Over the past six months, I transitioned from being an observer of Web3 to delving deep into the payments industry. And now, I've chosen to stop and no longer continue with Web3 payments.
This isn't a retreat after failure, but rather a judgment adjustment made after truly stepping into the arena. During these six months, I visited Yiwu, Shuibei, Putian, and even Mexico, exploring the most talked-about places in reports to see how payments are actually made. I also got my hands dirty—built an MVP for Web3 payments, integrated accounts, developed Web3 payment collection tools, and tried to run the imagined path from the first step to the last.
But the deeper I went, the clearer I realized one thing: this isn't an industry where "making a good product guarantees victory." Payments aren't about features; they're about banking relationships, licenses, capital efficiency, and long-term risk management capabilities.
Many seemingly "profitable" payment businesses aren't actually earning ability premiums but risk premiums—they just haven't encountered issues yet. What truly determines how far a payment company can go isn't how much money it has made, but whether it can withstand and survive before risks become apparent.
This article isn't meant to negate the industry but to remove the filters, lay out the real structure, and leave behind some sober 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 Financial CEO Alex, discussing the same issues.)
1. Why Did I Enter Web3 Payments?
As a serial entrepreneur, I ended a multi-year startup project last year. During the company's closure, I also allowed myself some downtime, returning to a more "cleared" position to seriously consider where to focus my energy next.
Six months ago, a friend invited me to Hong Kong to explore Web3 payment-related entrepreneurship. At the time, I wasn't very familiar with Web3 itself and had little understanding of the payments industry. But from a macro perspective, it was clearly a large-scale industry still on an upward trajectory, and there was potential synergy between Web3 and AI.
In previous entrepreneurial ventures, we had handled cross-border business and built platforms and software for remote work. Through these practices, I repeatedly encountered the same reality: business can go global quickly, but the flow of funds always lags. 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, they aren't solved by "management capabilities"; they only get magnified. Money doesn't flow as freely as information, which itself is an invisible cap for many global businesses.
It was against this backdrop that when I began to systematically understand the practical use of Web3 payments in clearing and settlement, it presented not an abstract technical narrative but a solution that logically addressed these pain points directly: faster settlement speeds, higher transparency, and near-24/7 clearing capabilities.
In my judgment at the time, this seemed like a direction that could solve real problems and was Day 1 Global—I didn't enter because of Web3 itself, but because in the specific context of payments, it seemed to offer a superior structure—at least logically, it looked capable of leveraging those long-existing yet often ignored frictions.
But looking back now, I've also come to realize that, like many others, I assumed a premise that was later constantly challenged by reality: as long as clearing and settlement efficiency is high enough, payments would naturally migrate on-chain. It was even simplified into an intuition—payments are just about matching transactions; as long as the process works, you can "handcraft" cash flow.
Given my lack of understanding of Web3 and the payments industry, I decided to first spend three months truly immersing myself in the industry, understanding its structure, and then deciding what to do and from what position.
2. What Payments Really Compete On Is Never the Product
When I arrived in Hong Kong, the initial idea wasn't complicated. The starting thought was simple: leverage some existing resources and relationships from friends, start with OTC or relatively simple payment scenarios, get cash flow running, and then determine the next steps based on real needs.
I wasn't here to do studies or observe long-term; I wanted to see—was it possible to first build something that works and then calibrate the direction based on real business?
But soon, the external environment accelerated significantly. In May, the U.S. passed the GENIUS Act, and the entire industry was almost instantly ignited. Capital, projects, and entrepreneurs flooded in rapidly. Web3 payments transformed from a relatively niche infrastructure topic into a frequently discussed "new opportunity." From the outside, this was a positive; but for a startup team just getting started, this sudden buzz wasn't necessarily a good thing.
The more mixed, noisy, and consensus-driven the moment, the easier it is to掩盖 real issues. Internet giants, financial institutions, banks, traditional Web2 payment companies, and Web3 native teams entered the scene one after another. Everyone talked about opportunities, but few discussed the structure. I felt it was even more crucial to dive into the front lines and truly understand this industry.
1. The "Buzz" in Reports and What You See on the Ground Are Not the Same
After truly running on the ground, the first thing I did wasn't to optimize the product plan but to see: who is actually using Web3 payments? Why? And where? I first went to Yiwu, often cited in reports.
In many studies and shares, Yiwu is frequently held up as a representative sample of "Web3 payments already being scaled." But after actually visiting, I saw a different picture. Stablecoins do exist, but they are more sporadic, relationship-driven, and used behind the scenes.
They haven't become a standardized, productized, replicable settlement method as described in reports. Many transactions aren't based on "optimal efficiency." I later visited Shuibei, Putian, and Mexico, and also learned about penetration rates in places like Africa and Argentina; the situation wasn't fundamentally different.
