PayFi Open Microphone No.1: Web3 and Internet Giants, Payment Alliances and Concept Implementation
Written by: Will Awang
Inlate 2024 and early 2025, the new word "PayFi" has quietly appeared in the context of the crypto community.
At first, it was seen as a "narrative wrapper" for the Solana community - Crypto payments were superimposed on liquidity and interest rate models, as if DeFi had changed its name. However, as a group of long-term payment builders joined the discussion, this seemingly new bottle of old wine concept was gradually given a more realistic and infrastructure-based meaning.
PayFi is no longer a "story of issuing coins for the sake of issuing coins", but the reconstruction of traditional payment in the Web3 world through blockchain.
The open mic invited practitioners and thinkers from the front line of PayFi, including:
• Will (@Will_7th): Web3 lawyer, who participated in the construction of multiple payment projects, focusing on stablecoins, payments, tokenization and RWA.
• Kay (@portal_kay): Web3 product manager, once worked on GameFi and BTC ecological projects; We recognize the application value of stablecoin payment and look forward to making products that can be actually implemented.
• Claudio (@Clllau_dio): KODO co-founder, formerly worked in Byte International Payment, focusing on the fintech industry, and is committed to building an enterprise-level digital cross-border payment platform for the next decade.
• Sky (@skyhan_eth): ROZO co-creator, deeply engaged in the field of crypto-native acquiring, worked for American Express in charge of interfacing with card issuers, and began to build an easy-to-use and low-friction acquiring product due to the poor Bitcoin payment experience in Tokyo in 2019.
Four senior crypto payment practitioners and researchers conducted a nearly 3-hour in-depth discussion on the four themes of "What is PayFi", "The Layout of Giants", "The Future of Crypto Payment" and "The Cooperation Model of Payment Alliance".
Part 1: What is PayFi?
Anew species of on-chain payment in the eyes of the four front-line builders
: "PayFi is not a financial term for old wine in a new bottle, it represents a form of payment + financial integration that is native to the chain." In this open microphone opening discussion, several industry builders invariably expressed similar views - PayFi may be the closest to "landing" financial infrastructure innovation in the Web3 world.
Sky: The on-chain credit revolution from supply chain financeSky
was the first to speak, and she reviewed the origin of the concept of PayFi while doing a double deconstruction of technology and scenarios.
"Although the concept of PayFi was proposed by Solana's Lily in recent years, its prototype actually existed very early." She pointed out that the earliest form of PayFi can be traced back to traditional supply chain finance: payment first, settlement later, which is essentially a financial structure of time and credit.
She divides the payment scenarios into two categories: consumer payment on the C-side and business to professional on the B-side. At present, the more active projects in the market are mainly concentrated in the B-side, such as the supply chain finance platform that provides enterprises with advance funds and settlement pools. But Sky believes that the real imagination is actually the C-side.
"Credit cards are the most successful example of C-end PayFi, which existed before the dawn of the internet, and is the greatest financial innovation since World War II." Sky lamented that there is no real "crypto credit card" product running on the chain today, but this shows that the opportunity is huge. As long as a similar credit system can be reconstructed on the chain, users can realize the experience of spending first and paying later without bank accounts and government IDs, and establish a crypto-native merchant network, which is the model that has a real opportunity to impact Visa.
Claudio: Turning "financial services" into pluggable and open components
"When a lot of people think of PayFi, the first thing they think is a payment channel." Claudio opens by getting straight to the point, "But if PayFi is just a different way of paying, then it can only be called Web3 payments at best, not PayFi."
In his view, the most important innovation of PayFi is to "make the role, ability and revenue logic in the traditional financial service chain more efficient with the global liquidity of the blockchain". ** Become a block of modules that can be combined and plugged and unplugged.
Claudio uses his real-life business as an example: his team has been serving traditional enterprises for a long time, especially overseas Chinese enterprises. The biggest problem they encounter in cross-border transactions is not the payment interface, but the low efficiency of capital turnover, the high financing threshold, and the high pressure of capital advances. 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 through the endless cycle between advances and payments.
Kay: In the eyes of retail investors, "PayFi" is actually "Web3 payment",
which is different from the technical perspective of Sky and Claudio, and Kay has made another definition of PayFi from the perspective of "retail investors".
