Repost the original title “PayFi Open Mic No.1: Web3 vs Internet Giants, Payment Alliances and Concept Implementation”

By the end of 2024 and the beginning of 2025, the new term ‘PayFi’ quietly emerged in the context of the crypto community.

Initially, it was seen as a ‘narrative packaging’ for the Solana community - Crypto payments overlay liquidity, interest rate models, as if it were DeFi with a different name. However, with a group of Builders who have long been involved in payments joining the discussion, this seemingly old wine in a new bottle concept is gradually being endowed with a more realistic and infrastructural meaning.

PayFi is no longer a story of “issuing coins for the sake of issuing coins”, but the reconstruction of traditional payments in the Web3 world through blockchain.

This time, the open wheat invited practitioners and thinkers from the front line of PayFi, including:

• Will（@ Will_7th）: Web3 lawyer, involved in building multiple payment projects, focusing on stablecoins, payments, tokenization, and RWA.
• Kay (@portal_kay): Web3 product manager, has worked on GameFi and BTC ecosystem projects; recognizes the application value of stablecoin payments, and looks forward to creating practical products.
• Claudio (@Clllau_dio): KODO联创, formerly worked at Byte International Payment, focusing on the financial technology industry, dedicated to building the next decade’s enterprise-level digital cross-border payment platform.
• Sky (@skyhan_eth): ROZO, deeply cultivating the field of native encryption acquiring, once worked for American Express, responsible for coordinating with issuing banks. Started to build easy-to-use, low-friction acquiring products after experiencing a terrible Bitcoin payment experience in Tokyo in 2019.

Four senior cryptocurrency payment practitioners and researchers conducted a nearly 3-hour in-depth discussion on four major themes: ‘What is PayFi,’ ‘The layout of giants,’ ‘The future of crypto payments,’ and ‘Collaborative models of payment alliances.’

What is PayFi?

The new species of on-chain payment in the eyes of the four front-line builders

“‘PayFi’ is not a new term for old wine in finance. It represents a native on-chain fusion of payment and finance.” In this open discussion, several industry builders expressed similar views spontaneously - PayFi may be the financial infrastructure innovation closest to being ‘landed’ in the Web3 world.

Sky: The blockchain credit revolution from the supply chain finance

Sky was the first to speak, she reviewed the origin of the PayFi concept while deconstructing both the technology and the scene.

“Although the concept of PayFi was proposed by Lily from Solana in recent years, its prototype actually existed long ago.” She pointed out that the earliest form of PayFi can be traced back to traditional supply chain finance: payment first, settlement later, essentially a financial structure based on time and credit.

She divides the payment scenarios into two major categories: consumer payment at the C-end (to Consumer) and enterprise payment at the B-end (Business to Professional). The more active projects in the current market are mainly focused on the B-end, such as the supply chain financial platform that provides financing and settlement funds to enterprises. However, Sky believes that the real imagination space lies in the C-end.

“Credit cards are the most successful example of C-end PayFi. They existed before the birth of the Internet and are the greatest financial innovation since World War II,” Sky exclaimed. He pointed out that there hasn’t been a true ‘crypto credit card’ product on the chain yet, but this actually indicates a huge opportunity. As long as a similar credit system can be reconstructed on the chain, users can experience post-consumption payments without the need for a bank account or government ID. By establishing a Crypto-native merchant network, this is the real opportunity to challenge the Visa model.

Claudio: Turn ‘financial services’ into pluggable open components

“Many people mention PayFi, the first reaction is the payment channel,” Claudio went straight to the point at the beginning, “But if PayFi is just a change in settlement method, then at best it can only be called Web3 payment, not PayFi.”

In his opinion,The most important innovation of PayFi is to make the roles, capabilities, and profit logic in the traditional financial service chain more efficient with the global liquidity of blockchain.Become modular, combinable, and detachable modules.

