Six Months in Putian: How Field Research Changed My Understanding of Web3 Payments

When I made the decision to stop building Web3 payment products six months after entering the space, it wasn’t because I’d failed—it was because I’d finally understood the industry’s true structure. My journey through Yiwu, Shuibei, Putian, and Mexico revealed something that contradicts most narratives circulating in tech circles: the real barriers to scaling blockchain-based payments have nothing to do with product innovation.

The Problem I Thought I’d Solve

As a serial entrepreneur wrapping up a multi-year venture, I was searching for my next focus. A friend invited me to explore Web3 payments from Hong Kong, and the opportunity seemed compelling. In my previous businesses handling multinational operations, I’d repeatedly encountered the same systemic friction: while revenue scales globally almost instantaneously, cash flow lags perpetually. Cross-border settlements move slowly, processes fragment, costs lack transparency, and payment terms feel uncontrollable. What began as a nuisance at small scale becomes a ceiling as the business grows.

From a macro perspective, Web3 appeared to offer a logical solution: faster settlement speeds, complete transparency, and 24/7 clearing capabilities. It seemed like the type of structural upgrade that could genuinely address decades of overlooked friction. This wasn’t ideological enthusiasm for blockchain—it was pragmatism. I simply saw a mechanism that could solve real problems in business contexts I understood intimately.

The Field Investigation: What Yiwu Promised vs. What Putian Showed

Rather than theorizing, I decided to spend three months immersing myself in actual payment flows. This meant visiting places mentioned repeatedly in industry reports: Yiwu, Shuibei, Putian, and eventually Mexico.

The contrast between report narratives and ground-level reality was stark.

In Yiwu, the famous hub repeatedly cited as proof of Web3 payment scaling, I discovered something different. Stablecoins did circulate, but their usage was fragmented, relationship-dependent, and largely invisible. These weren’t standardized settlement flows—they were patches quietly embedded within existing systems. Transactions weren’t driven by efficiency gains; they were survival responses to the inadequacy of traditional channels.

The picture remained consistent through Shuibei and Putian. Each location showed pockets of stablecoin adoption, but nothing resembling the scalable, product-driven infrastructure implied in venture presentations. Even in Mexico, where economic conditions might theoretically favor blockchain payments, the reality was more complex: usage existed but lacked the momentum and standardization that would indicate genuine product-market fit.

The pattern became undeniable: Web3 payments hadn’t achieved penetration rates even remotely matching the enthusiasm in tech communities. What existed was a supplement, not a replacement.

The Turning Point: Understanding What Actually Blocks Adoption

From July through September 2025, I shifted from observer to builder. I contacted potential users systematically—HR platforms, insurance companies, cross-border trade firms, game studios, livestream platforms, MCN agencies. Their needs were remarkably consistent: money should move faster, cheaper, and more reliably.

On paper, stablecoins solved all three problems. We believed the application layer was the entry point.

Then we hit the actual constraint: accessing stable, compliant, sustainable fiat-to-stablecoin on-ramps.

Connection attempts with established providers revealed a troubling reality. None demonstrated reliable, long-term channel stability. We even attempted building proprietary channels ourselves. Only then did I grasp what had previously been abstract: this wasn’t a product problem at all. It was infrastructure.

Banking relationships, regulatory licenses, KYB/KYC compliance, real-time risk management, credit limit administration, regulatory communication protocols—the entire channel layer depends on years of accumulated credibility, operational experience, and deployed capital. These aren’t capabilities that entrepreneurial teams with software backgrounds acquire in months.

This was the moment I understood: the payment industry doesn’t reward better products. It rewards banks.

Unmasking the “Profitable” Illusion

During this period, something a former colleague mentioned struck deep: “Payment isn’t determined by revenue—it’s determined by losses you can sustain. Most seemingly profitable Web3 payment models are just risk premiums that haven’t materialized into losses yet.”

Many successful payment operations appeared to earn profits. Upon inspection, they were actually risk premiums—income streams that depend entirely on risks remaining unactivated. The exact nature of these latent risks often remains murky: counterparty compliance gaps, fund pool structural mismatches, outdated risk protocols, regulatory gray zones. Critically, many operators don’t precisely understand which risks they carry.

If a business model’s viability depends on “nothing bad happening yet,” it’s not a structure designed for sustainable scaling.

The Core Insight: Payment as “Water Flow” Infrastructure

Through repeated dissection of payment mechanics, a clearer metaphor emerged: payment is fundamentally a water flow business.

Those who control the waterway itself accumulate value. Larger flows generate larger profit potential. You capture margin as money streams past your infrastructure. On the surface, this resembles a business that generates income passively—almost “while asleep.”

But this simplicity masks profound complexity. Not every institution standing beside flowing water actually profits. Those generating consistent, long-term returns possess extraordinary control over volume, pressure, backflow, contamination, and leakage. Water volume capacity depends directly on risk tolerance; duration capacity depends on compliance sophistication, regulatory acumen, and risk infrastructure.

Many apparently high-flowing opportunities are actually temporary phenomena—situations where nobody’s yet pulled the emergency stop. It was in understanding this dynamic that I developed genuine respect for the payment industry. Its value lies not in who built another innovative product, but in which sectors actually generate sustainable profits versus which merely generate noise.

Standing at the water’s edge, you see genuine money flows—not PR campaigns.