"Fi is Finance in the eyes of the industry, but in the eyes of retail investors, it is actually the 'label' of Web3." Kay points out that this semantic difference actually leads to a "misconception of 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 made an analogy: "Just like GameFi and SocialFi, Fi has become a symbolic way of categorization, and it no longer refers to 'finance'." This also leads to the fact that PayFi tends to become obscure in the community: it can be a payment tool, a pool, or even a product that is issued in the name of payment.
Kay also pointed out that many teams in the Web3 payment field are doing real B-end business, but because of the long product chain and the narrative is not sexy, it rarely sparks widespread discussion in the community. On the contrary, some projects that are closer to "warm-up + hype" have gained a lot of attention.
"So I especially hope that the topic of PayFi can connect more teams that 'really land' with users who 'really care about payment'." "If we can't reach a consensus, PayFi may become the next bad Fi," she said.
Will: PayFi is the blockchain "financial Lego" that dismantles Alipay,
"Many people want to find coins that can be speculated, so they stare at PayFi. But most of the real PayFi projects can't issue coins." Will's tone is light, but it hits the nail on the head.
He further pointed out that the bottom layer of the PayFi projects packaged by Solana's popularity is often the on-chain capital pool + interest rate model, which speculates on the "time value of money", which is essentially a financial business, but it is covered with a shell of payment. Although this kind of "concept packaging" is not pure, it has also promoted the explosion of the PayFi ecosystem.
But in Will's eyes, the real value of PayFi is not hype, but "deconstruction".
"If Alipay is a closed platform, then PayFi is to disassemble each financial service module of Alipay into Lego bricks and open it up. Any developer can build their own blockchain, Alipay."
He believes that the most explosive scenarios for PayFi are those users who do not have traditional bank accounts but have stable network connections—that is, residents of small countries in Asia, Africa and Latin America, Web3 natives, AI Agents and other atypical users.
"These people don't need a bank, they just need a wallet. As long as they can collect, spend, borrow, and repay money, PayFi is their bank." Will emphasized that the C-side is the endgame of PayFi and the logic of valuation. "As long as the project team can grasp the user's financial behavior, it will have credit and can provide corresponding financial services such as lending, payment, and wealth management. This story is so sexy, don't be sorry for yourself."
This is the real PayFi in the eyes of the four builders: not a hype term, but a system-level revolution that is decoupled from traditional finance and reconstructed on-chain. Everyone sees a different facet, but points to the same future – a world where there is no need for banks, but where everyone can "have a bank".
2. When the Internet giants began to "invade" PayFi, were the entrepreneurs besieged or "carried by the sedan chair"?
When names such as Stripe, Visa, OKX, and Coinbase appeared in PayFi-related news headlines one after another, the first reaction of many entrepreneurs was that they were under a lot of pressure.
"Every time I see a new move in CeFi (traditional finance), I feel like my life cycle has shortened a little bit." Claudio said with a wry smile. But then he changed his words: "But the fact that they exert their strength so often just shows that they are also panicking."
This discussion about "the entry of giants, the way out for entrepreneurs" has become the most intense and real part of the open mic.
Stripe, Visa, Coinbase: What the hell are they grabbing?
Sky pointed out straight to the point that Stripe and Visa's "card issuance" move has directly impacted the middleman model. "I have a friend who makes U cards overseas, and as soon as the news came out, he closed the U card products the next day." This sentence made the audience dumbfounded.
Originally, "middleman" products such as U cards were used to provide users with consumption exports of cryptocurrencies by connecting with card issuers such as Visa and Mastercard. However, when Visa and Stripe directly opened the card issuance authority, the value chain of these middlemen was cut in an instant.
At the same time, the rise of stablecoins is quietly weakening the role of traditional banks. "Now stablecoins are banks, but they keep money on the chain." Sky was very straightforward. Visa and Mastercard have the merchant network in their hands, which is their last bastion. But whether it will be bypassed in the future has become an obvious trend.
Kay added a C-end perspective: "OKX's recent OKX Pay is said to be a C-end payment, but in fact, the first version is like a social product, P2P transfers, group building and friends, which is not what payment should be at all." He sharply pointed out that payment is essentially a consumer behavior, which is inseparable from real scenes. Relying only on mutual transfers between wallets cannot support a C-end payment ecology.
Instead, it was Coinbase's X402 protocol that caught Kay's eye. "It has designed a set of on-chain micropayment protocols for the micropayment needs of AI agents, which is elegant, concise and practical." Kay commented. This kind of B2B, machine-level invocation scenario accurately hits the core advantage of on-chain payment - cross-border micropayment with extremely low friction.
How do entrepreneurs "mismatch and compete" with giants?