Claudio uses his real business as an example: his team has long served traditional enterprises, especially Chinese enterprises going global. The biggest problem they encounter in cross-border transactions is not payment interfaces, but low capital turnover efficiency, high financing thresholds, and significant capital pressure. Traditional financial institutions have limited support for small and medium-sized enterprises, while the openness of blockchain and stablecoins can provide interest-bearing capital pools in a more flexible way, breaking the vicious cycle between financing and repayment.

Kay: What retail investors see as ‘PayFi’ is actually ‘Web3 payment’.

Different from Sky and Claudio’s technical perspectives, Kay provided another definition for PayFi from a ‘retail perspective’.

“In the industry, ‘Fi’ is seen as Finance, but in the eyes of retail investors, it is actually the ‘label’ of Web3.” Kay pointed out that this semantic difference actually brings about a kind of “misunderstanding-based popularity”—as long as a project uses blockchain technology and is related to payments, it can be called ‘PayFi’ in the eyes of users.

She gave an example: “Just like GameFi, SocialFi, Fi has become a symbolic classification method, no longer specifically referring to ‘finance’. This also leads to PayFi often becoming blurred in the community: it could be a payment tool, a fund pool, or even a product that issues coins under the guise of payment.

Kay also pointed out that many teams in the Web3 payment field are working on real landing B-end businesses, but because the product chain is long and the narrative is not sexy, it rarely sparks widespread discussion in the community. Instead, some projects that are closer to ‘preheating + hype’ have attracted a lot of attention.

“So I especially hope that the topic of PayFi can connect more ‘truly grounded’ teams and ‘truly care about payment’ users.” She said, “If we cannot reach a consensus, then PayFi may become the next Fi that is spoken badly about.”

Will: PayFi is blockchain ‘financial Lego’ that dismantles Alipay

“Many people want to find coins to speculate on, so they focus on PayFi. But most of the real PayFi projects cannot issue coins.” Will’s tone is light, but it hits a pain point in the industry.

He further pointed out that the PayFi projects packaged with the heat of Solana often have underlying on-chain fund pools and interest rate models, speculating on the ‘time value of money,’ which is essentially a financial business disguised as payment. Although this ‘conceptual packaging’ may not be pure, it has also promoted the outbreak of the PayFi ecosystem.

But in Will’s eyes, the real value of PayFi lies not in hype, but in ‘deconstruction’.

“If Alipay is a closed large platform, then PayFi is like disassembling each financial service module of Alipay into LEGO bricks and opening it up. Any developer can build their own blockchain Alipay.”

He believes that the most explosive scenario for PayFi is users who do not have traditional bank accounts but have stable internet connections - such as residents of small countries in Asia, Africa and Latin America, Web3 natives, AI Agents, and other non-typical users.

“These people don’t need a bank, 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 that the C-end is the ultimate goal of PayFi and also the logic of valuation. ‘As long as the project party can grasp the user’s financial behavior, they will have credit and be able to provide corresponding financial services such as lending, payment, and wealth management. This story is too sexy, I would regret it if I don’t do it.’

This is the real PayFi in the eyes of the four builders: not a hype term, but a systemic revolution decoupling from traditional finance and reconstructing on the chain. Everyone sees a different facet, but they all point to the same future - a world where there is no need for banks, but everyone can “have a bank”.

When Internet giants start to ‘invade’ PayFi, are entrepreneurs being besieged or being ‘carried in a sedan chair’?

When names like Stripe, Visa, OKX, and Coinbase appear consecutively in PayFi-related news headlines, many entrepreneurs’ first reaction is tremendous pressure.

“Every time I see a new move from CeFi (traditional finance), I feel like my lifespan has shortened a bit,” Claudio said with a bitter smile. But then he quickly changed the subject: “But their frequent actions actually show that they are also in a hurry.”

The discussion on “giants entering, entrepreneurs finding a way out” in this session has become the most intense and authentic part of the open mic.

Stripe, Visa, Coinbase: What are they really fighting for?

