PayFi Open Mic No.1: Web3 and Internet Giants, Payment Alliances and Concept Implementation
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PayFi Open Mic No.1: Web3 and Internet Giants, Payment Alliances and Concept Implementation
PayFi is the reimagining of traditional payments in the Web3 world through blockchain.
Navigating Web3 tides with focused insightsBy: Will Awang
From late 2024 to early 2025, a new term—"PayFi"—quietly emerged within the crypto community.
Initially, it was seen as a "narrative rebranding" by the Solana community—crypto payments layered with liquidity and interest rate models, essentially DeFi under a new name. But as builders deeply experienced in payments joined the conversation, this seemingly recycled concept began taking on more practical, infrastructure-level significance.
PayFi is no longer just "a story made up to launch a token," but rather the blockchain-powered reconstruction of traditional payments within the Web3 world.
This Open Mic session invited practitioners and thinkers from the front lines of PayFi, including:
• Will (@Will_7th): Web3 lawyer involved in multiple payment projects, focusing on stablecoins, payments, tokenization, and RWA.
• Kay (@portal_kay): Web3 product manager with experience in GameFi and BTC ecosystem projects; believes in the application value of stablecoin payments and hopes to build products with real-world impact.
• Claudio (@Clllau_dio): Co-founder of KODO, formerly at ByteDance International Payments, focused on fintech, building the next decade’s enterprise-grade digital cross-border payment platform.
• Sky (@skyhan_eth): Co-founder of ROZO,深耕加密原生收单领域 (deep in native crypto acquiring), formerly at American Express handling issuer partnerships, inspired to build low-friction, user-friendly acquiring solutions after a poor Bitcoin payment experience in Tokyo in 2019.
Four seasoned professionals in crypto payments gathered for nearly three hours of deep discussion around four core themes: “What is PayFi?”, “The moves of tech giants”, “The future of crypto payments”, and “Collaboration models for payment alliances”.
1. What is PayFi?
A New On-Chain Payment Species Through the Eyes of Four Frontline Builders
"PayFi isn't just another repackaged financial term—it represents a natively on-chain fusion of payments and finance." At the beginning of this Open Mic, several industry builders expressed similar views—PayFi might be Web3’s most tangible financial infrastructure innovation yet.
Sky: An On-Chain Credit Revolution From Supply Chain Finance
Sky spoke first, deconstructing PayFi both technologically and contextually.
"Although Lily from Solana recently popularized the term PayFi, its prototype existed long before." She pointed out that early forms of PayFi can be traced back to traditional supply chain finance: pay first, settle later—a financial structure built on time and credit.
She divided payment use cases into two categories: consumer-facing (to Consumer) and business-facing (Business to Professional). Most active projects today focus on the B2B side, such as supply chain platforms offering working capital and settlement pools. But Sky believes the real potential lies in the consumer side.
"Credit cards are the most successful example of consumer PayFi—they existed before the internet and remain one of the greatest financial innovations since WWII." Sky lamented that no true "crypto credit card" has emerged on-chain yet, but this also signals massive opportunity. Rebuilding a credit system on-chain could allow users without bank accounts or government IDs to enjoy buy-now-pay-later experiences and create a crypto-native merchant network—the kind of model that could genuinely challenge Visa.
Claudio: Turning 'Financial Services' Into Plug-and-Play Modular Components
"When people hear PayFi, their first thought is often just a payment channel," Claudio said directly. "But if PayFi only changes the settlement method, it's merely Web3 payments—not PayFi."
In his view, the key innovation of PayFi is making roles, capabilities, and profit mechanisms from traditional financial services more efficient through blockchain’s global liquidity, turning them into modular, composable, plug-and-play components.
Claudio shared real-world examples from his work: his team serves traditional enterprises, especially Chinese businesses expanding overseas. Their biggest pain points aren’t payment interfaces, but inefficient cash flow, high financing barriers, and heavy upfront funding pressure. Traditional institutions offer limited support to SMEs, while blockchain and stablecoins provide open, flexible access to interest-bearing capital pools, breaking the deadlock between advance payments and receivables.