"If you can't beat it, join in." Claudio said half-jokingly. But he then added: "What we can do as infrastructure startups is to make achievements in our own niche as soon as possible. Regardless of whether it is acquired or co-built in the future, the only way forward is to stand on its feet."
He cites the example of Stripe: Stripe is a powerful company in the global payments market, but it has never been a "siloed" company, but has built a global network by integrating regional payment solutions. "No local payment company in any country can beat Stripe, but Stripe can't do without a local partner either." Claudio said.
Sky believes that the real opportunity for startups lies in the part that "giants are unwilling to do and are not good at doing". "Visa and Stripe are good at connecting merchants and consumers, but they are reluctant to touch the on-chain advance, credit, and interest rate models.
These are the areas where entrepreneurs can focus on breaking through." She specifically mentioned the concept of "on-chain credit cards". "Today's U cards are just prepaid cards, not real credit cards at all. If you can use on-chain credit data to give credit to users, even if the amount is not high, it will be a very disruptive product."
Giants are "capital moats", and PayFi should be "liquidity moats"
Will started from a lower level of logic and gave his judgment.
"Giants like Visa, Mastercard, and Stripe are essentially network effects piled up by capital." "But if PayFi really works, its moat won't be capital, it's liquidity," he said.
He explained that the pooling of funds, lending, and advances on the chain are all issues of "liquidity of money". As long as an efficient and transparent liquidity network can be built on-chain, users, merchants, and developers will naturally move closer to this place, rather than passively relying on Visa's "brand credit".
"The giants will continue to roll up KYC-based card issuance and off-chain consumption records, but the chain is a new arena." Will firmly said, "PayFi should not compete with them for the same territory, but should eat away at their core value from the new track of 'on-chain liquidity'."
Sky also added: "In the past few years, the most difficult part of our payment is not to get users, but to get the liquidity of the 'last mile'. PayFi makes the flow of money simple and transparent, and that's what the giants are really afraid of."
This round of discussion on "Giants' Layout of PayFi" finally came to a consensus:
• Giants will continue to strengthen their moats in "entry-level" capabilities such as merchant networks, card issuance, and payment channels.
• The opportunities for entrepreneurs and the PayFi ecosystem lie in the reconstruction of underlying liquidity, the de-platformization of credit, and the explosion of new scenarios such as machine economy and micropayment.
Giants value the "face" of payment, but PayFi wants the "lining" of payment. Claudio's last sentence is intriguing: "We are not competing with the giants, but we are grabbing a market that they can't see, or pretend to be invisible for the time being."
3. Will Crypto payment really be "universally popular"?
Mass Adoption's virtual and real
"Mass Adoption" is the most popular vision of almost all crypto practitioners. But what counts as a real Adoption? Is it the popularity of tweets in the cryptocurrency circle? Is Memecoin wave after wave of FOMO? Or, one day you buy coffee on the street and use USDC?
At this open mic, several guests had a rare "pragmatic" discussion around "Mass Adoption of Crypto Payment".
Claudio: Don't deify stablecoins, it's just an "upgrade" of cross-border payments
: "I believe in Mass Adoption, but it depends on how you define it." Claudio's point is as realistic as ever.
In his view, there is no doubt about the advantages of stablecoins in cross-border payments for enterprises:
• Cost reduction, speed and transparency.
• Cross-border clearing and settlement is much more efficient than the banking system of fifty or sixty years ago.
"But that doesn't mean that stablecoins will indiscriminately replace local payments." He stressed that in countries like China, India, and Singapore, local payment systems have long been mature and efficient, and "developing countries like Mexico have little incentive to use stablecoins, and local payments are completely sufficient."
He judged that stablecoins only have structural opportunities in countries with extremely weak financial infrastructure. Even so, whether to choose blockchain or not, it is not necessarily. "The centralized solution of digital yuan is not necessarily worse than that of blockchain." Claudio concluded: "Stablecoins will be part of the payment system, but they will never be the only endgame. The future must be a pattern of multiple currencies and forms."
Sky: Quantitatively look at the volume, qualitatively look at the penetration, don't be deceived by the "fake Adoption" in the cryptocurrency circle
, "Mass Adoption of Crypto payment, it is necessary to be quantitative and qualitative." Sky threw out a set of "hard indicators":
• Quantitatively, at least the market value of stablecoins of trillions of dollars, close to the volume of US dollar M0, can be regarded as Adoption in the true sense, and now the volume of stablecoins is at the level of 100 billion US dollars.