Web3 payments do exist, but they are far from forming a stable, scalable main path. More often, they are just a "patch" embedded within the existing system. The real penetration rate doesn't match the heat felt in reports, communities, and discussions.
But it was during these exchanges that I gradually shifted my perspective from "can we build a product" to the industry structure itself. I began to realize that the incremental market for stablecoins likely isn't within the "crypto circle" but in those already existing Web2 business scenarios slowed down by traditional clearing and settlement systems.
This isn't a narrative migration but more like a slowly unfolding fintech upgrade. At the same time, questions emerged: if real usage is so fragmented, is the productization path even solid?
2. When We Actually Started Building Applications, All Problems Pointed to the Same Place: Channels
From July to September, while continuing field research, I began systematically engaging potential clients. HR companies, insurance, tourism, MCN agencies, service trade, cross-border businesses, gaming companies... the needs varied, but the core issue was highly consistent: 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 emerged: you must have stable, compliant, sustainable fiat ⇄ crypto channels.
We started integrating with several service providers that seemed good on the market, but the actual experience showed that it's hard to say any channel is "long-term reliable." To meet business needs, we even tried to build our own channels, but upon actually attempting it, we realized: this isn't a product problem; it's an infrastructure problem.
Banking relationships, licensing structure, KYB/KYC compliance, risk control capabilities, quota management, regulatory communication... the entire channel layer heavily relies on long-accumulated credit, experience, and capital. These aren't capabilities a small internet-background team can补齐 in the short term.
It was here that I truly realized for the first time: payments aren't an industry where "making a good product guarantees victory."
3. You Think You're Making Money, But You're Actually Eating Risk Premiums
During this process, one statement deeply触动 me: payments aren't about how much money you make, but how much money you can spend. Many seemingly "successful" Web3 payment paths aren't本质上 ability premiums but risk premiums.
The more dangerous part is: many don't know what risks they are承担, or where the risks specifically lie.
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Is it the compliance issue of the trading counterparty?
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Is it the mismatch in fund pool structure?
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Is it the lag in risk control rules?
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Or is it the gray area of regulatory interpretation?
If a business's viability is based on "nothing has happened yet," then it's not a structure that can be安心 scaled.
4. The Essence of Payments Is a "Water Flow" Business.
Slowly, I began to understand payments from a simpler perspective. The essence of payments is actually a "water flow" business. Whoever controls the waterway makes money; the greater the flow from the tap, the greater the earning potential. If water passes by your door, you can take a cut—it sounds like an almost "passive income" business.
But precisely because of this, payments are never a simple business. Not every company "by the water" can make money. The payment companies that make money long-term are often those with extremely strong control over water volume, pressure,回流, pollution, and leakage.
How much water you can handle depends on how much risk you can bear; how long you can keep the water flowing depends on your tolerance within compliance, risk control, and regulatory environments. Many paths that seem to have "great water flow" are本质上 just暂时没人来关闸. It was during this process that I developed a more complex, yet more real,敬畏 for the payments industry.
Its charm isn't in who made another new product, but in—it very honestly tells you, in the real world, which industries are actually making money and which are just making noise. Standing by the waterway, you can see where the real money is flowing, not who is constantly PRing outside.
5. Payments Are a Good Business, But Not One We Can Excel At
Reaching this point, I had to face a judgment that isn't easy for entrepreneurs but is very important. Payments are a good business, but they aren't the type of business we can excel at. This isn't a negation of the direction but a respect for resource endowment.
What the payments industry truly needs isn't rapid trial-and-error, iterative product capabilities, but long-term stable banking relationships, sustainable compliance systems, mature risk control capabilities, and credit accumulated through repeated博弈 in regulatory environments. These capabilities aren't "something you can拼出来," nor can they be补齐 in the short term through smarts or hard work. They are more like industry-level assets, often only formed gradually within specific types of teams and specific time windows.
After truly viewing payments as a "water flow business," I also became more clearly aware: what determines whether a team can stand by the waterway long-term isn't whether you want to, but whether you have that pressure-bearing structure in hand.
Under this premise, continuing to push was no longer a rational investment for us but more like using time and luck to fight against an industry structure that isn't on our side. This issue ultimately led me to the next choice.
3. I Still Believe in Payments, Just See Its True Battlefield Clearly
Let me be clear: I chose to stop doing Web3 payments not because I'm bearish on the industry. On the contrary, over the past six months, I've become increasingly convinced: the structural opportunities in the payments industry are still very large.
But when I truly拆开 these opportunities, I also gradually realized something more残酷 but equally important—payments are a business with longer time cycles, heavier structures, and higher resource requirements. The opportunities are real, but they aren't evenly distributed at the feet of every startup.
1. The Increment in Payments Isn't a Short-Term红利, But a Long-Term Rebuild
If you zoom out, cross-border payments aren't a question of "whether they can explode" but a ongoing infrastructure rebuilding process. The continued溢出 of global supply chains, growth in cross-border service trade, and acceleration of distributed team collaboration are all放大 the friction of traditional clearing and settlement systems.