Kay: To Retail Users, 'PayFi' Is Just 'Web3 Payments'
Different from Sky and Claudio’s technical perspectives, Kay defined PayFi from a retail user standpoint.
"To insiders, 'Fi' means Finance, but to average users, it’s just a Web3 label," Kay noted. This semantic gap creates a form of 'misunderstanding-driven adoption'—any project using blockchain and touching payments gets labeled 'PayFi' by users.
She compared it to GameFi and SocialFi: 'Fi' has become a categorical tag, not strictly meaning 'finance'. This makes PayFi ambiguous in communities—it could refer to a payment tool, a capital pool, or even a token-launching scheme disguised as payments.
Kay added that many Web3 payment teams are actually building real B2B solutions, but due to long product cycles and unglamorous narratives, they rarely gain attention. Meanwhile, projects focused on hype and pre-launch marketing attract disproportionate visibility.
"That’s why I hope the PayFi conversation connects more 'real builders' with 'genuine payment-focused users'," she said. "If we can’t reach consensus, PayFi might just become another corrupted 'Fi' narrative."
Will: PayFi Is the Blockchain 'Financial Lego' That Dismantles Alipay
"Many people look at PayFi just to find a coin to trade. But most real PayFi projects won’t even issue tokens," Will said lightly, yet hitting a nerve in the industry.
He pointed out that many PayFi projects riding Solana’s hype are built on on-chain pools and interest models, trading on the 'time value of money'—essentially financial operations wrapped in a payment narrative. While impure, this kind of packaging has accelerated PayFi’s ecosystem growth.
But for Will, PayFi’s true value isn’t speculation—it’s deconstruction.
"If Alipay is a closed monolithic platform, PayFi breaks down each financial service into Lego-like modules and opens them up. Any developer can then build their own blockchain version of Alipay."
He believes PayFi’s most explosive potential lies with users who lack traditional bank accounts but have reliable internet—residents of smaller nations in Africa, Asia, Latin America, Web3 natives, AI agents, and other non-traditional users.
"These people don’t need banks—they just need a wallet. As long as they can receive, spend, borrow, and repay, PayFi becomes their bank," Will emphasized. "The C-side is PayFi’s endgame and valuation logic. Once a project captures user financial behavior, it gains credit data and can offer lending, payments, wealth management—this story is too compelling to ignore."
This is the real PayFi as seen by these four builders: not a buzzword, but a systemic transformation—decoupling from traditional finance and reconstructing it on-chain. Each sees a different facet, but all point toward the same future: a world where no one needs a bank, yet everyone can have banking.
2. When Internet Giants Invade PayFi: Are Startups Being Crushed or Carried?
When names like Stripe, Visa, OKX, and Coinbase start appearing in PayFi-related headlines, many founders feel immediate pressure.
"Every time I see CeFi (centralized finance) making moves, I feel my runway shrinking," Claudio joked bitterly. Then he added: "But their aggressive moves show they’re nervous too."
This debate on "giants entering, startups surviving" became the most intense and honest part of the Open Mic.
Stripe, Visa, Coinbase: What Are They Really After?
Sky cut straight to the point: Stripe and Visa’s "open card issuance" initiatives directly threaten middleman models. "A friend running a U-card overseas shut down the product the day after Visa announced its move," she said, leaving the room silent.
U-cards and similar intermediaries used to connect users to Visa/Mastercard networks for crypto spending. But when Visa and Stripe open direct card issuance, these middlemen get instantly cut out.
Meanwhile, the rise of stablecoins quietly undermines traditional banks. "Stablecoins are banks now—just with deposits on-chain," Sky stated bluntly. Visa and Mastercard still control merchant networks, their last stronghold. But whether they’ll be bypassed is now an obvious trend.
Kay added a consumer perspective: "OKX’s recent OKX Pay claims to be consumer payments, but V1 feels more like a social app—P2P transfers, group chats—nothing like real payments." He stressed that payments are fundamentally consumption behaviors requiring real-world context. Transfers between wallets alone can’t sustain a consumer payment ecosystem.