• Qualitatively, it's the real penetration of a certain area, "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."
Thekey to driving adoption is two major pain points:
• Friction in payment methods. Credit cards in the United States and South America dominate the market, and the handling fee for micropayment is as high as more than 10%, and the pain points are obvious.
• The realities of currency devaluation. In high-inflation countries such as Argentina and Turkey, the real demand for cash and stablecoins goes far beyond the discussion of "payment innovation".
"You don't have to educate users, life will force them to use it." Sky said bluntly.
But she also cautioned that the openness of policies (such as the free competition of currencies after Milley came to power in Argentina) and the cost of Web3 access for merchants are the key to Mass Adoption.
Kay: Top-down vs. bottom-up, there are two paths to Mass AdoptionKay
started with the "path theory" to the topic of Mass Adoption.
He summarized it into two models:
• Top-down: government-driven, system-upgraded.
• Bottom-up: Users vote with their feet, and the people adopt it spontaneously.
In Singapore, for example, the government has launched an identity + payment system called "SingPass", which also uses blockchain technology.
While functionally strong, Kay points out that this model relies heavily on local identity systems, with tourists and expatriates not even having an entrance.
"This top-down model can bring fast adoption, but its dividends will not be shared with users." Kay argues that systems that lack endogenous incentives and flywheel effects are destined to be "tools of government." In contrast, countries such as Argentina and Turkey have more vitality in bottom-up adoption. With fiat currency depreciation and credit bankruptcy, users themselves will look for stablecoins as value anchors. He shared a real-life case of a restaurant employee in Turkey who "exchanged for US dollars or USDT as soon as they were paid".
"Mass Adoption, which is paid by crypto, will ultimately be a combination of these two paths." "But it's the bottom-up path that continues to snowball and really benefit users."
Will: The moat of Crypto payment is to put "off-chain data" onto the chain
, and Will proposes his own Mass Adoption formula from the perspective of "data precipitation".
"The real value of crypto payment is to turn off-chain payment behavior into on-chain credit history." He believes that traditional payment giants have the ability to pay data and credit evaluation, while the opportunity for Crypto payment lies in rebuilding data and credit through blockchain.
For example, his team has designed a set of incentives:
• As long as users generate transactions through on-chain payments, they can earn points.
• These points can be exchanged for tokens in the future, forming a flywheel of "use + earn".
• Whether it is a business, an individual, or a project party, they can get substantial returns from promoting adoption.
"In the past, the biggest problem with To B projects was that there was no return from early users, and people were just using tools. But if part of the revenue is distributed to early users, the C-side is no longer a tool user, but an ecological builder." Will said.
For user incentives, Sky shared real-life examples of communities in cyber countries:
• The community has less than 200 people, and the consumption list is published every week.
• In order to "hit the list", users will take the initiative to pull merchants to access Crypto payment.
• This self-driving force of "use + earn" makes adoption a matter of course.
"Giants like Visa and Stripe never share their revenue with users." Will said with a smile, "If Web3 can run this use+earn model, the Mass Adoption of Crypto payments will really make sense."
This discussion about Mass Adoption led to a clear conclusion:
• It doesn't happen automatically. It needs to be a double catalytic catalyst of payment pain points and monetary demand.
• It does not rely on a single technology. Stablecoins, on-chain data, and incentives are all necessary pieces of the puzzle.
• It is a combination of a business model and an eco-flywheel.
Mass Adoption, which is paid by crypto, is not only a replacement of the old system by new technology, but also a regain of the power of wealth and credit for ordinary people.
Claudio's quote became the finishing touch of the discussion: "Mass Adoption is not about Crypto changing the world, but about the world's problems, and Crypto can solve them."
4. How to break the "moat" of giants in the payment alliance? A de-platformized self-help and co-construction
"The payment industry is essentially an 'alliance track'."
In the final round of open mic topics, Sky did not use the usual entrepreneurial narrative to talk about "payment alliance", but defined this "collective battle" as a collaborative game of life and death.
For example, she said, "Even if Visa ditches credit cards and fiat currency settlement, the name remains the same, it's still Visa. The brand is its longest-term barrier." And how can the new generation of Web3 payment projects build their own moats under the reality that "technology can be copied at any time and the ecology can be seized instantly"?
The answer is just two words: alliances.
Sky: The brand is the ultimate barrier, and the alliance is the only way for a small team to become a "big name"
"The technology and track will change, but the brand will precipitate trust." Sky emphasized that the significance of the payment alliance is not in the cliché of "resource integration", but in how to form a perception of "Crypto payment = these brands" in the minds of users.
