10,000 words exploring Web3 payments: Web3 transformation for consumer cross-border payments
Blockchain platform
Consumers' cross-border payment habits are constantly changing: people are trying multiple payment methods, but are still looking for better options. As VISA Ryan McInerney said: "In the past five years, payment methods have changed more than in the past 50 years." Today, with the continuous development of blockchain technology and digital currency, the deeper changes in payment methods are actually changes in accounting methods - blockchain, an open and transparent global public ledger. Changes in human accounting methods have only occurred three times in thousands of years, each of which has profoundly shaped the economic form and social structure, and each breakthrough reflects the co-evolution of technology and civilization. Single-entry accounting in the Sumerian period enabled humans to break through the limitations of oral communication for the first time, promoting the formation of early trade and countries; Double-entry accounting promoted the commercial revolution in the Renaissance, promoted the emergence of banks and multinational companies, and the establishment of commercial credit; Distributed accounting driven by Bitcoin in 2009 has led to changes in decentralized finance, trust mechanisms, and the rise of digital currencies. This far-reaching change will not happen overnight, but is constantly evolving. It has also led to Web3 payments based on blockchain and digital currency. This new payment method is constantly penetrating into all aspects of real society.
Therefore, this article uses the consumer cross-border payment survey report recently released by VISA, and uses market cases to propose solutions for Web3 payments for the main scenarios of current consumer cross-border payments, and finally sees where the future of Web3 payments will be.
The full text is 15,000 words, enjoy below:
1. The growing cross-border payment market
The cross-border payment market is experiencing explosive growth, driven by the surge in cross-border e-commerce, cross-border travel, and cross-border remittances. Consumers are making cross-border payments more frequently than ever before, and the Bank of England expects that by 2027, the related payments will reach $250 trillion.
Consumers around the world are accepting cross-border payments, and today consumers spend more on cross-border transactions than ever before, but what is really interesting is its frequency. 30% of people shop online through cross-border e-commerce every week, 45% send and receive remittances every month, and 66% travel abroad every year.
Normally, people will form habits to make routine decisions easier and more efficient, but in the field of cross-border payments, this habit has not yet been formed. On average, they will use 4 out of 7 different payment methods, and only 16% of consumers will always use the default payment method.
At present, it seems that no payment method can fully meet consumers' needs for cross-border payments, although nearly 80% of consumers still use traditional banks for cross-border payments. But consumers are very clear that they need a secure and trustworthy cross-border payment provider.
Between June 2023 and June 2024, a total of 771 million people made cross-border transactions. VISA's research shows that this growth is driven by three transaction categories: e-commerce, travel and remittances.
1.1 Main scenarios and methods
A. Cross-border e-commerce
Eight out of ten consumers choose to shop through cross-border e-commerce, and 67% of them make cross-border purchases every month. According to the report "Global Trends in B2C E-commerce and Online Payment Innovation in 2024", the global B2C e-commerce market size is expected to exceed US$8.3 trillion by 2026. Today, it is no longer difficult to find the desired products around the world, but the convenient payment experience still needs to be improved. Consumers are eager to obtain simple, easy-to-use, safe and reliable payment methods to successfully complete every cross-border purchase.
B. Cross-border travel
Two out of every three people have cross-border travel experience, and 52% of them travel more than once a year. According to the 2024 travel trend, the biggest purpose of people's travel is to relax and relieve stress. Therefore, the last thing travelers want is stress or worry when shopping. They need a simple and secure payment method so that they can fully enjoy their travels.
C. Cross-border remittances
Four out of ten people use cross-border remittance services, and 45% of them make remittances every month. Despite the complex geopolitical situation, the number of international migrants continues to grow, and the cross-border remittance market is expected to exceed US$1 trillion by 2028. This trend has also driven the increasing demand for people to send money to relatives and friends at home. Consumers are in urgent need of a safe and reliable way to remit money across borders.
Of the following seven cross-border payment methods, the average consumer uses four:
Electronic payment methods;
Credit or debit card;
P2P transfer;
Bank transfer
Online transfer;
Prepaid traveler's cheque/card;
Cash.
1.2 Why now is the right time to offer cross-border services to consumers
The cross-border transaction market is large and growing. This is a critical stage in the development of cross-border transactions. More and more consumers are making cross-border payments frequently, but traditionally, these transactions have been slow, costly and lack transparency. However, this can all change.
Consumers currently use multiple payment methods. Each consumer is trying a variety of different payment solutions, actively looking for the best one for them. But they have not yet found the ideal one. They are eager for more choices and want guidance to help them make informed decisions. As consumers begin to form habits that may last a lifetime, now is a critical time to influence their choices.
Consumers need stable payment habits and reliable partners. As banks and fintech companies realize the potential of becoming consumers' preferred cross-border payment method, market competition will intensify. This is not only an opportunity to attract new customers through new services, but also an opportunity to retain existing customers' cross-border consumption through a one-stop solution. But at the same time, there is a risk that other competitors will get ahead of them.
The foundation of trust cannot be ignored. Trust, security and reliability are crucial in cross-border transactions, especially when the transaction amounts are often large. Consumers are very sensitive to these factors and expect banks and fintech companies to provide a safe and reliable payment environment. Winning the trust of customers is the key to building long-term partnerships.
