an abstract technical narrative, but a solution that can logically directly address these pain points: faster settlement speeds, higher transparency, and nearly around-the-clock clearing capabilities.
At that time, the judgment seemed to be a direction that could solve real problems and was Day 1 Global — I was not entering because of Web3 itself, but because in the specific scenario of payments, it seemed to provide a better structure — at least logically, it looked sufficient to leverage those long-existing but often overlooked frictions.
But looking back now, I gradually realized that, like many others, I assumed a premise that was later continually challenged by reality: as long as the settlement efficiency is high enough, payment will naturally migrate to the chain. It was even further simplified into an intuition — payment is just about facilitating transactions; as long as the process is run smoothly, cash flow can be 'handcrafted.'
Based on my lack of understanding of Web3 and the payment industry, I decided to spend three months truly entering this industry, understanding the structure, and then deciding what to do and what position to take.
Two, what payments are truly competing for has never been the product.
When I arrived in Hong Kong, the initial idea was not complicated. The initial thought was very simple: leverage some resources and relationships from friends, start with OTC or relatively simple payment scenarios, get the cash flow running first, and then judge what to do next based on real needs.
I am not here to conduct research, nor am I a long-term observer, but rather to see — is it possible to first create something that can run, then calibrate the direction in real business?
But soon, the external environment underwent a significant acceleration. In May, the U.S. passed the GENIUS Act, and the entire industry was ignited almost overnight. Capital, projects, and entrepreneurs rushed in, and Web3 payments transitioned from a relatively niche infrastructure topic to a frequently discussed 'new opportunity.' Externally, this seems favorable; but for a newly entered entrepreneurial team, this sudden buzz is not necessarily a good thing.
The more chaotic, noisy, and quickly formed consensus moments are, the easier it is to cover up the real problems. Major internet companies, financial institutions, banks, traditional Web2 payment companies, and Web3 Native teams are entering the scene one after another; everyone is talking about opportunities, but few are discussing structures. At that time, I felt it was necessary to delve into the front lines to truly understand this industry.
1. The 'buzz' in reports and what is seen on the front lines are not the same thing.
Once I really started running on the front lines, the first thing I did was not to continue optimizing the product plan, but to see: who is actually using Web3 payments? Why are they using it? Where are they using it? I first went to Yiwu, which is most often mentioned in reports.
In many studies and discussions, Yiwu is often used as a representative sample of 'Web3 payments have already scaled.' However, when I walked down, I saw a different picture. Stablecoins do exist, but more are scattered, relationship-driven, and hidden uses.
It has not become a settlement method that can be standardized and productized, as described in the report. Many transactions do not occur because of 'optimal efficiency.' Subsequently, I went to Shui Bei, Putian, and Mexico, and also learned about the penetration rates in Africa, Argentina, and other different places; the situation was no fundamentally different.
Web3 payments do not not exist, but have far from formed a stable, scalable backbone path; more often they are just a 'patch' embedded in the existing system. The real penetration rate does not match the heat we perceive in reports, communities, and discussions.
But it is also in these exchanges that I gradually shifted my perspective from 'can we create a product' to the industry structure itself. I began to realize that the incremental market for stablecoins may not be within 'the crypto circle,' but in the existing business scenarios in the Web2 world that have long been slowed down by traditional clearing and settlement systems.
This is not a narrative shift, but more like a slow financial technology upgrade. Meanwhile, problems begin to surface: if real usage is so fragmented, does the productization path stand firm?
2. When we truly began to develop applications, all issues pointed to the same place: channels.
From July to September, I continued my field research while beginning to systematically approach potential clients. Human resources companies, insurance, tourism, MCN agencies, service trade, cross-border businesses, game companies... their needs vary, but the core issues they point to are highly consistent: money should flow faster, cheaper, and more stably.
Payroll, task settlement, B2B payments — these scenarios are logically very suitable for stablecoins. Initially, we also thought that the application layer was a direction we could enter. However, a premise that cannot be avoided soon presented itself: you must have a stable, compliant, and sustainable fiat ⇄ cryptocurrency channel.
We began to connect with several service providers that looked good in the market, but from the real experience, it was hard to say which channel is 'long-term reliable.' To meet business needs, we even tried to build our own channels, but after truly starting, we realized that this is not fundamentally a product issue, but an infrastructure issue.