She shared the experience of ROZO landing in cyber nation communities:
• Small physical communities (less than 200 people).
• The on-chain consumption list will be released every week, and the top users will take the initiative to "pull merchants" to access Crypto payment.
• Between merchants and users, a real "use + earn" flywheel has been formed.
"It's not about being hot, it's about cultivating the habit of paying." Sky said. The role of the alliance is to replicate this "real adoption in small scenarios" to more places, so that users, merchants, and project parties can benefit from ecological growth.
"Only when everyone works together to 'do this' can individual brands have a chance to become 'Visa-level' mental cognition." Sky concludes.
Claudio: The alliance is not a group for heating, it is the reality of the B-end market that requires
Claudio to start from a more practical B-end scenario and give the underlying logic of the alliance.
"The payments industry is never a one-man business." For example, he said that Stripe's global strength is due to its continuous cooperation and aggregation with local payment solutions in various regions. "No payment company has strong local capabilities in every corner of the globe." He said.
He bluntly said that his team is not good at operation, marketing, and branding, and PayFi's multi-market attribute naturally requires everyone to join forces to speak out and build a brand.
Claudio also mentioned that since the beginning of this year, To B projects in the cryptocurrency circle have begun to take the initiative to build communities and build brands, "Projects like Huma and BlackHorse, which are not necessary to To C, have also begun to strengthen their ecological influence through brands."
This kind of "B+C two-wheel drive" is especially important in the payment track.
"The alliance is a 'brand co-construction', and when users trust the alliance, enterprise customers will naturally trust you." Claudio said.
Will: Use Web3 incentives to turn C-end users into "business partners"
"What we want to do is not a simple alliance, but a 'decentralized alliance' with a Web3 incentive mechanism." Will's statement makes the core of the alliance more crypto-flavored.
He shared a set of token economic models that the team is working on:
• The act of driving on-chain payments will earn alliance points.
• Points can be exchanged for tokens and benefits in the future.
• Payment channels, merchants, developers, and early adopters are all contributors to this "on-chain payment growth" and should benefit from it.
"Traditional payment giants keep all their earnings in the platform. But with Crypto payments, you can use the token economy to distribute the increased value to each participant." Will believes that this will not only motivate C-side users, but also solve the problem of "lack of incentives" in the early adoption of B-side 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 of use, from which users, merchants, and project parties can get real returns."
Kay: The core of the alliance is to reduce the "cost of trust"
Kay pointed out the most essential value of the payment alliance from the perspective of user cognition: "In fact, the alliance is a kind of 'trust agent'."
For the average user, crypto payment has never been a technical issue, but a question of "can I trust this payment method".
• Trust security.
• Trust liquidity.
• Trust is not "cut" after it runs out.
The role of the alliance is to build a bridge of trust between users, merchants and project parties to "share risks and benefits".
"Instead of fighting separately, we should work together as a banner." "Brands are the most expensive resource, and alliances are the fastest brand amplifiers," Kay said. She also mentioned that the alliance is not only the linkage of technology and brand, but also the "infrastructure" that lowers the entry threshold for merchants and users.
"If a merchant wants to access Crypto payment on its own, the learning cost, compliance risks, and user education will discourage it. However, if it is a standardized solution made by the alliance, merchants only need to believe in this "alliance brand" and can access it at a low cost." Kay said.
Summary: The alliance is the "civilian weapon" of Web3 payment against the Visa modelThis
round of discussion about the "payment alliance" finally returned to a simple logic:
• The core barrier of Visa and Stripe is "network effect + brand trust".
• The PayFi project is on its own and difficult to compete with.
• Alliances are civilian weapons that use a decentralized approach to rebuild "network effects + brand trust".
• The technology is sufficient, and the fight is "who can make the user believe in you first".
5. In the end,
the significance of PayFi is not in DeFi that has changed vests, but in allowing "users who spend money" to stand on the side of income for the first time. In the past, the revenue of the payment network only belonged to giants such as Visa and Stripe, but on the chain, every payment and every use case by users is part of the value of the network, and they should also share the growth dividends. What PayFi wants to do is to turn payment into a co-construction game of "the more you use, the more you earn", so that the C-end is not only a consumer, but also a beneficiary of the ecosystem.
In PayFi, spending money is no longer just an expense, but a small piece of the Visa puzzle that everyone can have.