Author: Yokiiiya

In the past six months, I transitioned from a bystander in Web3 to someone inside the payment industry. Now, I choose to stop and no longer pursue Web3 payments.

This is not a retreat after failure, but a judgment adjustment made after truly engaging in the field. Over the past six months, I have visited Yiwu, Shuibei, Putian, and even Mexico, exploring the most vibrant places mentioned in reports to see 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.

However, the deeper I went, the clearer it became to me: this is not an industry where "doing the product well guarantees success." Payment is not about functionality; it’s about banking relationships, licenses, capital efficiency, and the long-term ability to manage risk.

Many payment businesses that seem "profitable" are essentially not earning a capability premium but a risk premium—it's just that nothing has gone wrong yet. What truly determines how far a payment company can go is never how much money it has made, but whether it can still endure and survive before risks become apparent.

This article is not meant to deny the industry but to remove the filters, lay bare the real structure, and leave some clearer judgments for those who come after. (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.)

1. Why did I enter Web3 payments?

As a serial entrepreneur, I ended a long-term entrepreneurial project last year. During the company's closure, I also took some time to rest, returning to a more "cleared" position to seriously consider what direction I should 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 itself and had little understanding of the payment industry. From a macro perspective, it was clearly a sufficiently large industry that was still in an upward cycle, and there seemed to be potential for a combination of Web3 and AI.

In my previous entrepreneurial experiences, we had engaged in cross-border business and developed platforms and software related to remote employment. In these practices, I repeatedly encountered the same fact: businesses can quickly go global, but the flow of funds always lags behind. Slow settlements, fragmented paths, opaque costs, and uncontrollable payment terms—these issues might be manageable with experience and patience when the scale is small; but once the business scales up, they will not be solved by "management capabilities," but will only be amplified. Money cannot flow as freely as information, which itself is an invisible limit for many globalized businesses.

It was against this backdrop that when I began to systematically understand the actual use of Web3 payments in the clearing and settlement layer, it presented not an abstract technical narrative but a solution that could logically address these pain points: faster settlement speeds, higher transparency, and almost round-the-clock clearing capabilities.

At that time, it seemed to be a direction that could solve real problems and was Day 1 Global—I was not entering the field because of Web3 itself, but because in the specific scenario of payments, it appeared to offer a better structure—at least logically, it seemed capable of leveraging those long-standing but overlooked frictions.

But looking back now, I gradually realize that, like many others at the time, I assumed a premise that was later continuously challenged by reality: as long as the clearing and settlement efficiency is high enough, payments would naturally migrate to the chain. It was even further simplified into an intuition—that payments merely facilitate transactions, and as long as the process is smooth, cash flow can be "manually generated."

Based on my lack of understanding of Web3 and the payment industry, I decided to spend three months truly immersing myself in this industry, clarifying the structure, and then deciding what to do and from what position to do it.

2. What truly matters in payments is never the product

When I arrived in Hong Kong, the initial idea was not complicated. The original thought was simple: relying on some resources and relationships my friend already had, I would start from OTC or relatively simple payment scenarios, get the cash flow running, and then determine what to do next based on real needs.

I was not there to conduct research or observe long-term; I wanted to see—if it was possible to first create something that could run, and then calibrate the direction in real business.

However, the external environment quickly underwent a noticeable acceleration. In May, the U.S. passed the GENIUS Act, and the entire industry was almost ignited overnight. Capital, projects, and entrepreneurs surged in, and Web3 payments transformed from a relatively niche infrastructure topic into a frequently discussed "new opportunity." From the outside, this was a positive development; but for a newly entered entrepreneurial team, this sudden excitement was not necessarily a good thing.

The more mixed, noisy, and rapidly formed consensus moments are, the easier it is to obscure the real issues. Internet giants, financial institutions, banks, traditional Web2 payment companies, and Web3 native teams all entered the fray, everyone talked about opportunities, but few discussed the structure. At that time, I felt it was even more important to dive into the front lines and truly understand this industry.

1. The "excitement" in reports and what is seen on the front lines are not the same

Once I truly began to operate on the front lines, the first thing I did was not to continue optimizing product solutions, 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 frequently mentioned in many studies and shares as a representative sample of "Web3 payments already scaled."

However, after walking around, I saw a different picture. Stablecoins do exist, but more often they are scattered, relationship-driven, and hidden uses.

It has not become a standardized, productized settlement method as described in reports. Many transactions are not due to "optimal efficiency." I then went to Shuibei, Putian, and Mexico, and also learned about penetration rates in different places like Africa and Argentina; the situation was not fundamentally different.

