Entrepreneur's account: Why did I give up on Web3 payments?

Author | Yokiiiya

Over the past six months, I went from being a bystander in Web3 to immersing myself in the payments industry. Now, I’ve decided to stop and no longer pursue Web3 payments.

This isn’t a retreat after failure, but a strategic adjustment after truly engaging in the field. During this time, I visited Yiwu, Shui Bei, Putian, and even Mexico—observing the most bustling areas in those reports to understand how payments are actually made. I got hands-on experience building an MVP for Web3 payments, took over accounts, developed Web3 payment tools, and tried to run the entire process from the initial idea to the final step.

But the deeper I went, the clearer one thing became: this isn’t an industry where “making a good product equals winning.” Payments are not about features; they depend on banking relationships, licenses, capital efficiency, and long-term risk management capabilities.

Many seemingly “profitable” payment businesses are not earning through capability premiums but through risk premiums—just until something goes wrong. What truly determines how far a payment company can go isn’t how much money it makes, but whether it can withstand risks and survive before those risks become apparent.

This article isn’t meant to dismiss the industry but to remove the filters, lay out the real structure, and leave future entrants with a clearer judgment. (A few weeks ago, I also recorded a podcast with former Kun Global VP Robert, Nayuta Capital CEO, and former Didi Financial CEO Alex, discussing similar issues.)

1. Why did I step into Web3 payments?

As a serial entrepreneur, I ended a multi-year startup last year. During the shutdown, I took some time to rest and reflect, stepping back to a more “clear-headed” position to consider where to focus my energy next.

Six months ago, a friend invited me to Hong Kong to explore Web3 payment-related startups. At that time, I wasn’t very familiar with Web3 itself, nor did I have much insight into the payments industry. But from a macro perspective, it was clearly a large and still-growing industry, with potential for integration with AI.

In previous ventures, we worked on cross-border business and platforms for remote work. In these experiences, I repeatedly encountered the same reality: business can go global quickly, but capital flow always lags. Slow settlements, fragmented pathways, opaque costs, uncontrollable billing cycles—these issues might be manageable with experience and patience at small scales, but as the business grows, they aren’t solved by “management skills” but only magnified. Money cannot flow freely like information; this itself is an invisible ceiling for many globalized businesses.

Against this backdrop, when I systematically studied how Web3 payments are used in clearing and settlement, I saw not an abstract technical narrative but a solution that directly addresses these pain points: faster settlement, higher transparency, and near-24/7 clearing capabilities.

At that time, it seemed like a direction that could solve real problems and was Day 1 Global— not because I was interested in Web3 per se, but because in the specific scenario of payments, it appeared to offer a better structure—at least logically—enough to potentially address long-standing frictions that have been ignored.

But looking back now, I realize that many of us, including myself, initially assumed a premise that reality would later challenge: as long as clearing and settlement efficiency is high enough, payments will naturally migrate onto the chain. It was further simplified into an intuition— that payments are just matching transactions, and once the process is streamlined, cash flow can be “handcrafted.”

Due to my limited understanding of Web3 and the payments industry, I decided to spend three months deeply exploring this field, understanding its structure thoroughly, and then deciding what to do and where to position myself.

2. Payments have never been about product alone

When I arrived in Hong Kong, my initial plan was simple. The idea was straightforward: leverage existing resources and relationships, start with OTC or relatively simple payment scenarios, get cash flow running, and then determine the next steps based on real needs.

I wasn’t there for research or long-term observation but to see if I could build a working solution first and then calibrate the direction through real business.

But soon, an obvious external acceleration occurred. In May, the US passed the GENIUS Act, igniting the entire industry overnight. Capital, projects, entrepreneurs flooded in, and Web3 payments shifted from a niche infrastructure topic to a frequently discussed “new opportunity.” From an external perspective, this was positive; but for a startup just entering the scene, this sudden buzz was more of a distraction.

The more chaotic, noisy, and consensus-driven the moment, the easier it is to obscure the real issues. Large internet companies, financial institutions, banks, traditional Web2 payment firms, and Web3-native teams all entered, talking about opportunities but rarely discussing structure. I felt it was even more necessary to go deep on the ground and truly understand the industry.

The “buzz” in reports and the reality on the ground are not the same.

Once I started engaging directly, my first step was not to optimize product features but to ask: who is actually using Web3 payments? Why? Where? I first visited Yiwu, often cited in reports as a “scaled” example of Web3 payments.

In many studies and reports, Yiwu is portrayed as a representative of “Web3 payment’s large-scale application.” But when I went there, I saw a different picture. Stablecoins do exist, but mostly as scattered, relationship-driven, behind-the-scenes usage.