Sky pointed out directly that Stripe’s and Visa’s ‘issuing openness’ directly impacts the intermediary model. ‘A friend who does U-cards overseas, as soon as the news came out, closed the U-card product the next day.’ This statement left the audience speechless.

Originally, U-card and other “middleman” products connected to Visa, Mastercard, and other card issuers to provide users with the ability to spend cryptocurrencies. However, when Visa and Stripe directly opened card issuing permissions, the value chain of these middlemen 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 storing money on the chain,” Sky said bluntly. Visa and Mastercard control the merchant networks, which is their last stronghold. But whether they will be bypassed in the future has become an obvious trend.

Kay then added from the perspective of the C-end: “OKX recently launched OKX Pay, claiming to be C-end payment, but the first version is more like a social product, with P2P transfers, group creation, and friend invitations, which is far from the appearance of a payment method.” He pointed out sharply that payment is essentially a consumption behavior that cannot be separated from real scenarios. Simply relying on transfers between wallets cannot support a C-end payment ecosystem.

It is Coinbase’s X402 protocol that caught Kay’s eye. ‘It is designed for the micro-payment needs of AI agents, with an elegant, simple, and practical on-chain small payment protocol,’ Kay commented. This B2B, machine-level calling scenario actually hits the core advantage of on-chain payments - extremely low friction cross-border micro payments.

How do entrepreneurs compete with giants in a “dislocation competition”?

“If you can’t beat them, join them,” Claudio said half-jokingly. But he quickly added, “For infrastructure startups like us, the best we can do is to achieve results in our own niche as soon as possible. Whether it’s being acquired or collaborating, standing firm is the only way out.”

He used Stripe as an example: Stripe is incredibly strong in the global payment market, but it has never been a “lone ranger” company. Instead, it gradually builds a global network by continuously integrating regional payment solutions. “No local payment company in any country can beat Stripe, but Stripe also relies on local partners,” Claudio said.

Sky believes that the real opportunity for startups lies in the areas that ‘giants are unwilling to do and not good at doing.’ ‘Visa and Stripe excel at connecting merchants and consumers, but they are unwilling to touch the underlying financing, credit, and interest rate models on the chain. These are the areas that entrepreneurs can focus on breaking through.’

She specifically mentioned the concept of “on-chain credit cards.” “The current U card is just a prepaid card, not a real credit card at all. If we can use on-chain credit data to grant credit to users, even if the limit is not high, it will be a very disruptive product.”

The giant is a ‘capital moat’, and PayFi wants to be a ‘liquidity moat’.

Will starts from a deeper level of logic and gives his judgment.

“Visa, Mastercard, Stripe and other giants are essentially built on network effects by capital,” he said. “But if PayFi can really work, its moat will not be capital, but liquidity.”

He explained that on-chain liquidity pools, lending, and underwriting are all issues of ‘money liquidity.’ As long as an efficient and transparent liquidity network can be built on the chain, users, merchants, and developers will naturally converge here, rather than passively relying on Visa’s ‘brand credit.’

“The giants will continue to roll out card issuance and consumption records based on KYC, but the chain is a new arena,” Will said firmly. “PayFi should not go and compete with them for the same territory, but should erode their core value from the new track of ‘on-chain liquidity.’”

Sky also added: “In the past few years, when we were doing payments, the hardest part wasn’t actually acquiring users, but rather ensuring liquidity in the ‘last mile.’ PayFi makes fund flows simple and transparent, which is what truly scares the giants.”

The discussion about the “giants layout PayFi” finally reached a consensus in this round.

• The giants will continue to strengthen their moats in ‘gateway-level’ capabilities such as merchant network, card issuance, and payment channels.
• Entrepreneurs and the opportunity of the PayFi ecosystem lie in the reconstruction of underlying liquidity, the decentralization of credit, and the emergence of new scenarios such as machine economy and micro-payments.

What giants value is the ‘face’ of payment, while PayFi desires the ‘substance’ of payment.

Claudio’s final words are thought-provoking: “We are not competing with giants, but seizing a market that they cannot see, or are pretending not to see.”