2. Main scenarios and models of consumer cross-border payments
The following will explore the scenario processes of cross-border e-commerce, cross-border travel and cross-border remittance payment transactions in depth, as well as the core problems encountered in cross-border payments.
2.1 Cross-border e-commerce
In the past year, about 589 million people worldwide participated in cross-border e-commerce transactions. Among them, 72% of transactions were for physical goods purchased through mainstream online retailers such as Amazon and eBay, and 44% of transactions were for digital products. Despite the rise of the social media market, only 30% of consumers shop through these platforms, which may be related to concerns about data breaches.
In terms of payment methods for cross-border shopping, consumers mostly choose credit cards, debit cards or digital APP payment services (such as Paypal, Apple Pay). However, financial institutions may be surprised to find that only 51% of consumers use credit or debit cards. This means there is still room for other payment methods, such as 36% of consumers choosing digital APP payment services, and some consumers using wire transfers or P2P services.
However, there are still significant differences in consumption habits between different countries:
Germany: Consumers are least willing to use credit or debit cards (only 32%), and prefer digital APP payment services (49%) and bank transfers or wire transfers (35%). This may be because consumers value payment security and ease of use more, as highlighted in the "2022 Western European Online Payment Methods" report.
Philippines: Consumers prefer digital APP payment methods (49%), which may be related to the fact that 48.2% of local consumers cannot access the traditional banking system.
The above picture shows that we use Stripe's Payment Method dashboard to compare the payment habits of consumers in Germany, Malaysia, and the United States. These data show that the choice of payment methods varies by region and consumer demand, and financial institutions and e-commerce platforms need to provide diversified payment solutions based on local market characteristics.
The payment scenario of cross-border e-commerce is more likely to be that consumers make consumption payments in their own country through the payment gateway of an overseas e-commerce platform. The payment gateway will inevitably link many payment methods, such as the preferred credit or debit card (through the card organization network), such as Paypal, Apple Pay (through digital App payment), such as bank transfer (through the bank's SWIFT network), etc.
2.2 Cross-border travel
Among the consumers surveyed, two-thirds have traveled abroad in the past year, and 62% of them said they used credit or debit cards to book travel, making it the most popular payment method. This preference is reflected not only when booking travel, but also in their actual consumption abroad. Most respondents use the same payment method during their travel as when booking travel. This may be because credit cards are widely accepted and provide conveniences such as instant currency conversion and fraud protection.
Even though factors such as geopolitics continue to highlight the current situation, cross-border travel has become a norm, especially in Singapore (86%) and the UAE (84%), where the proportion of consumers traveling abroad is the highest. In each of the 13 markets surveyed, nearly 50% of respondents have traveled abroad in the past year.
When it comes to travel payment methods, consumers mostly choose credit or debit cards to book or pay for travel. However, a small number of consumers use other payment methods such as bank transfers, wire transfers or digital APP payment services.
Canadian travelers are particularly fond of credit or debit cards, with less than 10% using other payment methods compared to other markets. This may be because Canadians value credit card rewards systems more, and according to the Canadian Payments 2024 Trends report, consumers value reward points more than transaction speed.
In contrast, Brazilian tourists are the least likely to use credit cards (less than 50%), which may be related to Brazil's historically high credit card interest rates and the widespread adoption of PIX (an instant payment platform created by the Central Bank of Brazil).
Payment scenarios will be more like: consumers use their own debit or credit cards in their own country to swipe cards at offline overseas merchants, or scan codes through digital APP payment platforms. The above figure shows the process of swiping debit or credit cards.
2.3 Cross-border remittances
40% of respondents have sent or received remittances in the past 12 months, with bank transfers or wire transfers being the most common payment methods. Not surprisingly, countries with large migrant workforces, such as the UAE and the Philippines, have the highest rates of remittances sent and received, at 87% and 74% respectively. Remittances are an important source of funds for millions of workers and families around the world, and remitters want the most cost-effective payment services for each transaction.
In 2023, total remittances to low- and middle-income countries increased by 3.8% to $669 billion. In the Asia-Pacific region, China, India and Singapore are markets with more frequent remittance activities. A notable trend is that digital app payments are becoming increasingly popular among remitters due to their security and ease of use, and are gradually becoming the main way to send and receive remittances. Compared with traditional remittance methods, digital app payments are considered to be more secure.
There are significant differences in cross-border remittance payment methods compared to digital app payment methods. Despite the longer processing times and often higher costs of bank or wire transfers, they remain the most commonly used method of remittances.
Unlike other markets, the United States has the highest percentage of users using cross-border remittances (35%). This may be due to the convenience and ease of use of debit card payment methods. In the UAE, consumers use bank or wire transfers at similar rates when sending money across borders (both 53%). Although consumers have tried other payment methods, bank or wire transfers are the most reliable method of cross-border remittances.
Above is a flowchart of cross-border remittances through the banking network. If large banks in developed countries have settlement accounts with each other, the transaction process will be relatively simple. However, not every bank has a direct relationship with each other, so sometimes they need to conduct transactions through a middleman - a "correspondent bank". If there is no direct relationship between bank A and bank B, the correspondent bank will provide them with an account.