Banking relationships, license structures, KYB/KYC compliance, risk control capabilities, quota management, regulatory communication... the entire channel layer heavily relies on long-term accumulated credit, experience, and capital, which are not capabilities that a small internet background team can fill in the short term.
It is also here that I first truly realized: payment is not an industry where 'doing the product well means winning.'
3. You think you are making money, but you are actually eating risk premiums.
In this process, one phrase deeply resonated with me: payment is not about how much money you make, but how much you can spend. Many of the Web3 payment paths that seem to have been 'run through' are fundamentally not capability premiums, but risk premiums.
The more dangerous aspect is that many people do not know what risks they are taking, nor do they know where the risks are specifically hidden.
Is it a compliance issue with the trading partner?
Is it a mismatch in the capital pool structure?
Is it a lag in risk control rules?
Or is it a gray area of regulatory interpretation?
If the feasibility of a business is based on 'temporarily not having issues,' then it is not a structure that can be safely scaled.
4. The essence of payment is a 'flow' business.
Slowly, I began to use a simpler perspective to understand payments. The essence of payment is actually a 'flow' business. Whoever masters the waterway can make money; the greater the water flow from the faucet, the bigger the profit space. If the water flows past your door, you can take a cut — this sounds like an almost 'easy profit' business.
But precisely because of this, payment has never been a simple business. Not every company 'standing by the water' can make money. Payment companies that genuinely make long-term profits are often those with extremely strong control over water volume, pressure, backflow, pollution, and leakage.
How much water you can take depends on how much risk you can bear; how long you can let the water flow depends on your endurance under compliance, risk control, and regulatory environments. Many paths that seem to have 'large water flows' are essentially just situations where no one has come to close the gate temporarily. It is also through this process that I developed a more complex yet more genuine respect for the payment industry.
Its charm does not lie in who has made a new product, but in how it honestly tells you which industries are truly making money in the real world and which are just making a lot of noise. Standing on the waterway, you can see where real funds are flowing, not who is continuously PR-ing outside.
5. Payments are a good business, but not one that we can excel in.
Having come this far, I also had to confront a judgment that is not easy for entrepreneurs but is very important. Payment is a good business, but it is not the kind of business we can do best. This is not a denial of direction, but a respect for resource endowments.
What the payment industry truly needs is not the ability to quickly trial and error and continuously iterate products, but long-term stable banking relationships, sustainable compliance systems, mature risk control capabilities, and credit accumulated through repeated games in the regulatory environment. These capabilities are not something that can be 'achieved through effort' or filled in the short term simply by being smart. They are more like an industry-level asset, often only gradually formed in specific types of teams and specific time windows.
When I truly viewed payment as a 'flow business,' I became more aware that whether a team can stand on the waterway long-term is not about desire, but whether they have the pressure-bearing structure.
Under this premise, moving forward no longer feels like a rational investment for us, but more like using time and luck to fight against an industry structure that does not stand on our side. This problem ultimately led me to the next choice.
Three, I still have confidence in payments, but I've seen its true battlefield.
It should be noted that my choice to no longer continue with Web3 payments is not because I am bearish on this industry. Quite the contrary, over the past six months, I have become increasingly convinced that the structural opportunities in the payment industry are still very large.
However, when I began to truly break down these opportunities, I gradually realized a more brutal yet equally important thing — payment is a business with a longer time cycle, heavier structure, and higher resource requirements. Its opportunities do exist, but they are not evenly distributed under every entrepreneurial team.
1. The increment of payments is not a short-term dividend, but a long-term reconstruction.
If we broaden our perspective, cross-border payments are not a question of 'whether they can explode,' but a process of ongoing infrastructure reconstruction. The continuous overflow of global supply chains, the growth of cross-border service trade, and the accelerated collaboration of distributed teams are trends that, when combined, are amplifying the frictions in traditional clearing and settlement systems.
In this process, the value of Web3 payments is not reflected in 'being cheaper,' but in three aspects:
Significant improvement in turnover efficiency
Transparency of settlement paths
Unified settlement capabilities across currency zones and regulatory zones
This is a structural improvement, not a tactical optimization. Precisely because of this, it naturally belongs to a project scale spanning over a decade, rather than a market that can be leveraged through product sprints.