In contrast, Coinbase’s X402 protocol caught Kay’s attention. "It’s an elegant, simple, practical on-chain micro-payment protocol designed for AI agent needs," he praised. Use cases at the B2B and machine level precisely leverage crypto payments’ core advantage: ultra-low friction cross-border micropayments.
How Can Startups Compete With Giants?
"If you can’t beat them, join them," Claudio joked. Then he added seriously: "As infrastructure startups, our only path is to deliver results fast in our niche. Whether we get acquired or co-build later, survival comes first."
He cited Stripe: dominant globally, yet never operated alone—instead, it grew by integrating regional payment solutions. "No local player can defeat Stripe, but Stripe also can’t operate without local partners," Claudio said.
Sky believes startups’ real opportunity lies in areas giants are unwilling or unable to touch. "Visa and Stripe excel at connecting merchants and consumers, but they avoid on-chain advances, credit, and interest models."
These are where startups can break through. She highlighted the idea of an "on-chain credit card." "Today’s U-cards are just prepaid cards, not real credit cards. If we can grant credit based on on-chain data—even small limits—it would be revolutionary."
Giants Have 'Capital Moats'; PayFi Builds 'Liquidity Moats'
Will offered a deeper structural analysis.
"Visa, Mastercard, Stripe—these giants rely on capital-built network effects," he said. "But if PayFi succeeds, its moat won’t be capital—it’ll be liquidity."
On-chain pools, lending, and advances are all about "capital liquidity." Build an efficient, transparent liquidity network on-chain, and users, merchants, and developers will naturally flock to it—not because of Visa’s brand trust, but because the system works better.
"Giants will keep competing on KYC-based card issuance and off-chain spending records, but on-chain is a new battlefield," Will asserted. "PayFi shouldn’t fight them on their turf—it should erode their core value by dominating the new赛道 of on-chain liquidity."
Sky added: "For years, the hardest part of building payments wasn’t users—it was solving the ‘last-mile’ liquidity. PayFi makes capital movement simple and transparent—that’s what truly scares the giants."
The consensus on "giants entering PayFi":
• Giants will strengthen their moats in merchant networks, card issuance, and payment rails—the "entry-level" capabilities.
• Startups and the PayFi ecosystem must focus on rebuilding underlying liquidity, decentralizing credit, and capturing emerging scenarios like machine economies and micropayments.
Giants care about the "face" of payments; PayFi wants the "substance." Claudio’s final remark lingered: "We’re not competing with giants—we’re seizing a market they either can’t see or pretend not to."
3. Will Crypto Payments Ever Go Mainstream?
The Reality Behind Mass Adoption
"Mass Adoption" is a dream every crypto practitioner loves to mention. But what does real adoption mean? Hype on crypto Twitter? Waves of Memecoin FOMO? Or simply paying for coffee on the street with USDC?
This Open Mic hosted a rare pragmatic discussion on "Mass Adoption of Crypto Payments."
Claudio: Don’t Mythologize Stablecoins—They’re Just Upgraded Cross-Border Payments
"I believe in Mass Adoption—but it depends on definition," Claudio said, ever the realist.
To him, stablecoins’ advantages in enterprise cross-border payments are undeniable:
• Lower costs, faster speed, greater transparency.
• Cross-border clearing is far more efficient than 50–60-year-old banking systems.
"But this doesn’t mean stablecoins will replace local payments everywhere," he stressed. In countries like China, India, and Singapore, local payment systems are already mature and efficient. Even developing nations like Mexico have little incentive—local systems work fine.
Only in countries with extremely weak financial infrastructure do stablecoins have structural opportunities. And even then, blockchain may not be the answer. "Centralized solutions like digital yuan aren’t necessarily worse than blockchain," Claudio concluded. "Stablecoins will be part of the payment landscape, but never the sole endgame. The future will be multi-currency, multi-form coexistence."
Sky: Quantify Scale, Qualify Penetration—Don’t Be Fooled by Crypto’s Fake Adoption
"Mass Adoption of crypto payments requires both quantitative and qualitative measures," Sky proposed a set of "hard metrics":
• Quantitatively, stablecoin market cap must reach trillions—approaching USD M0 scale—for real adoption. Currently, it’s still in the hundreds of billions.