For small currencies/exchange-strapped countries, the correspondent bank model (middlemen earn the difference) will greatly erode their profits and bring huge burdens to consumers. According to statistics from international banks, globally, the average cost of remittances accounts for 6.62% of the remittance amount.
Research shows that consumers expect cross-border payments to be as convenient and smooth as daily payments, and financial institutions must work hard to meet this demand of customers. Customers want cross-border payments to be fast, transparent and efficient, with instant arrival and avoiding multiple days of settlement waiting, especially for small transactions.
III. Characteristics and pain points of cross-border payments
3.1 Cross-border payments are becoming more common and frequent
According to VISA's research, cross-border payments are very common among many consumers in various regions. However, what may surprise many people is the high frequency of these cross-border purchases. Although there are differences between different types of goods and different markets, in general, a considerable number of consumers make cross-border payments monthly, weekly or even more frequently.
Most digital natives (i.e., a generation that grew up in a digital environment) - Generation Z (84%) and Millennials (83%) have made cross-border transactions in the past month, which is already a considerable number. So what about baby boomers and older groups? In fact, with 68% saying they have made a cross-border transaction in the past month, they are catching up - in addition to purchasing goods and services, they may also send money to family members abroad, pay for school fees or purchase property.
3.2 Payment methods are not fixed, and habits have not yet been formed
As cross-border payments become more common and frequent, it is important to understand how they handle these transactions. VISA research shows that consumers currently have no clear preferences for payment methods for cross-border consumption and services. This is the window period for fintech companies to provide cross-border payment services.
Currently, consumers still use a variety of different applications and payment methods when making cross-border transactions. In terms of cross-border e-commerce and cross-border travel, more than 50% of consumers use credit or debit cards through traditional banks to pay, which is obviously the most commonly used payment method, but not the only choice. Similarly, digital app payment services are also popular, but other payment methods also account for a large proportion of the remaining consumption.
When sending money across borders, consumers choose a more diverse range of payment types. Bank transfers or wire transfers are the most widely used payment methods, but many consumers also use digital online transfer services, credit or debit cards, and P2P services.
3.3 Consumers want more choices
VISA research shows that in all regions, most consumers want more choices for cross-border payments. A considerable number of consumers are not satisfied with the current cross-border transaction options available, with one in five consumers saying that they do not have enough payment options to choose from in cross-border transactions. In contrast, one in 12 consumers believe that there are too many options for cross-border transactions.
Consumers who send money across borders are particularly concerned about having more choices (76%). This demand is particularly important among consumers in the Philippines (88%) and Mexico (82%), which are also labor-intensive countries with low local bank penetration.
It is important to note that even in countries such as Sweden (53%), the United Kingdom (53%) and France (52%), which already have a wealth of payment options, consumers also said that they want more choices, indicating that the cross-border payment market is still huge.
More choices mean more competition, especially for banks and fintechs. It also means that the payment transaction experience is not satisfactory, and consumers will not hesitate to switch to other service providers if they are dissatisfied or need more choices.
As a result, consumers will switch between multiple service providers. In key markets for cross-border payments, such as Sweden, Singapore and the UAE, about half of consumers who participate in cross-border payments currently prefer to keep their funds in multiple accounts to obtain flexibility in fund transfers. This flexibility provides an incentive for banks and fintechs to work harder to retain and attract customers by focusing on consumer behaviors, attitudes and needs, so as to motivate them to implement digital App payment methods that are most suitable for cross-border transactions.
But so many choices, as well as complex rate structures, often make consumers feel overwhelmed. Therefore, when 71% of consumers said they want more guidance to better understand when and how to use different payment options, it is obviously a clear call to banks and fintechs: guidance from trusted sources is missing in the market. What they need is security, ease of use, clear guidance and stable payment habits.
Two-thirds of respondents said they like to keep their daily routines and stick with a payment method once they find one (66%). Meanwhile, three-fifths of respondents said they are currently careful about which tools they use for cross-border transactions (61%).
As people conduct cross-border transactions more frequently, these financial behaviors are becoming habits. Consumers want easy-to-use services and clear guidance, and many are looking for alternative payment options. This is exactly where fintech companies come in.
3.4 Security is a must, not an option
For banks and fintech companies, consumer trust in payment security is critical. In each region surveyed by VISA, security is always the top factor when choosing a cross-border payment solution. When VISA further analyzed the four most important factors in choosing a cross-border payment method, consumers valued security (63%), trust (51%), reliability (49%) and fees (49%) the most.
Security remains a top concern for consumers in all regions and for travel (63%), e-commerce (62%) and remittances (59%) across all types of cross-border transactions.
Beyond the top three considerations, there are some differences between markets when analyzing cross-border payment method selection. For example, for consumers in Mexico, Brazil, the Philippines, Hong Kong, the United Kingdom, Germany and Sweden, accessibility and ease of use are very important. In Germany, anonymity is one of the top five factors consumers consider, while in Brazil, consumers say cost is second only to security as the second most important consideration when choosing a cross-border payment method.