Web3 payments do not not exist, but they have not formed a stable, scalable main 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 was also during 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 likely does not lie "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, questions began to emerge: if real usage is so fragmented, can the productization path hold up?

2. When we truly start making applications, all problems point to the same place: channels

From July to September, I continued field research while systematically reaching out to potential clients. Human resources companies, insurance, tourism, MCN agencies, service trade, cross-border businesses, gaming companies… the demands varied, but the core issues pointed to a high degree of consistency: money should flow faster, cheaper, and more stably.

Payroll, task settlements, B2B payments—these scenarios are logically very suitable for stablecoins. Initially, we also thought the application layer was a viable entry point. But soon, an unavoidable premise presented itself: you must have a stable, compliant, and sustainable fiat ⇄ crypto channel.

We began to connect with several service providers that looked promising in the market, but after real experiences, it was hard to say that any channel was "long-term reliable." To meet business needs, we even tried to create our own channels, but only realized after getting started that this was not a product issue but an infrastructure issue.

Banking relationships, licensing 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 team with an internet background can quickly fill.

It was here that I first truly realized: payment is not an industry where "doing the product well guarantees success."

3. You think you are making money, but you are actually eating risk premiums

During this process, one phrase deeply resonated with me: payment is not about how much you earn, but how much you can spend. Many Web3 payment paths that seem to have "run through" are essentially not capability premiums but risk premiums.

The more dangerous aspect is that many people do not know what risks they are taking on or where those risks are specifically hidden.

• Is it the compliance issues of counterparties?

• Is it the mismatch in the structure of the fund pool?

• Is it the lag in risk control rules?

• Or is it the gray area of regulatory interpretation?

If the feasibility of a business is based on "nothing has gone wrong for now," then it is not a structure that can be safely scaled.

4. The essence of payment is a "flow of water" business.

Slowly, I began to understand payments from a simpler perspective. The essence of payment is actually a "flow of water" business. Whoever controls the waterway can make money; the larger the flow from the faucet, the greater the profit potential. If water flows past your door, you can take a cut—this sounds like an almost "easy money" business.

But precisely because of this, payment has never been a simple business. Not every company "standing by the water" can make money. The payment companies that truly make money in the long run are often those with 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 tolerance under compliance, risk control, and regulatory environments. Many paths that seem to have "large water flow" are essentially just ones where no one has come to close the valve temporarily. It was through this process that I developed a more complex but also more genuine respect for the payment industry.

Its charm lies not in who has created a new product, but in—it will very honestly tell you which industries in the real world are truly making money and which are just making a lot of noise. Standing on the waterway, you can see where the real funds are flowing, rather than who is constantly PR-ing from the outside.

5. Payment is a good business, but it is not the type of business we can excel at

Having come this far, I also had to face a judgment that is not easy for entrepreneurs but is very important. Payment is a good business, but it is not the type 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 iterate and continuously test products, but rather long-term stable banking relationships, sustainable compliance systems, mature risk control capabilities, and the credit accumulated through repeated negotiations within the regulatory environment. These capabilities cannot be achieved through mere effort or cleverness in the short term; they resemble industry-level assets that typically form gradually within specific types of teams and during particular time windows.

Once I viewed payments as a "flow of water" business, I became more acutely aware that what determines whether a team can remain on the waterway in the long term is not desire, but whether they possess the structural capacity to withstand pressure.

Under this premise, continuing to push forward no longer felt like a rational investment; it felt more like using time and luck to combat an industry structure that does not favor us. This issue ultimately led me to my next choice.

3. I still have faith in payments, but I see its true battlefield clearly

It should be noted that my decision to stop pursuing Web3 payments is not due to a bearish outlook on the industry. On the contrary, over the past six months, I have become increasingly convinced that the structural opportunities in the payment industry remain substantial.

However, as I began to dissect these opportunities, I gradually realized a more brutal yet equally important truth—payments are a business with a longer time cycle, heavier structure, and higher resource requirements. The opportunities are real, but they are not evenly distributed beneath every entrepreneurial team.

1. The incremental growth in payments is not a short-term dividend, but a long-term reconstruction

If we extend our perspective, cross-border payments are not a question of whether they can "explode," but rather a reconstruction process of infrastructure that is currently underway. The continuous overflow of global supply chains, growth in cross-border service trade, and acceleration of distributed team collaboration are trends that are amplifying the friction within 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 in clearing paths

• Unified settlement capabilities across currency zones and regulatory areas

This represents a structural improvement rather than a tactical optimization. Because of this, it inherently belongs to a decade-scale project, rather than a market that can be leveraged through product sprints.