It’s not like the reports describe—a standardized, productized settlement method that can be easily replicated. Many transactions aren’t driven by “efficiency.” I then visited Shui Bei, Putian, and Mexico, and also looked into penetration in Africa, Argentina, and other regions. The situation was not fundamentally different.

Web3 payments are not absent but have not yet formed a stable, scalable main pathway. More often, they are just “patches” embedded within existing systems. The actual penetration rate doesn’t match the hype we see in reports, communities, and discussions.

But through these conversations, I gradually shifted my perspective from “Can we build a product?” to “What is the industry structure itself?” I began to realize that the incremental market for stablecoins might not be inside the “crypto circle” but in the existing Web2 world—long-slowed by traditional clearing and settlement systems.

This isn’t a narrative shift but a slow upgrade of financial technology. Meanwhile, problems surfaced: if real usage is so fragmented, can a productized path really stand?

3. When we start building applications, all roads lead to one place: channels

From July to September, I continued on-site research and began systematically engaging potential clients. HR firms, insurance, travel, MCN agencies, trade services, cross-border businesses, gaming companies… needs varied, but the core issue was consistent: money should flow faster, cheaper, and more stably.

Payroll, task settlement, B2B payments—these scenarios are logically well-suited for stablecoins. Initially, we thought the application layer could be a good entry point. But soon, an unavoidable premise emerged: you must have a stable, compliant, sustainable fiat ⇄ digital currency channel.

We started connecting with several promising service providers, but real experience showed that none of these channels were “long-term reliable.” To meet business needs, we even tried to build our own channels, but once we got into it, we realized: this isn’t a product problem but an infrastructure problem.

Bank relationships, licensing structures, KYB/KYC compliance, risk control, quota management, regulatory communication—all these heavily depend on long-term trust, experience, and capital. These aren’t capabilities that a small team with an internet background can quickly develop.

It was here I first truly understood: payments are not just a “build a good product and win” industry.

4. You think you’re making money, but you’re actually eating risk premiums

This realization hit me hard: in payments, it’s not about how much you earn but how much you can spend. Many “working” Web3 payment paths are not driven by capability premiums but by risk premiums.

The more dangerous part is that many don’t even realize what risks they’re bearing or where those risks are hidden.

· Is it the compliance of trading partners?

· Is it the mismatch in fund pool structures?

· Is it lagging risk control rules?

· Or regulatory gray areas?

If a business’s viability relies on “nothing going wrong,” then it’s not a resilient structure for long-term scaling.

5. The essence of payments is a “water flow” business

Gradually, I started viewing payments through a simpler lens: it’s a “water flow” business. Whoever controls the water channels makes money; the larger the water flow from the tap, the greater the profit potential. If water passes your door, you can take a cut— it sounds like an almost “easy money” business.

But because of this, payments are never simple. Not all “water-side” companies can profit. Long-term profitable payment companies are those with strong control over flow volume, pressure, backflow, pollution, and leaks.

How much water you can handle depends on your risk tolerance; how long the flow lasts depends on your compliance, risk control, and regulatory resilience. Many paths that seem to have “huge flows” are just temporarily unblocked. This realization deepened my respect for the industry’s complexity and honesty.

Its appeal isn’t about who creates a new product but about how honestly it reveals where real profits are— which industries are truly making money and which are just loud.

From the water channels, you see where the real capital is flowing, not just who PRs the loudest outside.

6. Payments are good business, but not necessarily a business we can excel at

At this point, I have to face an important but tough judgment for entrepreneurs: payments are a good business, but not one we are best suited to. This isn’t a negation of the industry but a respect for resource endowments.

What the industry truly needs isn’t rapid trial-and-error or iterative product development but long-term stable banking relationships, sustainable compliance systems, mature risk control, and trust built through repeated regulatory battles. These capabilities aren’t “something you can just try to do,” nor can they be quickly assembled through cleverness or effort. They are more like industry-level assets that develop gradually within specific teams and timeframes.

Once I see payments as a “water flow” business, I realize that whether a team can survive long-term depends not on desire but on whether it has the infrastructure to withstand pressure.

Under this premise, pushing forward becomes less about rational investment and more about using time and luck to contend with an industry structure that isn’t on our side. This realization led me to my next decision.

3. I still believe in payments, just with a clearer understanding of its true battleground

It’s important to clarify that my decision to stop Web3 payments isn’t because I’m bearish on the industry. On the contrary, over the past six months, I’ve become increasingly convinced that the structural opportunities in payments remain significant.

But when I break down these opportunities, I also see a harsher but equally vital truth— that payments are a long-cycle, heavily structured, resource-intensive business. The opportunities exist but are not evenly distributed among all startups.