3. Will Crypto Payment Really Be “Popularized”?

The Reality and Illusion of Mass Adoption

“Mass Adoption” is almost the favorite vision of all Crypto practitioners. But what is the real Adoption? Is it the enthusiasm of the coin circle brushing tweets? Is it the FOMO wave after wave of Memecoin? Or, one day you buy coffee on the street, and you use USDC?

This time, several guests gathered around the topic of ‘Mass Adoption of Crypto Payments’ to have a rare ‘pragmatic’ discussion on the open mic.

Claudio: Don’t mythicize 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 view remains pragmatic as always.

In his view, the advantages of stablecoins in enterprise cross-border payments are beyond doubt:

• Reduce costs, increase speed, and transparency.
• Cross-border clearing and settlement are much more efficient than the banking system fifty or sixty years ago.

“However, this does not mean that stablecoins will indiscriminately replace local payments.” He emphasized that countries like China, India, and Singapore already have mature and efficient local payment systems, and even developing countries like Mexico have no incentive to use stablecoins as local payments are completely sufficient.

He judged that stablecoins only have structural opportunities in countries with extremely weak financial infrastructure. Even so, it is not necessarily a better choice to choose blockchain. The centralized solution like the digital RMB may not be worse than blockchain.

Claudio summed up:”Stablecoins will be part of the payment system, but they will never be the only end. The future must be a situation where multiple currencies and forms coexist.”

Sky: Quantitative analysis looks at the size, while qualitative analysis looks at penetration. Don’t be fooled by the ‘fake Adoption’ in the currency circle.

“The mass adoption of crypto payments requires both quantitative and qualitative measures.” Sky has put forward a set of “hard indicators”:

• In terms of quantity, the stablecoin market value must reach at least one trillion US dollars, approaching the scale of the US dollar M0, to be considered as true adoption in the real sense. The current scale of stablecoins is at the level of hundreds of billions of US dollars.
• Qualitatively, it is the real penetration in a certain region, “for example, in a place like Argentina, if you ask ten people on the street, at least two or three people are using stablecoins, that’s called Adoption.”

The key to driving Adoption is two major pain points:

• Friction of payment methods. The credit card dominates the market in the United States, South America, and other regions, with high transaction fees of over 10% for small payments, which is a clear pain point.
• The real problem of currency depreciation. In high inflation countries like Argentina and Turkey, the real demand for cash and stablecoins far exceeds the discussion at the “payment innovation” level.

“You don’t need to educate users, life will force them to use it,” Sky said frankly.

However, she also reminded that the openness of policies (such as the currency free competition after Milae took office in Argentina) and the cost of merchants’ Web3 access are the key factors for Mass Adoption.

Kay: There are two ways to Mass Adoption, top-down and bottom-up.

Kay approached the topic of Mass Adoption from the perspective of ‘path theory’.

He summarized it into two modes:

• From top to bottom: government promotion, upgrade within the system.
• From the bottom up: users vote with their feet, and the public adopts it spontaneously.

Taking Singapore as an example, the government has launched an identity and payment system called ‘SingPass’, which also incorporates blockchain technology. Although it is very powerful in functionality, Kay pointed out that this model heavily relies on the local identity system, with no access even for tourists and foreign users.

“This top-down model can bring rapid adoption, but its benefits will not be shared with users.” Kay believes that systems lacking intrinsic incentives and flywheel effects are destined to be “government tools”.

In contrast, countries like Argentina and Turkey have a more vibrant bottom-up adoption. With fiat devaluation and credit bankruptcy, users will seek stablecoins as a value anchor. He shared a real case of Turkish restaurant staff ‘exchanging for US dollars or USDT immediately after receiving their wages’.

“The mass adoption of Crypto payments will ultimately be a combination of these two paths, as summarized by Kay. However, the path that can continue to snowball and truly benefit users is still the bottom-up approach.”

Will: The moat of crypto payment is to move ‘off-chain data’ onto the chain.