Why This Business Isn’t for My Team

Payment is an excellent business. It simply isn’t an excellent business for us.

This isn’t philosophical resistance. It’s clear-eyed assessment of resource distribution.

What the industry truly demands isn’t rapid product iteration or technical sophistication. It demands long-term stable banking relationships, sustainable compliance infrastructure, mature risk management capabilities, and regulatory credibility built through repeated interactions over years.

These aren’t acquisitions achieved through effort or intelligence. They’re structural assets gradually accumulated only within specific organizations during specific time windows. A software-focused startup simply cannot compress this timeline.

The harsh reality: continuing would mean competing directly against an industry structure that doesn’t operate in our favor. We’d be relying on time and fortune rather than structural advantage. That’s not rational entrepreneurship.

Remaining Optimistic While Recognizing Reality

Discontinuing Web3 payment work doesn’t reflect bearishness about the industry. The opposite is true: my six-month investigation deepened my conviction that genuine structural opportunities exist.

But opportunities don’t distribute evenly across teams.

Payments represent a prolonged infrastructure transformation—not a short-term market explosion. Global supply chains continue expanding internationally. Cross-border service trades accelerate. Distributed teams proliferate. Each trend amplifies friction in traditional clearing systems. The Web3 value proposition isn’t “cheaper”—it’s threefold:

• Dramatic turnover efficiency improvements
• Complete liquidation process transparency
• Unified settlement across currency zones and regulatory jurisdictions

This constitutes structural transformation, not tactical optimization. By definition, it unfolds across a decade, not quarterly product cycles.

The Real Challenge: Marketplace Financial Systems

Through extended real-world exposure, a more refined understanding crystallized: the difficulty extends far beyond “receiving money”. Particularly within marketplace contexts, payments function as an ecosystem-level financial infrastructure, not standalone components.

Buyers, sellers, platforms, logistics, creators, delivery workers, tax authorities, frozen accounts, subsidy accounts—every participant exists within interconnected financial constraints. The true barrier isn’t payment interface design. It’s:

• Custody and fund-freezing mechanisms
• Revenue sharing and settlement period design
• Fraud detection and risk control
• Cross-jurisdictional compliance

These systems, once stabilized, naturally expand into broader financial capabilities—but they demand extraordinary financial resources, sophisticated risk infrastructure, and patient long-term commitment that startup funding cycles typically cannot accommodate.

The Coming Transformation: Back-End, Not Front-End

A crucial realization: Web3 payment scaling won’t materialize through user-facing disruption. It won’t explode because consumers activate wallets. Rather, it will materialize when enterprises reconstruct their treasury systems, reconciliation protocols, settlement pathways, and fund pools.

The likely trajectory: front-end remains Web2. Back-end transforms to Web3.

This hidden transformation prioritizes system stability, compliance certainty, and sustained operational excellence over market education and user onboarding. Breakthrough points won’t emerge in mature markets.

Geographically, payment growth remains uneven. Asia-Pacific already represents mature infrastructure. Genuine structural expansion will likely emerge from Latin America, Africa, the Middle East, and South Asia—regions characterized by fragmented legacy payment systems, expensive settlement paths, and merchants possessing strong migration incentives.

Conversely, these same markets demand intense localization, regulatory sophistication, and operational commitment. They require patient cultivation, not clever products.

When these opportunities crystallize, the requirement becomes unmistakable: specific resource endowments that our team currently lacks—long-term banking relationships, mature compliance systems, stress-tested risk capabilities, regulatory credibility. This isn’t failure. This is acknowledging structural reality.

The Next Chapter: From Standing on the Waterway to Observing It

Upon deciding to discontinue Web3 payment work, I didn’t experience dramatic closure. Instead, I shifted positions: from attempting to control the waterway itself to observing how water flows and where it ultimately settles.

Through payment mechanism analysis, an important distinction emerged: payment solves liquidity—enabling money movement at speed. But value creation after money circulates depends on where capital accumulates and how it’s managed.

China’s fintech evolution over two decades illustrates this principle cleanly. Alipay and WeChat Pay succeeded as payment gateways, but sustained value concentration emerged through balance products—Yu’ebao, Tiantian Fund, Tianhong. These platforms didn’t win because they “executed payments better.” They won because they occupied the position behind payment infrastructure, capturing and reorganizing already-established fund flows.

Payment constitutes the entry point. Balances represent the transit stage. Sustainable scale and defensible moats emerge from fund management and asset allocation systems.

This same dynamic now emerges in Web3. Non-aggressive but stable asset categories now exist on-chain—lending protocols, short-duration real-world assets, neutral-bias strategies, portfolio products. They function like on-chain money market funds and stable asset allocation tools.

The genuine problem: most participants lack clarity about associated risks and possess no systematic framework for comparing and evaluating on-chain assets. As capital increasingly flows on-chain, this information gap will only intensify.

At this recognition, I realized continuation in this industry remains possible through different positioning. Rather than competing for waterway control, I could clarify waterway structure—delineating boundaries, exposing risks, identifying sustainable allocation zones, and flagging danger areas.

This direction now guides my team and me forward.

This account isn’t intended to conclude the Web3 payment narrative or advise others to advance or retreat. It simply explains why I discontinued this work after honest engagement. Perhaps it helps others navigate similar inflection points, or at minimum, illuminates some pitfalls ahead.