2. The real challenge is not "collecting money," but the funding system within the Marketplace

After engaging with enough real scenarios on the front lines, I became increasingly aware that the difficulty in payments has long ceased to be about "collecting money" itself. Especially in Marketplace scenarios, payments are never an independent component but rather a complete ecosystem-level funding system.

Buyers, sellers, platforms, logistics, streamers, couriers, tax authorities, frozen accounts, subsidy accounts—all roles are interlinked within the same funding chain. In such a system, the true determinants of the threshold are not the payment interfaces, but:

• Custody and freezing mechanisms

• Revenue sharing and payment term designs

• Risk control and anti-fraud capabilities

• Cross-regional compliance and regulatory obligations

Once these systems stabilize, they naturally possess the potential to extend into financial capabilities; however, they also impose extremely high demands on the team's financial strength, risk control systems, and long-term patience.

3. Web3 payments are not a front-end revolution, but a back-end upgrade

One thing I have become increasingly certain of over the past six months is that the true scaling of Web3 payments will not occur at the user end.

It will not explode simply because users start actively using wallets; rather, it will happen because enterprises begin upgrading their treasury, reconciliation systems, cross-border settlement paths, and fund management methods.

In other words, the mainstream path is likely to be: the front end remains Web2, while the back end undergoes Web3 reconstruction. This is a form of "hidden" upgrade. And this upgrade precisely means it relies more on system stability, compliance certainty, and long-term operational capabilities rather than market education.

The real explosion point is not in the most mature markets. If we look at it regionally, the incremental growth in payments is also uneven.

The Asia-Pacific region is already a relatively mature market, while true structural growth is more likely to occur in regions like Latin America, Africa, the Middle East, and South Asia:

• Severe fragmentation of payment systems

• High costs and complex paths

• Stronger willingness of users and merchants to migrate

However, the other side of these markets is: high localization, significant regulatory differences, and strong operational requirements. What they need is not "cleverness," but long-term deep cultivation.

When I put these opportunities together, I had to confront a clear conclusion: payments are indeed a good business, but the resource endowments it requires—

• Long-term stable banking relationships

• Mature, sustainable compliance systems

• Risk control capabilities that can withstand stress testing

• Credit accumulated through repeated negotiations within the regulatory environment

are not within the current capability boundaries of our team. This is not a denial of direction but a respect for reality. The battlefield for payments still exists; it just no longer lies beneath our feet. It was under this judgment that I ultimately chose to stop and rethink: if I am not standing 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 made the decision to no longer pursue Web3 payments, I did not feel a strong sense of "finality." It felt more like a phase of exploration had finally reached a point where it was time to stop. I have not left this industry; I have merely shifted from trying to stand on the waterway to observing from the side how the water flows and where it ultimately leads.

In the process of repeatedly dissecting the payment structure, one judgment became increasingly clear: payments address the issue of flow, whether money can move and how quickly it can move; but what truly determines long-term value is never the flow itself, but—where the money stops after flowing and how it is managed.

Looking back at the development path of China's fintech over the past twenty years, this logic is quite clear. Payments are just the entry point, balances are the transfer stations, and what truly forms scale and barriers are the subsequent funding management and asset allocation systems. Yu'ebao, Tiantian Fund, and Tianhong did not succeed because they "did payments better," but because they stood behind payments, accepting and reorganizing the already scaled flow of funds.

Payments are the entrance, but not the endpoint. When I place this structure back into the Web3 world, I also see similar issues gradually emerging. There are already many asset forms on-chain that are not aggressive but sufficiently robust—lending, short-duration RWA, neutral strategies, and composite products… They resemble on-chain money market funds, short-term bond funds, and stable allocation tools. The real issue is not "whether there are assets," but rather: most people do not understand the risks they are facing and lack an entry point to comprehend, compare, and judge these assets.

As more and more funds begin to flow on-chain, this issue will only become more pronounced. It was at this juncture that I began to realize: if I do not continue to do payments, I can still remain within this change in another way. Instead of 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 require extra caution. This is also the direction I will continue to explore with my team.

This article is not a conclusion on Web3 payments, nor is it an encouragement for anyone to enter or exit; it is merely an attempt to clarify why I chose to stop pursuing payments. I hope it can provide some reference for those who come after, perhaps helping them avoid some detours.

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