From the perspective of “data precipitation,” Will has proposed his own Mass Adoption formula.

“The true value of Crypto payments is to transform off-chain payment behavior into on-chain credit records.” He believes that traditional payment giants control payment data and credit assessment capabilities, while the opportunity for Crypto payments lies in rebuilding data and credit through blockchain.

He gave an example that his team designed a set of incentive mechanisms:

• Users can earn points as long as they generate transaction activities through on-chain payments.
• These points can be exchanged for tokens in the future, forming a flywheel of “use + earn”.
• Whether it’s merchants, individuals, or project parties, they can all get substantial returns from promoting adoption.

“The biggest problem with past To B projects was that early users did not receive any rewards; they were just using the tool. However, if some of the profits are distributed to early users, the C-end users will no longer be just tool users but rather ecosystem builders,” Will said.

For user incentives, Sky shared real cases in the network national community:

• The community has fewer than 200 people, and a consumption ranking is released every week.
• Users will actively invite merchants to integrate Crypto payments in order to ‘compete for rankings’.
• This self-driving force of ‘earn + use’ makes adoption a matter of course.

“Visa, Stripe, these giants never share their profits with users,” Will said with a smile. “If Web3 can make this earn-and-spend model work, the Mass Adoption of Crypto payments will truly be meaningful.”

The discussion about Mass Adoption has brought a clear conclusion:

• It does not happen automatically. It requires dual catalysis of pain points and currency demand.
• 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 model and ecological flywheel.

The mass adoption of Crypto payments is not only the replacement of the old system by new technology, but also the re-empowerment of ordinary people in wealth and credit rights.

Claudio’s remark has become the highlight of this discussion: ‘Mass Adoption is not about Crypto changing the world, but rather the world already having issues that Crypto happens to solve.’

4. Payment Alliance, How to Break the ‘Moat’ of Giants? A Self-help and Co-construction of De-platforming

The essence of the payment industry is essentially a ‘coalition-based track’.
In the final round of the open wheat, Sky did not use the usual entrepreneurial narrative to talk about the ‘payment alliance’, but directly defined this ‘collective battle’ as a life-and-death cooperation game.

She gave an example: ‘Even if Visa abandons credit cards, abandons fiat settlement, and keeps the name unchanged, it is still Visa. The brand is its longest-lasting barrier.’ How can the new generation of Web3 payment projects build their own moat in the reality of ‘technology can be copied at any time, and the ecosystem can be seized instantly’?

The answer is just two words: alliance.

Sky: Brand is the ultimate barrier, and alliance is the only way for small teams to become “big names”

“Technology and tracks will change, but what remains from the brand is trust.” Sky emphasizes that the significance of the payment alliance lies not in the cliché of “resource integration,” but in how to establish a perception in users’ minds that “Crypto payments = these brands.”

She shared the experience of ROZO’s landing in the online national community:

• A small physical community (less than 200 people).
• Every week, the top users on the online consumption list will take the initiative to “pull merchants” to adopt Crypto payments.
• A real “use + earn” flywheel has been formed between merchants and users.

“This is not about generating heat, but cultivating payment habits,” Sky said. And the role of the alliance is to replicate this ‘real adoption in small scenarios’ in more places, so that users, merchants, and projects can all benefit from ecosystem growth.

Sky summarized, “Only when everyone works together to ‘get this done,’ can individual brands have the opportunity to become a ‘Visa-level’ mental cognition.”

Claudio: The alliance is not for warmth, but a practical need in the B-side market.

Claudio starts from a more practical B-end scenario and provides the underlying logic of the alliance.

“The payment industry has never been a solo business.” He cited the example that Stripe is powerful globally because of continuous collaboration and aggregation with local payment solutions in various regions. “No payment company has strong local capabilities in every corner of the world,” he said.

He openly admitted that his team is not good at operations, marketing, and branding. The multi-party market nature of PayFi naturally requires everyone to join forces to speak out and build the brand together.

