Problem Statement

Statement

Despite decades of progress, traditional Web2 payment infrastructures such as Visa continue to exhibit high friction in emerging markets. Transaction fees remain disproportionately high relative to local income levels, banking access is limited, and hardware costs and regulatory burdens further deter merchant participation. As a result, seamless digital payments remain out of reach for large segments of the population across regions like Sub-Saharan Africa, Southeast Asia, and Latin America.

Meanwhile, the Web3 ecosystem has exploded—with hundreds of millions of users and trillions in value circulating across crypto wallets and decentralized platforms. Blockchain technology offers low-cost, borderless, and secure payments. However, this momentum has yet to translate into real-world utility. Crypto assets remain largely confined to speculative trading and DeFi protocols, with few opportunities for everyday usage. Merchants rarely accept crypto payments, and those who do face high complexity and regulatory risk.

This disconnect points to a missing link:

A seamless bridge between Web3 capital and Web2 commerce, especially in markets underserved by traditional payment systems.

Why This Problem Remains Unsolved

The market opportunity is clear. Billions remain underserved by traditional payment rails, while Web3 holds immense potential for inclusion, speed, and cost-efficiency. Many teams are actively building in the Web3 payments space. However, none have yet succeeded in bridging Web3 capital with everyday real-world commerce at scale.

Why not?

It’s not for lack of ambition—it’s because solving this problem requires deep technical and regulatory expertise, which remains rare. At the heart of the challenge is a foundational mismatch:

“Blockchain is permissionless. Traditional payments are highly permissioned.”

The gap is not merely technological—it’s legal, operational, and systemic. Any solution must navigate compliance frameworks, risk management, and user protections while still honoring the core values of Web3: openness, transparency, and decentralization.

However, compliance is notoriously complex—it first requires acquiring licenses, and then building robust legal, technical, and operational frameworks that can navigate and align with regulatory environments that are often fragmented, vague, and even hostile toward direct crypto payment flows. This challenge becomes especially pronounced on the consumer side: compared to B2B compliance, B2C compliance involves managing a user base that is several orders of magnitude larger, with no cost-efficient and scalable solution currently available in the market.

As a result, even the most advanced Web3 payment projects tend to rely on existing Visa or Mastercard rails to remain compliant—essentially reintroducing the same friction they aim to solve. This dependency not only limits their ability to reduce transaction costs and improve accessibility but also fails to address the fundamental barriers that have kept card penetration low in emerging markets.

Permissionless does not mean lawless. The future of payments depends on building systems that are inclusive yet compliant, and that enable clear, transparent rules rather than relying on opaque gatekeeping. Only by doing this can we unlock the true scalability of blockchain—and bring the next billion users into Web3.

Beyond regulatory hurdles, one of the most underestimated challenges in Web3 payments is user experience. Payments are an extremely UX-sensitive domain—even minor friction points can lead to massive drop-offs, especially in emerging markets where users are both price-sensitive and less technically familiar.

Several design mismatches between Web3 infrastructure and real-world payment needs remain unresolved, for example:

• Gas Fee

  Requiring users to pay variable gas fees contradicts Web2 consumer habits. For users accustomed to seamless, free checkout experiences, this is a major deterrent—particularly in regions where even a few cents matter.

• Refund Mechanism

  Most blockchains don’t natively support refunds. But in real-world payments, refunds and dispute resolution are essential components of trust and usability.

• Shared Infrastructure Issues

  General-purpose blockchains often attempt to support payments alongside DeFi, gaming, NFTs, etc. However, payment networks demand extreme reliability and fault isolation. Mixing payment rails with unrelated dApps increases the risk of single points of failure and degrades overall robustness.

In short, Web3 infrastructure was not purpose-built for payments. Without rethinking these core assumptions, it’s difficult to create systems that meet the expectations of everyday users, let alone scale in high-friction environments.