One reason why security is so prevalent is that consumers have personally experienced, witnessed or heard about negative incidents. Negative experiences range from delays, fraud or scams, lost or stolen funds, transaction errors, fee issues, card issues, complex processes, unreliable services or technical failures. These experiences have profound and serious consequences for the people involved.
One in five consumers (21%) have had a bad experience when making a cross-border transaction. Additionally, consumers who send money across borders are more likely to report negative experiences (31%). These groups may be extra cautious about fraud in cross-border transactions.
A UAE consumer described his experience: “…I was sending money to my brother. He needed the money urgently, but the payment was delayed for a week and he almost lost his home.” Others reported being double-charged when exchanging currency, experiencing fraud, or lack of clear and accessible guidance on how to access funds. These experiences are extremely disruptive and cause great real harm to consumers.
Fraud risk is a barrier to using cross-border payments, and the proportion of consumers who stop cross-border transactions due to concerns about fraud risk is quite high. About two-thirds of consumers said that fraud risk has stopped them from using a cross-border payment method.
Consumers who send money across borders, younger generations, and consumers from the UAE, Philippines, Mexico, and Brazil are more likely to stop using a payment method due to concerns about fraud. 76% of Gen Z and 71% of millennials, respectively, have interrupted a transaction due to suspicion of fraud, compared to 52% of baby boomers and older consumers. Traditionally, the older generation has established a high level of trust in traditional banks, while the younger generation is more casual in choosing cross-border payment service providers, some of which may be newer market players and have not yet established sufficient trust.
IV. VISA's cross-border payment solution - VISA Direct
With the rise of financial technology, the funds transfer business previously dominated by banks is no longer limited to a specific place, but anywhere that can be connected to the Internet. In the past, cross-border payment methods were mainly dominated by bank remittances and card payments. As a global leader in digital payment technology, VISA is also exploring how to integrate with VISA's existing card organization bank network through digital means to provide consumers with a more convenient cross-border payment experience - VISA Direct.
4.1 What is VISA Direct
VISA Direct is a payment platform that enables near-real-time domestic and international fund transfers. The platform uses the processing power of the VISANet global network to enable payment initiators to "push" funds directly to the recipient's bank account or VISA card in a safe and convenient manner within 30 minutes through acquiring institutions.
Users can use VISA Direct to send money (Account To Account, A2 A) to more than 2 billion VISA cardholders and account holders worldwide, and transfer funds to eligible bank cards, deposit accounts and digital wallets in more than 190 countries and regions. VISA Direct supports a variety of uses, including person-to-person (P2 P), business-to-consumer (B2 C) and business-to-business (B2 B) payments.
The VISA Direct solution is supported by more than 500 VISA partners (including acquirers, banks, fintech companies and other partners). Through this solution, VISA's global customers and partners can connect to VISA Direct through a single access point to push payments to eligible VISA cards or accounts, thereby enabling domestic or cross-border payments.
Although this feature is currently only available for some VISA cards, and acceptance depends on the cooperation of the cardholder's institution, its scope of application is continuing to expand. In fiscal 2023, VISA Direct processed more than 7.5 billion transactions in more than 2,800 projects worldwide, supporting more than 65 usage scenarios. Recently, in March 2025, VISA officials said that VISA Direct's cross-border transactions increased by 50% year-on-year, P2P transactions increased by 80% year-on-year, and the annual compound growth rate of transactions reached 40%.
In terms of cross-border payments, the core of VISA Direct is: 1) using its established efficient global VISANet card organization network to replace the old SWIFT agent bank network system; 2) connecting many digital partners through the digital VISA API; 3) connecting the bank account system and the VISA card account system, and providing one-stop access.
4.2 What are the advantages of VISADirect?
Yu Shirley, President of VISA Greater China, said: As a network that converges networks, VISA is the driving force behind the transformation of cross-border capital flows, connecting the world through innovative technologies. From banks to card issuers to fintech companies, all types of customers can connect to VISA Direct through a single access point to create cross-border payment tools that provide consumers and businesses with fast, secure and reliable global capital flows.
This type of real-time cross-border payment holds huge opportunities. Data shows that companies that use global real-time payment networks for cross-border transactions can increase transaction volume by about 15% each year and increase profits when entering new markets. In addition, companies are expected to reduce customer churn by up to 60% while improving payment reliability and security.
VISA can provide solutions, and VISA Direct has five major advantages in enabling cross-border payments:
A. Global coverage
VISA Direct provides a single access point that connects more than 8.5 billion terminal devices. Its real-time cross-border payment solution allows users to easily access billions of bank cards, network terminals, accounts and digital wallets around the world with a single connection.
B. Simplified Compliance
VISA Direct supports compliance through its strong partner ecosystem and VISA Network. When using the card-based network, more and more peer-to-peer transactions are enabled. When the sender and the recipient use the same bank service, the payment chain will be significantly simplified; and when the payment is made through a digital wallet, the process will be further optimized.
C. Continuous Innovation
With more than 60 years of industry experience, VISA Direct is committed to promoting the continuous advancement of payment technology through innovation to create future-oriented payment functions.