• Qualitatively, real-world penetration matters: "In a place like Argentina, if you ask ten people on the street, at least two or three should be using stablecoins—that’s real adoption."
Two key drivers:
• Friction in payment methods: In credit-card-dominated markets like the US and South America, transaction fees exceed 10% for small payments—a clear pain point.
• Currency depreciation: In high-inflation countries like Argentina and Turkey, demand for stablecoins goes beyond "payment innovation"—it’s survival.
"You don’t need to educate users—life forces them to adopt," Sky said plainly.
But she warned: policy openness (like Milei’s free-market reforms in Argentina) and merchant Web3 integration costs are the final hurdles to mass adoption.
Kay: Two Paths to Mass Adoption—Top-Down vs. Bottom-Up
Kay approached Mass Adoption through "pathways":
• Top-down: Government-led, systemic upgrades.
• Bottom-up: User-driven, grassroots adoption.
Singapore exemplifies top-down: its "SingPass" identity + payment system uses blockchain.
Powerful in function, but Kay noted it relies heavily on local identity—tourists and foreigners can’t even enter.
"Top-down adoption delivers fast results, but the benefits don’t go to users," Kay argued. Systems lacking intrinsic incentives and flywheel effects remain "government tools." In contrast, bottom-up adoption in Argentina and Turkey shows more vitality. With fiat devaluation and broken trust, users turn to stablecoins as value anchors. She shared a real case: Turkish restaurant workers converting salaries to USD or USDT immediately upon receipt.
"Mass Adoption of crypto payments will ultimately combine both paths," Kay concluded. "But the self-sustaining snowball effect—the one that truly benefits users—comes from the bottom-up route."
Will: Crypto Payments’ Moat Is Moving 'Off-Chain Data' On-Chain
Will offered a "data accumulation" take on Mass Adoption.
"Crypto payments’ real value is turning off-chain spending into on-chain credit history," he said. Traditional payment giants own payment data and credit scoring. Crypto’s chance lies in rebuilding data and trust via blockchain.
His team designed an incentive mechanism:
• Users earn points for on-chain payment transactions.
• Points can later be redeemed for tokens, creating a "use and earn" flywheel.
• Merchants, individuals, and projects all gain real rewards from driving adoption.
"Early B2B projects fail because initial users get nothing—they’re just using tools. But if early users share in the upside, C-enders stop being mere users and become ecosystem builders," Will explained.
Sky shared a real case from a network state community:
• Less than 200 members.
• Weekly on-chain spending leaderboards.
• Users actively recruit merchants to accept crypto payments to climb rankings.
This self-driven "use and earn" momentum makes adoption organic.
"Visa, Stripe—they never share profits with users," Will smiled. "If Web3 can make this 'use and earn' model work, Mass Adoption of crypto payments finally becomes meaningful."
The Mass Adoption discussion reached a clear conclusion:
• It won’t happen automatically—requires dual catalysts: payment friction and currency demand.
• Not dependent on any single technology—stablecoins, on-chain data, and incentives are all essential pieces.
• It’s a fusion of business models and ecosystem flywheels.
Mass Adoption of crypto payments isn’t just new tech replacing old systems—it’s ordinary people reclaiming power over wealth and credit.
Claudio’s closing line captured it: "Mass Adoption isn’t about crypto changing the world. It’s that the world already has problems—and crypto happens to solve them."
4. Payment Alliances: Breaking Giants’ Moats—A Decentralized Fight for Survival and Co-Creation
"The payment industry is inherently an alliance-driven game."
In the final segment, Sky didn’t frame "payment alliances" with startup heroics, but as a life-or-death cooperative game.
She illustrated: "Even if Visa drops credit cards and fiat settlement, as long as the name stays, it’s still Visa. Brand is its ultimate moat." How can new Web3 payment projects build their own moats in a world where tech is easily copied and ecosystems instantly hijacked?
Answer: Alliance.
Sky: Brand Is the Ultimate Moat—Alliance Is the Only Way for Small Teams to Become a 'Big Name'
"Technology and markets change, but brand builds trust," Sky stressed. The value of payment alliances isn’t just "resource pooling"—it’s shaping user perception so that "crypto payments = these brands".