In this process, the value of Web3 payments isn't体现在 "cheaper" but in three things:
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Significant improvement in turnover efficiency
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Transparency of clearing paths
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Unified settlement capability across currency zones and regulatory zones
This is a structural improvement, not a tactical optimization. And precisely because of this, it naturally belongs to a cross-decade-scale project, not a market that can be leveraged by product sprints.
2. What's Truly Difficult Isn't "Collecting Money," But the Fund System Within the Marketplace
After接触 enough real scenarios on the front lines, I became increasingly clear: the difficulty of payments no longer lies in "collecting money" itself. Especially in Marketplace scenarios, payments are never an independent component but an entire ecosystem-level fund system.
Buyers, sellers, platforms, logistics, streamers, riders, taxes, frozen accounts, subsidy accounts—all roles are interconnected in the same fund chain. In such a system, what truly determines the threshold isn't the payment interface but:
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Escrow and freezing mechanisms
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Split accounting and payment term design
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Risk control and anti-fraud capabilities
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Cross-regional compliance and regulatory obligations
Once such systems stabilize, they naturally have room to extend into financial capabilities; but同样, they also place extremely high demands on the team's capital strength, risk control system, and long-term patience.
3. Web3 Payments: Not a Front-Office Revolution, But a Back-Office Upgrade
One thing this half-year made me increasingly sure of: the true scaling of Web3 payments won't happen on the user side.
It won't explode because users start actively using wallets, but because corporate back offices start upgrading their Treasury, reconciliation systems, cross-border settlement paths, and fund pool management methods.
In other words, the mainstream path will likely be: front office remains Web2, back office gets Web3. This is a "hidden" upgrade. And this upgrade恰恰 means it relies more on system stability, compliance certainty, and long-term operational capability, not market education.
The real爆发点 also isn't in the most mature markets. If we look geographically, the increment is同样 not balanced.
Asia-Pacific is already a relatively mature market. The real structural growth is more likely to occur in regions like Latin America, Africa, the Middle East, and South Asia:
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Payment systems are severely fragmented
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High costs, complex paths
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Users and merchants have stronger migration willingness
But the other side of these markets is: high localization, strong regulatory differences, strong operational requirements. They need not "cleverness" but long-term深耕.
When I placed these opportunities together, I had to face a clear conclusion: payments are indeed a good business, but the resource endowment they require—
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Long-term stable banking relationships
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Mature, sustainable compliance systems
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Risk control capabilities that withstand stress tests
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Credit accumulated through repeated博弈 in regulatory environments
—are not within our team's current capability boundaries. This isn't a negation of the direction but a respect for reality. The battlefield for payments still exists, just not under our feet. It was under this judgment that I ultimately chose to stop and rethink: if not standing by the waterway, where else can I stand to continue participating in this ongoing structural change?
4. After I Decided to Stop Doing Payments
When I truly made the decision to stop doing Web3 payments, there wasn't a strong sense of "ending." It felt more like an exploration had finally reached a point where it should stop. I haven't left the industry. I've just shifted from trying to stand on the waterway to collect water, to standing beside the waterway,重新 observing how the water flows and where it ultimately goes.
In the process of repeatedly拆解 the payment structure, one judgment became increasingly clear: payments solve the flow problem—whether money can move and how fast; but what truly determines long-term value is never the flow itself, but—where the money stops after flowing, and how it is managed.
If we look back at the development path of China's fintech over the past twenty years, this logic is actually very clear. Payments are just the entrance; balances are the transfer station; what truly formed scale and barriers were the subsequent fund management and asset allocation systems. Yu'ebao, Tian Tian Fund, Tian Hong didn't succeed because they "did payments better," but because they stood behind payments,承接 and reorganizing the already large-scale fund flow.
Payments are the doorway, not the destination. Placing this structure back into the Web3 world, I see similar issues gradually emerging. The chain already has大量 not激进 but sufficiently robust asset forms—lending, short-duration RWA, neutral strategies,组合化 products... they are more like on-chain money market funds, short-term bond funds, and stable allocation tools. The real problem isn't "whether there are assets" but: most people don't know what risks they are facing and lack an entrance to understand, compare, and judge these assets.
As more and more funds start flowing on-chain, this issue will only become more prominent. It was at this node that I began to realize: if I don't continue with payments, I can still stay within this change in another way. Not by competing for the waterway, but by clarifying the structure of the water flow, laying out the boundaries and risks, letting people know which places are worth staying and which require extra caution. This is also the direction my team and I will continue to explore next.
This article isn't meant to draw conclusions about Web3 payments or advise anyone to enter or exit, it's just trying to clearly explain why I chose to stop doing payments. I hope it can serve as a reference for those who come after, perhaps helping them avoid some detours.