2. The real difficulty is not 'collecting money,' but the financial system within the Marketplace.
After engaging with enough real scenarios on the front lines, I became increasingly clear that the difficulty of payment has long ceased to be about 'collecting money' itself. Especially in Marketplace scenarios, payment has never been an independent component, but a complete ecological-level financial system.
Buyers, sellers, platforms, logistics, streamers, couriers, tax authorities, frozen accounts, subsidy accounts — all roles are interlinked within the same financial chain. In such a system, what truly determines the threshold is not the payment interface, but:
Custody and freezing mechanisms
Revenue sharing and account period design
Risk control and anti-fraud capabilities
Cross-regional compliance and regulatory obligations
Once these systems stabilize, they naturally have the capacity to extend to financial capabilities; however, they also place extremely high demands on the team's capital strength, risk control systems, and long-term patience.
3. Web3 payments are not a front-end revolution, but a back-end upgrade.
One thing that has become increasingly clear to me over the past six months is: the true scaling of Web3 payments will not occur on the user side.
It will not explode because users start actively using wallets, but because enterprises upgrade their back-end Treasury, reconciliation systems, cross-border settlement paths, and capital pool management methods.
In other words, the mainstream path is likely to be: the front end remains Web2, while the back end is restructured to Web3. This is a kind of 'hidden' upgrade. And this upgrade precisely means that it relies more on system stability, regulatory certainty, and long-term operational capability, rather than market education.
The real explosive point is not in the most mature markets; if viewed geographically, the increments in payments are also uneven.
The Asia-Pacific region has become a relatively mature market, while the real structural growth is more likely to occur in regions like Latin America, Africa, the Middle East, and South Asia.
The payment system is severely fragmented.
High costs and complicated paths.
Users and merchants have a stronger willingness to migrate.
But the other side of these markets is: high localization, strong regulatory differences, and strong operational requirements. What they need is not 'cleverness,' but long-term deep cultivation.
When I truly looked at these opportunities together, I had to face a clear conclusion: payment is indeed a good business, but it requires resource endowments —
Long-term stable banking relationships
Mature and sustainable compliance systems
Risk control capabilities that can withstand stress testing
Credit accumulated through repeated games in the regulatory environment
It does not fall within the current capacity boundaries of our team. This is not a denial of direction, but a respect for reality. The battlefield of payments still exists, but it is no longer under our feet. It is precisely under this judgment that I ultimately chose to stop and rethink: if I do not stand on the waterway, where else can I stand to continue participating in this ongoing structural change.
Four, after I decided to stop doing payments.
When I truly made the decision to stop continuing with Web3 payments, I did not feel a strong sense of 'finality.' It felt more like an exploration had finally reached a point where it should stop. I have not left this industry; I simply shifted from trying to stand on the waterway to catch water, to standing beside the waterway, re-observing how the water flows and where it ultimately leads.
In the repeated dismantling of payment structures, one judgment has become increasingly clear: payment solves liquidity problems, whether money can move and how quickly it can move; but what truly determines long-term value has never been liquidity itself, but — after liquidity, where the money stops and how it is managed.
If we look back at the development path of China's financial technology over the past twenty years, this logic is actually very clear. Payments are just the entrance, balances are the transfer stations, and what truly forms scale and barriers is the subsequent capital management and asset allocation systems. Yu'e Bao, Tian Tian Fund, and Tianhong did not become successful because they 'do payments better,' but because they stand behind payments, undertaking and reorganizing the already scaled capital flows.
Payments are the entrance, but not the end point. Looking at this structure in the Web3 world, I also see similar issues gradually emerging. On-chain, there are already a lot of assets that are not aggressive but stable enough — lending, short-duration RWAs, neutral strategies, composite products... they resemble on-chain money market funds, short-term debt funds, and stable allocation tools. The real problem is not whether there are 'assets,' but that most people do not know what kind of risks they are facing and lack an entry point to understand, compare, and judge these assets.
As more and more funds begin to flow on the chain, this issue will only become more pronounced. It was also at this point that I began to realize: if I do not continue to do payments, I can still stay in this change in another way. Rather than competing for the waterway, I can clarify the structure of the water flow, lay out the boundaries and risks, and let people know which areas are worth staying in and which need extra caution. This is also the direction I will continue to explore with the team.
This article is not to conclude Web3 payments, nor to advise anyone to enter or exit, but merely to explain why I've chosen not to continue with payments. I hope it can provide some reference for later entrants, perhaps helping them avoid some detours.