She shared ROZO’s experience in a network state community:
• A small physical community (under 200 people).
• Weekly on-chain spending leaderboards—top users proactively recruit merchants to accept crypto payments.
• A real "use and earn" flywheel forms between merchants and users.
"This isn’t about hype—it’s habit-building," Sky said. The role of alliances is to replicate such "real adoption in small settings" at scale, so users, merchants, and projects all benefit from ecosystem growth.
"Only by collectively 'making it happen' can individual brands evolve into 'Visa-tier' mental associations," Sky concluded.
Claudio: Alliances Aren’t Just Huddling for Warmth—They’re a B2B Market Necessity
Claudio grounded the alliance logic in real B2B needs.
"Payments have never been a solo game." He cited Stripe’s global strength—built through continuous collaboration and aggregation with regional payment providers. "No payment company can dominate every local market worldwide," he said.
His team lacks expertise in operations, marketing, and branding. The fragmented nature of PayFi demands collective voice and co-branded presence.
Claudio noted that B2B projects in crypto are now actively building communities and brands—"Projects like Huma and BlackHorse, which never needed consumer outreach, now enhance ecosystem influence through branding."
This "B+C dual engine" is especially crucial in payments.
"An alliance is a 'co-branding entity.' When users trust the alliance, enterprise clients will too," Claudio said.
Will: Using Web3 Incentives to Turn C-End Users Into 'Business Partners'
"We’re not building a simple alliance, but a decentralized alliance powered by Web3 incentives," Will reframed the concept with authentic crypto flavor.
His team is designing a tokenomics model where:
• Actions promoting on-chain payments earn alliance points.
• Points can be redeemed for tokens and privileges.
• Payment channels, merchants, developers, and early users—all contributors to on-chain payment growth—deserve rewards.
"Traditional giants keep all profits inside the platform. But crypto payments can use tokenomics to distribute growth value to every participant," Will said. This not only motivates C-end users but solves the "incentive gap" that plagues early B2B adoption.
He emphasized: "PayFi projects aren’t issuing tokens for the sake of it—they’re creating a net-positive usage loop where users, merchants, and builders all gain real returns."
Kay: The Core of Alliances Is Reducing 'Trust Cost'
Kay identified the fundamental value of payment alliances from a user cognition angle: "An alliance is essentially a 'trust proxy'."
For average users, crypto payments aren’t technical issues—they’re about trust:
• Trust in security.
• Trust in liquidity.
• Trust they won’t get 'rug-pulled' after using it.
An alliance builds a bridge of "shared risk and shared reward" among users, merchants, and projects.
"Rather than fighting separately, let’s raise a common banner," Kay said. "Brand is the most expensive resource—and alliances are the fastest brand amplifier." She added that alliances aren’t just tech and branding—they’re infrastructure lowering entry barriers for merchants and users.
"For a merchant, adopting crypto payments alone means high learning costs, compliance risks, and user education burden—enough to scare anyone off. But with a standardized alliance solution, they only need to trust the 'alliance brand' to onboard at low cost," Kay explained.
Summary: Alliances Are the People’s Weapon Against the Visa Model
The discussion on "payment alliances" boiled down to a simple logic:
• Visa and Stripe’s core moats: "network effects + brand trust".
• Individual PayFi projects stand little chance alone.
• Alliances are the decentralized way to rebuild "network effects + brand trust"—a weapon of the people.
• Tech is ready; the race is now: "Who can make users trust you first?"
5. Final Thoughts
The significance of PayFi isn’t just rebranded DeFi—it’s putting spending users on the revenue side for the first time. Previously, payment network profits belonged solely to giants like Visa and Stripe. On-chain, every payment and use case contributes to network value and deserves a share of the upside. PayFi aims to turn payments into a "the more you use, the more you earn" co-creation game—transforming C-end users from mere consumers into ecosystem beneficiaries.
In PayFi, spending is no longer just an expense—it’s assembling your own piece of the Visa puzzle, building a personal block of "financial Lego" that anyone can own.
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