Incremental growth in payments isn’t about short-term gains but about long-term reconstruction.

If we look at it with a longer horizon, cross-border payments aren’t about “whether it will explode” but about ongoing infrastructure rebuilding. The continuous spillover of global supply chains, growth in cross-border trade, and accelerated distributed team collaboration are magnifying friction in traditional clearing systems.

In this process, the value of Web3 payments isn’t in “cost savings” but in three areas: significantly improved turnover efficiency; transparent clearing pathways; and unified settlement across currencies and regulatory zones.

This is a structural improvement, not just tactical optimization. Because of this, it’s a multi-decade project, not a market that can be shifted by a product sprint.

4. The real challenge isn’t “receiving money,” but the capital system within marketplaces

After engaging with many real-world scenarios, I increasingly realize that the difficulty in payments isn’t in “receiving money” itself. Especially in marketplace scenarios, payments are never just a standalone component but part of a comprehensive ecosystem-level capital system.

Buyers, sellers, platforms, logistics, streamers, delivery personnel, tax authorities, frozen accounts, subsidy accounts—all roles are interconnected within the same capital chain. In such systems, the real barriers aren’t the payment interface but mechanisms like escrow and freezing; split accounts and billing cycles; risk control and anti-fraud capabilities; cross-regional compliance and regulatory obligations.

Once these systems stabilize, they naturally have room to extend into financial capabilities. But they also demand high levels of team capital strength, risk management, and long-term patience.

5. Web3 payments aren’t a front-end revolution but a back-end upgrade

Over these six months, I’ve become increasingly certain: mass adoption of Web3 payments won’t happen at the user interface level.

It won’t explode because users start actively using wallets; instead, it will happen because enterprise back-end systems upgrade their treasury, reconciliation, cross-border settlement, and fund pool management.

In other words, the main path is: front-end Web2 remains unchanged, while back-end Web3 is reconstructed. This is a “hidden” upgrade, relying more on system stability, compliance certainty, and long-term operational capacity than on market education.

The real breakout isn’t in the most mature markets. Geographically, the incremental opportunities are more likely in Latin America, Africa, the Middle East, and South Asia—regions with severe fragmentation, high costs, complex pathways, and stronger user and merchant migration willingness.

But these markets also feature high localization, strict regulation, and operational demands. Success there requires not “smartness” but long-term dedication.

When I consider these opportunities together, a clear conclusion emerges: payments are indeed a good business, but the resource endowments needed—

· Long-term stable banking relationships;

· Mature, sustainable compliance systems;

· Resilient risk control capabilities;

· Trust built through repeated regulatory battles—

are beyond our current team’s capacity. This isn’t a negation of the industry but a respect for reality. The battlefield of payments still exists, but it’s no longer beneath our feet. Based on this judgment, I chose to pause and reflect: if I’m not on the water channels, where else can I participate in this ongoing structural change?

4. After deciding to stop Web3 payments

My decision to cease Web3 payments wasn’t driven by a sense of finality. It felt more like a phase of exploration reaching a natural stopping point. I haven’t left the industry; I’ve simply shifted from trying to stand on the water channels to observe how water flows and where it ultimately goes.

Through repeatedly dissecting the payment structure, one conclusion has become increasingly clear: payments address liquidity—whether money can move, how fast it moves—but the true long-term value depends on where the money stops and how it’s managed afterward.

Looking back at China’s fintech development over the past two decades, this logic is very clear. Payments are just the entry point; balances are transit points; the real scale and barriers come from the subsequent capital management and asset allocation systems. Yu’e Bao, Tiantian Fund, Tianhong—these weren’t successful because “payments were better,” but because they sat behind payments, receiving and reorganizing the already scaled capital flows.

Payments are the gateway, not the destination. When applying this structure to Web3, I see similar issues emerging. On-chain, there are many stable, prudent asset forms— lending, short-term RWA, neutral strategies, diversified products— more like on-chain money market funds, short-term debt funds, and stable allocation tools. The real problem isn’t whether assets exist but that most people don’t understand the risks they face or have a way to comprehend, compare, and evaluate these assets.

As more capital flows on-chain, this problem will only intensify. At this point, I realize that even if I stop doing payments, I can still stay involved in this transformation differently. Not by competing over the water channels but by clarifying the water flow structure, exposing boundaries and risks, and helping people understand where to stay and where to be cautious. This will be the direction I and my team continue to explore.

This article isn’t about concluding Web3 payments or advising anyone to enter or exit. It’s simply about explaining why I chose to stop. I hope it offers some reference for others and helps avoid some detours.