From start to giving up, why I stopped doing Web3 payments

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, observing how payments are actually made in the most vibrant places mentioned in reports. I also engaged in building an MVP for Web3 payments, took on 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 "just making a good product will win." Payment is not about functionality, but about banking relationships, licenses, capital efficiency, and the long-term ability to manage risks.

Many payment businesses that seem "profitable" do not actually earn a premium for capability, but rather a premium for risk—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 rather whether it can still endure and survive before risks become apparent.

This article is not meant to deny the industry, but to remove the filter, 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-running entrepreneurial project last year. During the process of closing the company, 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. However, 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 between Web3 and AI.

In my previous entrepreneurial endeavors, 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: business 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 bypassed with experience and patience when the scale is small; but once the business scales up, they will not be solved by "management capability," but will only be magnified. Money cannot flow as freely as information, which itself is an invisible limit for many global businesses.

It was against this backdrop that when I began to systematically understand the actual usage 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 because of Web3 itself, but because it appeared to offer a better structure in the specific scenario of payments—at least logically, it seemed capable of leveraging those long-standing but often ignored frictions.

But looking back now, I gradually realized that, like many others, I had assumed a premise that reality would later challenge: 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—payments merely facilitate transactions, and as long as the process is smooth, cash flow can be "handcrafted."

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 Payments Truly Compete On Is Never the Product

When I arrived in Hong Kong, the initial idea was not complicated. The original thought was quite simple: relying on some existing resources and relationships of my friend, 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— is it possible to first create something that works, and then calibrate the direction in real business?

However, soon, the external environment 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 quickly flooded in, transforming Web3 payments from a relatively niche infrastructure topic into a frequently discussed "new opportunity." From the outside, this was beneficial; but for a newly launched 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 was talking about opportunities, but very few were discussing 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 "Buzz" in Reports and What You See on the Ground Are Not the Same

Once I started running on the front lines, the first thing I did was not to continue optimizing the product plan, but to see: who is actually using Web3 payments? Why are they using it? Where are they using it? I first went to Yiwu, which is frequently mentioned in many studies and shares as a representative sample of "Web3 payments already scaled."

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

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

Web3 payments do 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 through 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, problems began to surface: if real usage is so fragmented, does 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 the same problem: 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 direction we could enter. 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 good on the market, but after real experiences, it was hard to say any channel was "long-term reliable." To meet business needs, we even tried to build our own channels, but only after diving in did we realize: this is not fundamentally 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 from an internet background can quickly fill in.

It was here that I first truly realized: payment is not an industry where "just making a good product will win."

3. You Think You're Making Money, But You're Actually Eating Risk Premium

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

The more dangerous aspect is: many people do not know what risks they are taking, nor 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 "Water Flow" Business.

Gradually, I began to understand payments from a simpler perspective. The essence of payment is actually a "water flow" business. Whoever controls the waterway can make money; the larger the flow from the faucet, the greater the profit potential. If the 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 truly long-term profitable payment companies 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 flows" are essentially just temporarily unregulated. It was through this process that I developed a more complex yet 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 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 Not One We Can Excel At

At this point, 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 trial and error and continuously iterate products, but rather long-term stable banking relationships, sustainable compliance systems, mature risk control capabilities, and the credit accumulated after repeated negotiations in regulatory environments. These capabilities are not something that can be achieved by "just trying harder," nor can they be quickly filled in through cleverness or effort. They are more like industry-level assets that will only gradually form in specific types of teams and specific time windows.

When I truly viewed payment as a "water flow business," I also became more clearly aware that what determines whether a team can long-term stand on the waterway is not whether they want to, but whether they have that set of pressure-bearing structures.

Under this premise, continuing to push forward no longer felt like a rational investment, but more like using time and luck to fight against an industry structure that does not stand on our side. This issue ultimately led me to my next choice.