D. Improved Transparency
VISA Direct is helping financial institutions and other payment providers to improve the transparency of foreign exchange rates. VISA generates foreign exchange rates using multiple existing market indicators, including data from top market data providers, pricing and liquidity data from foreign exchange trading platforms, and central bank pricing indicators.
E. Cost-effectiveness
VISA Direct modernizes the cross-border payment capabilities of enterprises, enabling them to use VISA's industry-leading infrastructure without having to make high investments in their own infrastructure.
In an increasingly interconnected global economy, the ability to move funds across borders quickly and securely is critical. VISA Direct provides a comprehensive solution based on the card organization network, helping enterprises to simplify cross-border transaction processes, reduce costs and improve customer experience.
But as mentioned earlier, VISA Direct is still an optimization of an old system, like refueling in the air, rather than heading to the stars and sea in space.
V. Web3 payment solution
Just like the essential attributes (value scale) and core functions (exchange medium) of currency are unchanged, despite the carriers or forms of currency such as shells, chips, cash, deposits, electronic currency, stablecoins, etc. The essence of Web3 payment is also unchanged - the transfer of value (Exchange of Value). What needs to be changed is the service mode of banks, payment institutions, etc., and what needs to be considered is how to provide better financial payment services in a distributed, digital, and space-time scenario.
Web3 payment is a new payment method based on blockchain technology and digital currency. Compared with traditional payment systems, Web3 payment has the following characteristics:
Instant settlement: Instant transaction settlement can be achieved worldwide through blockchain technology.
Reduce costs: By eliminating intermediaries, Web3 payment can significantly reduce transaction costs and management fees. Global accessibility: Anyone with an internet connection can make payment transactions at any time, especially in areas that are not covered by the traditional financial system (Under-banked and Unbanked).
Decentralization: Web3 payments enable permissionless access and asset ownership through decentralized finance (DeFi).
Programmability and interoperability: Combined with smart contract technology, Web3 payments can create more financial derivative services such as lending and financial management.
Enhanced transparency and openness: The public and transparent nature of blockchain increases the visibility of capital flows and simplifies cross-border payment processes.
Overall, Web3 payments are not only a new payment method, but also provide a more open, efficient and innovative financial payment solution through the combination of blockchain technology and digital currency.
This can be an embedded solution, like Gate Pay helps embed the digital currency payment Pay with Crypto option in traditional payment gateways, or a cost-cutting and efficiency-enhancing solution based on blockchain and stablecoins, such as the case of Stripe's acquisition of Bridge, or a brand-new innovative financial form based on the blockchain settlement layer, taking into account both on-chain and off-chain, just like the Morph Black product that MorphPay aims to create.
In fact, behind the payment method, the most significant change brought by Web3 payment is the change in the accounting method - the open and transparent global public ledger of blockchain. The current Web3 transformation of the SWIFT network and the card organization network is also a process of gradually migrating to the blockchain settlement network.
5.1 Web3 transformation of cross-border e-commerce
As analyzed before, the payment scenario of cross-border e-commerce will be more consumers in their own country, using the payment gateway of overseas e-commerce platforms to make consumption payments. For cross-border e-commerce, Web3 payment can intervene in two aspects:
Embedding the option of digital currency payment (Pay With Crypto) in the payment gateway or digital wallet to facilitate the consumption of people who pay with digital currency;
Using blockchain as a settlement network to optimize the settlement of funds between users and merchants, so as to reduce the payment fees of users and merchants and improve the efficiency of merchants' capital utilization.
Although we can see that Web3 payment can indeed bring benefits to cross-border e-commerce payments, a very realistic problem, and one that has been discussed by the industry, is how to achieve Mass Adoption of cryptocurrency - how to let users own Crypto and how to let merchants accept Crypto.
5.1.1 Bridge - Stablecoin infrastructure acquired by Stripe for US$1.1 billion
As one of the three major payment giants in the United States, Stripe acquired Bridge.xyz, a stablecoin infrastructure company that was only established for 2 years, for US$1.1 billion in October 2024, creating the largest acquisition deal in the crypto industry. Bridge is a stablecoin API infrastructure that provides software tools that help companies accept stablecoin payments.
Bridge's main product is the Orchestration API, which is an API that integrates stablecoin payments into the company's existing business. After integration, Bridge will handle all compliance, regulatory and technical complexities.
Through the Orchestration API, combined with Bridge's own 1) stablecoin cross-chain transactions, 2) fiat currency/cryptocurrency deposit and withdrawal acceptance, and 3) virtual bank accounts, it can help users transfer funds around the world within minutes, seamlessly send stablecoin payments, convert local fiat currencies into stablecoins, and provide global consumers and businesses with US dollar and euro accounts, allowing users to save and spend in US dollars and euros.
For Stripe, one of the world's largest payment service providers, the emergence of Bridge, on the one hand, can help Stripe Pay With Crypto strategy to land, so that more and more existing businesses will be settled by stablecoins, so as to achieve internal cost reduction and efficiency improvement, and the user product experience is smooth and seamless; on the other hand, Stripe can build a stablecoin payment path outside the original bank, card organization, and SWIFT payment system through Bridge, expand beyond its ecosystem, and be compatible with DeFi.
