The Eternal Fragments of Money: Third-party Payment Lacks First Principles

Author: Zuoye web3

A storm is brewing, and Stripe is attempting to acquire PayPal. The tides have turned; the last time this happened was 30 years ago when Peter Thiel's PayPal merged with Elon Musk's original X.com.

I don't understand why everyone is talking about PayPal's sluggish growth, as if this FinTech track is fraught with danger for us. Twenty years ago, Peter Thiel embarked on his journey from payments, starting his first venture, and the PayPal mafia was unified. Wherever Musk went, the public welcomed him wholeheartedly, truly seizing the moment. That vibrant, flourishing state is still vivid in our minds. Just twenty years later, has Payment really transformed into our graveyard?

Growth is a Miracle, Stablecoins Are Not

Stripe's failure to go public during the pandemic now seems like a blunder.

Stripe's various efforts are all aimed at the elusive dream of going public. Against the backdrop of massive liquidity during the pandemic, Stripe first touched a $100B valuation.

However, it did not follow in the footsteps of Coinbase and others going public, leading to a continuous decline in its valuation, mistakenly treating the opportunity of the times as personal effort. Thus, after deep reflection, Stripe embarked on the acquisition path.

Stripe started with a developer-friendly model, with one-click API integration, which is quite enticing for developers. This is also the most unique approach in the payment industry, not getting bogged down by fees and scenarios, but reaching the actual people behind the scenes.

Stripe hopes to repeatedly leverage its experience, entering the acquiring system from the B-side, stablecoins from the C-side, and even laying out the ACP/MPP protocols on the Agent side, aiming to reshape the entire payment industry.

Image Caption: Stripe's bumpy road to going public

Image Source: @zuoyeweb3

The payment industry has always had two characteristics that hinder Stripe's continued progress:

1. The payment industry is highly fragmented. The landscape remains unchanged; by defining a country, an industry, or even a few companies, one can continue to survive, unable to be directly eliminated by external forces.
2. Payments are an accessory to the banking industry. Developers and B/C-side enterprises ultimately externalize the banking processes, and stablecoins will eventually be brought into the fold by banks.

Especially with the series of acquisitions related to stablecoins, from the issuance of Bridge to the wallet entry of Privy, and even Tempo and OpenUSD, it is very difficult to replicate Stripe's past glory.

This acquisition proposal for PayPal is actually Stripe's attempt to use stablecoins to address the setbacks in the C-side, trying to fill its gaps with PayPal's C-side business.

The problem with PayPal is not that it cannot keep up with the times; from Venmo to PYUSD, nothing has saved PayPal from its downward trend.

In other words, PayPal is simply too old. The structural dysfunction of the entire enterprise cannot be revived just by launching new businesses.

Stripe, which started a bit later, still wants to increase its narrative possibilities before going public.

If Stripe captures the developer market on the backend, then the stablecoin market captures the frontend— the story of the issuance network has likely already ended. Tempo and OpenUSD may impact Circle's stock price, but cannot touch Tether at all.

If Stripe's ceiling is only Coinbase or Circle, then going public is destined for a fate of underperformance. Compared to Adyen's market value and Airwallex's valuation, Stripe's stablecoin narrative and X Agent narrative are useful.

Stablecoins are not part of the current payment system's daily operations; they are a visible trend.

Agents still need to find an entry point to enter the current system.

In the positive news, Agents are already using stablecoins to buy computing power and tokens, but aside from the suspicion of quantity, Agents still have not entered the Web3 business, let alone more conservative companies and banking systems.
Image Caption: Agents are currently mainly used for volume manipulation

Image Source: @BarkerMoneyX

A-side (future), B-side, C-side, D-side (getting rich), but Stripe's valuation is hard to escape the reasonable value cap of $50 billion in FinTech; $100 billion includes too much proactive imagination.

If it cannot briefly reach the future, then expanding scale and ecosystem, is the only point where Stripe can exert force. You can think of Stripe as an option product.

• Agents will use OUSD stablecoins, running on Tempo, Stripe should be at the level of Visa;
• Agents will use stablecoins, but if OUSD fails and Tempo captures part of the market, Stripe should have a valuation of $100 billion + Tempo's public chain valuation;
• The Agent economy is hard to realize, and if Agentic Payment is covered by new concepts, then at least Stripe still has its own business.

Investment losses are certainly a blunder, but missing out will lead to lifelong regret. Starting from the challenges Stripe faces in the primary market, how the entire payment industry will evolve is also worth further contemplation.

Payment is Just an Entry Point, Value-Added Services Profit

Agents are a visible future, provided they can survive until that day.

Standing in mid-2026 is a very subtle node, with a clear legislative window for the final passage, stablecoin yields may be decisive.

At the same time, the long-term future of the Agent economy is now focused on alternative models for white-collar and blue-collar workers, as well as hardware fields like new wearable devices and AIOS phones.

The transformation of payments by Agents has not sparked social attention, and there is reason to believe that this is a hidden opportunity for stablecoins, a β opportunity brought by the times.

Image Caption: The eternal movement of the payment industry

Image Source: @zuoyeweb3

However, the operational model built by the payment industry in the past using "licenses + localization" may face continuous shocks from the clearing network.

Stablecoins still need entry points like deposits on the frontend, as well as on-chain circulation and monetization on the backend, which is also the compliance foundation of the banking industry.

In the past 30 years of the FinTech wave driven by the internet, it has ultimately enhanced the banking industry's control over payments, and has not been directly transformed or even disappeared like publishing, consumption, entertainment, and dining.

Under the technological wave, banks have become increasingly transparent, but they still hold the terminal touchpoints of cash and account opening. In a sense, the fragmentation of the payment industry can be attributed to the segmentation of banks by sectors and regions, while licenses and sovereign boundaries are merely acknowledgments of reality.

However, in the actions of Stripe and Circle, there lies another possibility for payments: frontend stablecoin customer acquisition and backend clearing profitability.

Stripe and Circle are actually quite similar, representing the future intersection of FinTech and Crypto, both working on public chains (Tempo vs Arc), stablecoins (OUSD vs USDC), and clearing networks.

The reason it is not a revenue-sharing model for stablecoin issuance is that Circle has already begun subsidizing Hyperliquid channel partners, and OUSD directly shares profits with partners. Both sides have already started to engage in internal competition, which is certainly not the future.

However, the clearing system allows both public chains to earn revenues from payment and stablecoin network effects purely based on capital efficiency, without the need to forcibly subsidize partners.

The clearing system is not complicated; traditional fiat clearing relies on card organizations, SWIFT, various central banks, and commercial banks, which have become overburdened.

Emerging stablecoin public chains, however, have no historical burdens and can focus on improving clearing efficiency. As Circle and Stripe obtain the OCC charter bank license (conditionally approved), they will inevitably move towards clearing after stablecoin profit sharing.

And the clearing network may partially detach from the commercial banking system, keeping profits within itself.

Conclusion

Stripe missed the window to go public during the pandemic and has entered the trench warfare of third-party payments. This battle is an eternal Verdun model, where it can never crush the small players in the region and various industries by scale alone.

A different approach must be taken, using efficiency to face the banking industry. From PayPal to Stripe, from stablecoins to Agents, the payment industry has four generations coexisting. Will this time lead to victory?