3. I Still Have Faith in Payments, I Just See Its True Battlefield Clearly

It should be noted that my choice to stop pursuing Web3 payments is not because I am bearish on this industry. On the contrary, over the past six months, I have become increasingly convinced that the structural opportunities in the payment industry are still very large.

However, when I truly break down these opportunities, I gradually realize a more brutal but equally important truth—payment is a business with a longer time cycle, heavier structure, and higher resource requirements. Its opportunities do exist, but they are not evenly distributed beneath every entrepreneurial team.

1. The Incremental Payment Is Not a Short-Term Dividend, But a Long-Term Reconstruction

If we extend the perspective, cross-border payments are not a question of "whether it 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 frictions in traditional clearing and settlement systems.

In this process, the value of Web3 payments does not lie in being "cheaper," but in three aspects:

• Significant improvement in turnover efficiency

• Transparency of clearing paths

• Unified settlement capabilities across currency zones and regulatory zones

This is a structural improvement, not a tactical optimization. Because of this, it naturally belongs to a project that spans a decade, rather than a market that can be leveraged through product sprints.

2. The Real Difficulty Is Not "Collecting Money," But the Funding System in the Marketplace

After engaging with enough real scenarios on the front lines, I became increasingly aware that the difficulty of payment is no longer in "collecting money" itself. Especially in Marketplace scenarios, payment has never been an independent component, but a complete ecosystem-level funding system.

Buyers, sellers, platforms, logistics, streamers, couriers, tax authorities, frozen accounts, subsidy accounts—all roles are mutually constrained within the same funding chain. In such a system, what truly determines the threshold is not the payment interface, but:

• Custody and freezing mechanisms

• Revenue sharing and payment term design

• Risk control and anti-fraud capabilities

• Cross-regional compliance and regulatory obligations

Once such systems stabilize, they naturally have the space to extend into financial capabilities; however, they also place 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 happen at the user end.

It will not explode because users start actively using wallets, but because enterprises begin upgrading their treasury, reconciliation systems, cross-border settlement paths, and fund pool 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 "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 also not in the most mature markets. If we look at it regionally, the incremental payment is also not evenly distributed.

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:

• Severely fragmented payment systems

• High costs and complex paths

• Stronger willingness of users and merchants to migrate

But the other side of these markets is: highly localized, strong regulatory differences, and high operational requirements. What they need is not "smartness," but long-term deep cultivation.

When I truly put these opportunities together, I had to face a clear conclusion: payment is 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 pressure testing

• Credit accumulated after repeated negotiations in regulatory environments

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 do not stand on the waterway, where else can I stand to continue participating in this ongoing structural change.

4. After I Decided Not to Continue with Payments

When I truly made the decision to stop pursuing Web3 payments, there was no strong sense of "finality." It felt more like a phase of exploration had finally reached a point where it should stop. I have not left this industry. I have merely shifted from trying to stand on the waterway to observe how the water flows and ultimately where it flows to.

In the repeated disassembly of the payment structure, one judgment became increasingly clear: payment addresses the flow problem, whether money can move and how quickly it can move; but what truly determines long-term value is never the flow itself, but rather—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. Payment is just the entrance, the balance is a transit station, and what truly forms scale and barriers is the subsequent fund management and asset allocation system. Yu'ebao, Tiantian Fund, Tianhong did not succeed because they "did payments better," but because they stood behind payments, accepting and reorganizing the already scaled fund flows.

Payment is the entrance, but not the endpoint. Putting 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, composite products… they resemble on-chain money market funds, short-term bond funds, and stable allocation tools. The real problem is not "whether there are assets," but rather: most people do not know what risks they are facing and lack an entry point to understand, compare, and judge these assets.

As more and more funds begin to flow on-chain, this problem will only become more pronounced. It was at this juncture that I began to realize: if I do not continue with payments, I can still stay in 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 attempt to persuade anyone to enter or exit; it is merely an attempt to clarify why I chose not to continue with payments. I hope it can provide some reference for those who come after, perhaps helping them avoid some detours.