In an article titled “A Founder’s Reflection: Why I Gave Up on Building a Web3 Payments Startup,” entrepreneur Yokiiiya shared a candid story about shutting down his project.

After conducting market research and even building an MVP, he ultimately decided to abandon the Web3 payments idea.

The reason wasn’t technical difficulty.

Instead, he realized something fundamental:

Payments are not a product competition—they’re a financial infrastructure competition.

His experience highlights a common misunderstanding in the Web3 payments space.

Many founders approach it like a traditional internet product startup, when in reality it operates more like building financial infrastructure.

Payments Don’t Compete on Features

Many Web3 founders believe that building a great user experience is enough to succeed in payments.

But in reality, the payment industry rarely competes on product features.

Instead, success usually depends on four core factors.

1. Banking Relationships

Payment companies rely heavily on the traditional banking system for:

• clearing

• settlement

• fiat on-ramps and off-ramps

Without reliable banking partners, a payment system simply cannot function.

Establishing those partnerships typically requires:

• long-term cooperation

• regulatory compliance checks

• years of trust-building

This alone creates a major barrier to entry.

2. Financial Licenses

In many jurisdictions, payment companies must obtain financial licenses such as:

• Money Transmitter Licenses

• Electronic Money Institution (EMI) licenses

• local payment institution licenses

Acquiring these licenses usually means:

• high regulatory costs

• long approval timelines

• strict compliance requirements

These regulatory hurdles make payments one of the most difficult fintech sectors to enter.

3. Capital Efficiency

Payments aren’t just about moving money.

They’re about moving money efficiently.

This includes factors such as:

• settlement speed

• liquidity management

• foreign exchange risk

If capital moves slowly through the system, payment costs increase dramatically.

In reality, many payment companies are essentially operating a capital flow network.

4. Risk Management

Payment systems face multiple types of risk, including:

• fraud

• money laundering

• regulatory exposure

• foreign exchange volatility

Many payment businesses appear highly profitable on the surface.

But much of that revenue actually comes from pricing in risk.

Why Web3 Payments Often Look So Profitable

One of the most insightful points from the article is this:

Much of the profit in Web3 payments comes from risk pricing.

Examples include:

• cross-border payments

• OTC crypto conversion

• fiat on-ramps and off-ramps

These services can charge higher fees because they operate in markets with:

• regulatory uncertainty

• currency volatility

• compliance complexity

Payment providers take on these risks, which is why they can charge a premium.

Web3 Payments Are Mostly a Backend Upgrade

Many people assume Web3 payments will revolutionize how consumers pay.

But the author argues that the real changes are happening behind the scenes.

For example:

• faster settlement infrastructure

• improved cross-border clearing

• more efficient liquidity management

These improvements are primarily infrastructure upgrades.

For most consumers, the experience may not look dramatically different.

In that sense, Web3 payments are less like a disruptive consumer product and more like:

an upgrade to financial infrastructure.

Why Payments Are a “10-Year Project”

Building a mature payment network requires long-term accumulation of:

• banking relationships

• regulatory trust

• global liquidity networks

These capabilities typically take many years to develop.

That’s why the author concluded that Web3 payments are not well suited to short-term startup cycles.

Instead, they are closer to a decade-long infrastructure project.

Why Latin America and Africa May Be More Promising

Despite the challenges, the author believes some regions still offer strong opportunities, particularly:

• Latin America

• Africa

These markets often share several characteristics:

• limited access to traditional financial services

• high demand for cross-border payments

• significant inflation pressures

In such environments, crypto payments may offer:

• lower costs

• faster settlement

• greater financial access

For this reason, Web3 payments may gain more traction in these regions.

Why the Founder Ultimately Walked Away

The founder’s decision to stop the project was pragmatic.

He realized he lacked two critical resources.

1. Long-Term Banking Relationships

Strong banking partnerships usually require:

• years of cooperation

• long-term trust-building

This is not something a startup can quickly create.

2. The Ability to Sustain Long-Term Pressure

The payments industry typically requires:

• significant capital investment

• high compliance costs

• advanced risk management capabilities

These requirements exceeded the founder’s available resources, leading him to pivot to another direction.

Payments Are Just the Entry Point

One of the most interesting insights from the article is this:

Payments only answer the question of how money moves.
The more valuable question is where that money goes afterward.

In other words, the larger opportunities may lie in:

• asset management

• capital allocation

• yield strategies

These areas may have higher barriers to entry, but they also offer the potential for greater long-term value.

Conclusion: Web3 Payments Are Infrastructure, Not Just Products

The founder’s story reveals an important reality.

Web3 payments are not simply another internet startup opportunity.

They involve multiple complex systems, including:

• banking networks

• financial licensing

• liquidity infrastructure

• risk management frameworks

For this reason, payments are better understood as a financial infrastructure project.

For many founders, the real opportunity may not lie in payments themselves—but in what happens after the money moves.

FAQ: The Web3 Payments Industry

Why is building a Web3 payments startup so difficult?

Because the payments industry depends on banking partnerships, financial licenses, liquidity networks, and strict risk management—far beyond the requirements of a typical internet product.

Is there still a market for Web3 payments?

Yes. Regions with limited banking access and strong cross-border payment demand—such as Latin America and Africa—may offer significant opportunities.

What is the real competitive advantage in payments?

Success usually depends less on product features and more on banking relationships, regulatory compliance, capital efficiency, and risk management.

Where are the biggest opportunities beyond payments?

Many industry observers believe the next wave of opportunity may lie in asset management, capital allocation, and yield strategies built on top of payment infrastructure.