Therefore, after combining with Bridge, Stripe's network effect is no longer limited to its ecosystem, but the entire stablecoin market. Similarly, the PayFi ecosystem built in combination with DeFi can break through the geographical limitations of traditional financial services and realize the free flow of value and financial inclusion for global users. This is also the direction that Paypal, which has issued stablecoins, is working hard to achieve.
Bridge's official announcement stated: "The two parties will work together to accelerate the adoption and practicality of tokenized dollars, making it easier for everyone in the world to transfer, store and consume currency. Through many real cases, it has been proved that stablecoins can become the core global capital flow infrastructure and represent a new payment platform. This is not because consumers or businesses inherently want "cryptocurrency", but because stablecoins solve key financial problems."
5.1.2 Gate Pay——Starting Payment from Exchanges
As the industry-leading B2 B cryptocurrency payment solution, Gate Pay provides a one-stop cryptocurrency collection, issuance, and fiat currency deposit and withdrawal service, as well as white-label payment gateways and other customized solutions.
In the early days of exchanges, exchanges such as Binance, Crypto.com, and Gate.io launched closed-loop trading functions based on their own ecosystems, such as Gate Life Merchant Mall and Gift Card Center launched by Gate.io (supporting merchants to settle in and users to pay via cryptocurrency) and Crypto Payment Card launched by Gate.io. The core essence of exchange payment 1.0 is 2 C business, to compete for users, to meet the real consumption needs of the exchange's large-scale C-end users, to maintain user retention, and to promote user activity and loyalty through some incentives.
With the development of the industry, Gate Pay abstracted the payment capabilities of exchanges to form a set of external 2 B crypto payment solutions. Any merchant or institution can use API or white label to access all Gate Pay product capabilities. Merchants can customize their own front-end and display, and reach their own merchant network with their own brand. Gate Pay is willing to be an infrastructure builder and solution provider to promote large-scale application scenarios such as cryptocurrency payments, both in front of and behind the scenes.
As Feng, the head of Gate Pay, said: "Exchange payments have evolved from the initial Crypto Payment Card to the internal exchange marketplace, and then to the payment of QR codes generated between internal ecosystems. In essence, these are all 2C businesses, and most exchange payments do not have 2B capabilities. In fact, it was mentioned earlier that the greater purpose of exchange payment 1.0 is to serve the existing users of the exchange and provide user retention and loyalty.
The greater purpose of exchange payment 2.0 is to serve users outside the exchange. On the one hand, it can use the various mature modules that the exchange has built to better expand the 2B business, and on the other hand, it can indirectly convert some 2C users to maximize the advantages of both 2B2C."
5.2 Web3 transformation of cross-border travel
As mentioned earlier, the payment scenarios for cross-border travel will be more: overseas offline payment, through debit/credit cards or digital wallet App payment platform scanning. Web3 payment is more embedded in digital wallets, and payments are made to merchants in a form similar to QR code payment. Let's first look at the role of Web3 payment from the perspective of online cross-border travel website booking, and then from the perspective of offline consumption.
5.2.1 Travala - Leading Cryptocurrency Travel Service Provider
Travala.com is a leading cryptocurrency-native travel booking service provider with 2.2 million+ listings covering 230 countries, 400,000+ activities and 600+ airlines. Travala.com provides a seamless travel booking experience that incorporates next-generation blockchain technology, tokenized incentives, and a "best price guarantee" for accommodation and activities.
In addition to traditional payment methods, Travala.com also supports more than 100 leading cryptocurrencies for payment. Travelers can book with cryptocurrencies and receive up to 10% Bitcoin or AVA back, discounts, AVA token rewards, etc. through the AVA program. The AVA program provides discounts and loyalty rewards for eligible bookings made on Travala.com, and even greater discounts for members at higher membership levels.
AVA is a loyalty reward token that is more flexible than traditional points. Travelers can use AVA to book future trips on Travala.com, upgrade their AVA Smart Program membership level, or spend AVA on other online platforms that accept AVA.
Travala.com was founded by a group of experienced experts in the tourism, fintech and blockchain industries, with a mission to promote the popularity of cryptocurrency through travel. Travala.com's vision is to combine travel booking with the concept of decentralized technology: promote accessibility to anyone around the world; provide censorship-resistant and peer-to-peer transactions; and create a travel ecosystem governed by users.
Although, as mentioned above, Travala.com has added various mission, vision and values of Web3 to its official website, we can see the essence through the phenomenon:
The essence of Travala.com is an OTA travel platform that has added a crypto payment option. After receiving the customer's cryptocurrency, it will withdraw the money to the legal currency and finally settle with the merchant. From this perspective, it only promotes the popularization of digital currency payment and access to the crypto customer group;
By using cryptocurrencies and settling through blockchain, the platform and merchants can save a lot of transaction fees. For example, the standard transaction fee charged by Stripe gateway legal currency payment is 2.9% + $0.30 per transaction, international cards are additional + 1.5%, and currency conversion involves + 1%. Then the cost saved by both the platform and the merchants can be returned to the users to achieve the "best price guarantee";
The travel platform's membership loyalty program is run by the AVA token economy. Generally speaking, the points of hotel and airline membership loyalty programs are liabilities of the company, but the benefit of having a token economy is that it is an asset of a company, and the cost of the project party's initial investment in acquiring assets is "0". Once the token economy is running, it can achieve global reach.