Claudio also mentioned that starting this year, To B projects in the currency circle have begun to actively build communities and shape their brands. “Projects like Huma and BlackHorse, which originally were not necessary for To C, are also starting to strengthen their ecological influence through branding.”
This “B+C dual-wheel drive” is particularly important in the payment track.

“The alliance is a ‘brand co-construction body’. When users trust the alliance, corporate clients will naturally trust you,” Claudio said.

Will: Using the incentive mechanism of Web3, turning C-end users into “business partners”

“What we want to create is not just a simple alliance, but a ‘decentralized alliance’ with Web3 incentive mechanisms.” Will’s description adds a more Crypto flavor to the core of the alliance.

He shared a tokenomics model that the team is working on:

• The act of promoting on-chain payments will earn alliance points.
• In the future, points can be exchanged for tokens and rights.
• Whether it’s payment channels, merchants, developers, or early users, they are all contributors to this “on-chain payment growth” and should benefit from it.

Traditional payment giants keep all profits within the platform. But crypto payments can use token economics to distribute the growing value to each participant. Will believes that this can not only motivate C-end users but also solve the ‘incentive gap’ problem in the early adoption of B-end projects.

He emphasized, “The PayFi project is not about issuing coins for the sake of issuing coins, but to form a ‘Net Positive’ closed-loop where users, merchants, and project parties can all receive real returns from it.”

Kay: The core of the alliance is to reduce the “cost of trust”

From the perspective of user cognition, Kay pointed out the most essential value of the payment alliance: “In fact, the alliance is a kind of ‘trust agent’.

For ordinary users, Crypto payments have never been a technical issue, but a question of “can I trust this payment method”.

• Trust and security.
• Trust liquidity.
• After trust is used up, it won’t be “cut”.

The role of the alliance is to build a “shared risk, shared reward” trust bridge between users, merchants, and project parties.

“Instead of fighting separately, it’s better to work together under one big flag,” Kay said. “Brand is the most valuable resource, and alliance is the fastest brand amplifier.”

She also mentioned that the alliance is not just the synergy of technology and brand, but also the ‘infrastructure’ that lowers the entry barriers for merchants and users.
‘If a merchant wants to independently access crypto payments, the learning cost, compliance risks, and user education will all make them hesitate. But if it is a standardized solution done by an alliance, the merchant only needs to trust this ‘alliance brand’ to access it at a low cost.’ Kay said.

Summary: Alliance is the ‘weapon of the common people’ in Web3 payments against the Visa model.

The discussion about the ‘Payment Alliance’ ultimately boiled down to a simple logic in this round.

• The core barrier of Visa and Stripe is ‘network effect + brand trust’.
• PayFi project is a force to be reckoned with on its own, making it difficult to compete against.
• The alliance is a decentralized way to rebuild the “network effect + brand trust” as a civilian weapon.
• Having enough technology is about ‘who can make users believe in you first’.

5. Finally

The significance of PayFi lies not in DeFi with a new coat, but in allowing “spending users” to stand on the income side for the first time. In the past, the profits of the payment network belonged only to giants like Visa and Stripe, but on the chain, every payment and every usage scenario by users is part of the network value and should also share in the growth dividends. What PayFi aims to do is turn payments into a collaborative 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 money is no longer just an expense, but piecing together your own little piece of the Visa puzzle, building a “financial LEGO” that everyone can have.

Statement:

1. This article is reprinted from [Will 阿望The original title is “PayFi Open Mic No.1: Web3 vs. Internet Giants, Payment Alliances and Concept Implementation”, copyright belongs to the original author [Will Awang], if you have any objections to the reprint, please contactGate Learn teamThe team will process it as soon as possible according to the relevant procedures.
2. Disclaimer: The views and opinions expressed in this article are solely those of the author and do not constitute any investment advice.
3. The other language versions of the article are translated by the Gate Learn team, which was not mentioned GateYou may not copy, distribute, or plagiarize translated articles without permission.