5.2.2 Web3 payment at offline corner coffee shops
Low-value transactions are a potential opportunity for Web3 payments, especially low-fraud face-to-face offline transaction scenarios, such as transactions conducted in restaurants, coffee shops or corner stores. Due to low profit margins, these businesses are cost-sensitive, so the 15-cent transaction fee charged by some payment solutions may have a great impact on their profitability.
For every $2 spent by customers on coffee, only $1.70 to $1.80 goes to the coffee shop, and the remaining nearly 15% goes to the credit card company. These high fees are only to facilitate transactions, and credit cards here have only one purpose, which is to facilitate payers.
Neither consumers nor shops need additional features to justify transactions: consumers don’t need fraud protection (they just get a cup of coffee) or loans ($2 for the coffee), and coffee shops have limited compliance and bank integration needs (coffee shops often use integrated restaurant management software or none at all). So if there is a cheap, reliable alternative, these merchants will use it.
Then offline Web3 payments in the form of QR code scanning can solve the above pain points, settle directly with stablecoins through blockchain, and leave the high rates of credit cards behind. Merchants can get more profit margins and get paid instantly. Why not?
5.3 Web3 transformation of cross-border remittances
Global remittances are the lifeblood of many families around the world. In the past few years, although we have seen a batch of new financial technology companies (FinTechs) committed to promoting simplified digital payments, traditional remittance channels have long been plagued by high fees, slow transfer times and cumbersome processes.
According to statistics from international banks, the average cost of remittances worldwide accounts for 6.62% of the remittance amount.
Cross-border remittances can take up to five business days to settle. The Bank for International Settlements (BIS) reports that delays in clearing and settlement processes cost the global economy billions of dollars each year due to liquidity inefficiencies.
As a result, many consumers are turning to cryptocurrencies as a payment option to avoid pain points in cross-border remittances, such as long processing times and high transfer fees. PYMNTS research found that a significant number of consumers (24%) see the option to receive funds in cryptocurrency as one of the main motivations for choosing a payment service provider (PSP). For solution providers, there is a huge opportunity to provide alternatives to traditional remittance payment methods, such as blockchain payment options.
A 2021 PYMNTS research report with the Stellar Development Foundation shows that: While cryptocurrencies are often seen as an alternative investment or digital payment method, many consumers see them as a viable option. Among respondents who paid friends or family online in other countries, 23% used at least one cryptocurrency. In fact, 13% of consumers surveyed said that cryptocurrency is their most commonly used payment method for online cross-border remittances. PYMNTS research found that consumers who adopt cryptocurrencies also tend to use other cross-border payment transfer methods to eliminate friction in the payment process. Consumers who use cryptocurrencies to send cross-border remittances are more likely to send them directly to mobile wallets (46%).
As the cross-border payment market continues to develop, payment service providers are under pressure to reduce remittance fees and address delays. Many consumers send remittances due to urgent financial needs of friends or family, so they prefer to choose solutions that can complete payments quickly and securely.
5.3.1 BCRemit-Solving the Barriers of Cross-Border Remittances for Filipino Workers with USDC
BCRemit is trying to change this situation for migrant workers, especially Filipino workers working in the UK and the United States. By integrating Circle's USDC, BCRemit has redefined the remittance experience for its users - making it faster, cheaper and more convenient than ever before, solving many challenges faced by traditional remittances and providing users with a more efficient and low-cost remittance experience.
Oliver Calma, the founder of BCRemit, was once an overseas worker himself and is well aware of the high costs and complex processes of traditional remittances. With USDC, BCRemit is able to achieve instant 24/7/365 transactions, and can quickly process remittances even on weekends and holidays, meeting users' needs to transfer money at any time.
Compared with traditional banks and remittance companies, BCRemit's cross-border remittance fees are only 1%, which is a reduction of up to 90%, far below the goal set in the United Nations Sustainable Development Goals to reduce remittance costs to below 3% by 2030.
At the same time, USDC's fast settlement capabilities reduce the large amount of capital reserves required by BCRemit to pre-fund accounts in target countries, reduce liquidity constraints and interest expenses, optimize its working capital, make its financial situation healthier, and be able to invest more funds in services and growth.
BCRemit seamlessly integrates USDC into its back-end operations, allowing users to easily make remittances when using the BCRemit application without direct exposure to cryptocurrencies or complex processes. This user-friendly design makes it convenient for even users with weaker technical backgrounds to use the service.
BCRemit also promotes broader financial inclusion by providing multiple ways to receive money, including bank accounts, e-wallet top-ups, and cash pickup options at over 17,000 locations in the Philippines, ensuring that even unbanked recipients can easily access funds. By reducing costs and simplifying the remittance process, BCRemit enables overseas workers to support their families more effectively and improve their quality of life.
5.3.2 MoneyGram - Opening up the "last mile"
MoneyGram International (MoneyGram) successfully combines digital assets with traditional cash services through its innovative MoneyGram Access™ product, solving the pain points of digital assets in the "last mile" delivery. MoneyGram Access is powered by the Stellar blockchain and leverages the efficiency and low-cost advantages of the Stellar network to provide users with seamless conversion between cash and cryptocurrency.
Specifically, MoneyGram Access allows users to exchange cash for USDC (a stablecoin) at MoneyGram's global outlets, and users can use their funds in an unprecedented way to protect their national currency from depreciation. At the same time, users can also send funds quickly and securely to any region around the world that supports the service through the blockchain network. Whenever they need funds in physical form, users can withdraw local currency at participating MoneyGram outlets through their USDC, thereby achieving seamless integration of digital assets with the traditional cash economy.
This service is particularly targeted at informal economic participants who do not have access to bank accounts or credit cards, enabling them to participate in the storage and transfer of digital assets in cash. In addition, MoneyGram has joined hands with partners such as TruBit to further expand the coverage of its digital asset services. For example, in Latin America, MoneyGram has partnered with TruBit to introduce the MoneyGram Access service to core markets such as Mexico, Argentina, Brazil and Colombia to meet the region's demand for efficient cross-border payments.
By integrating Stellar blockchain technology and USDC stablecoins, MoneyGram not only improves the speed and security of cross-border remittances, but also reduces transaction costs and promotes financial inclusion. This innovative model provides the global payment industry with a successful example of combining traditional financial services with emerging digital technologies.
BCRemit's case starts from a single-point scenario (remittance scenario for overseas Filipino workers). Through the combination of blockchain technology and stablecoins, it has achieved a significant reduction in user remittance costs and ensured the timeliness of fund transfers. Although the circulation of stablecoins on the chain is already very smooth, it is still necessary to open up the "last mile" from digital currency to legal currency. BCRemit's solution provides options including bank accounts, e-wallet top-ups, and cash withdrawals at more than 17,000 locations in the Philippines, while MoneyGram directly connects digital currencies to its original cross-border remittance business and connects its 350,000+ agent currency exchange outlets around the world.
6. Web3 payment is more than just payment
Many of the cases mentioned above are based on the Web3 transformation of traditional financial payment methods. However, if we look at it from a larger perspective, can we use blockchain and digital currency to build a Web3 payment path for consumers outside the original bank, card organization, and SWIFT payment system, and at the same time be compatible with DeFi?
Morph Pay is using the most cutting-edge Web3 technology to innovate digital payments. We have seen the direction in Morph Black, which Morph Pay recently launched, known as the "first black card for young people", taking into account the multiple solutions that consumers need in cross-border payments:
A. Blockchain as a settlement layer. Morph Pay uses Morph, a global consumer-grade public chain dedicated to promoting the large-scale popularization of Web3, as a settlement layer to achieve instant settlement, 24/7/365, low transaction fees, programmability and interoperability of consumer payments.
B. CeFi compatibility. Morph Pay can also provide consumers with convenient conversion from digital currency to legal currency and flexible banking services through its cooperative licensed financial institutions.
C. Consumer payment. Whether the backend is connected to a VISA/Mastercard debit card or a digital wallet payment scenario, it can provide consumers with a better solution to replace the original old payment methods.
The above three points are actually what Web3 payment solutions must achieve, but native Web3 payment solutions can provide much more than these:
D. DeFi compatibility. Morph Pay, as a payment product launched by the consumer-grade public chain Morph, can not only create a one-stop DeFi income aggregation solution for consumers, support an annualized yield of up to 30% for crypto asset deposits, but also support innovative operations of smart contracts, thereby building scenarios that are difficult to achieve with traditional financial payments. For example, DeFi income can be directly used for daily payments, achieving seamless connection between asset appreciation and payment scenarios, and evolving the previous Buy Now Pay Later to Buy Now Pay Never.
E. Ecological governance empowerment. On-chain: Users will be able to participate in exclusive ecosystem airdrops and incentive activities provided by Morph and its ecosystem partners; Off-chain: Provide consumer cashback, Aspire travel concierge services, industry summits and other rights and interests to further provide users with utility.
We can see from the case of Morph Pay that solutions based on blockchain and digital currency are no longer limited to a single product and a single scenario. This on-chain composability has been able to build a new type of financial service complex, covering payment, savings and financial management, lending, remittance transfer, and ecological governance. This is not just digital currency, but also legal currency.
In the past, we often said that we needed bankless, but now it seems that we have obviously broken through the boundaries of bankless.
VII. Written at the end
Finally, I end with a sentence that I agree with very much from Gate Pay Feng:
"In the traditional Internet field, payment is the most sticky application scenario: everyone may not have brokerage or trading apps on their mobile phones, but there must be multiple payment apps, which also applies to Web3. At present, the vast majority of Web3 audiences or users are attracted to the market by the trading attributes and money-making effects of cryptocurrencies, but even so, the number of people who own cryptocurrencies still accounts for less than 5% of all Internet users, and the penetration rate is extremely low. If one day, when the crypto market or Web3 can reach more than 90% of Internet users, then this scenario must not be DeFi and Crypto Trading, but Payment."
