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

From PayPal to Stripe, from stablecoins to Agents, four generations coexist in the payment industry. Will this time lead to victory?

Written by: Zuo Ye

A storm is brewing, and Stripe is attempting to acquire PayPal again. 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 peril for us. Twenty years ago, Peter Thiel embarked on his journey from payments, uniting the PayPal mafia. Wherever Musk went, the public welcomed him with open arms, truly seizing the moment. That vibrant, flourishing scene is still vivid in our minds. Has Payment really transformed into our graveyard in just twenty years?

Growth is a miracle, stablecoins are not

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

Stripe's various efforts are all aimed at the elusive dream of going public. Amid the pandemic's monetary easing, Stripe first touched a $100B valuation.

However, it did not follow in the footsteps of Coinbase and others to go public, leading to a continuous decline in its valuation, mistaking the era's opportunities for personal efforts. Thus, after much reflection, Stripe embarked on a path of mergers and acquisitions.

Stripe started with a developer-friendly model, offering one-click API integration, which is highly attractive to 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-end and stablecoins from the C-end, even laying out the ACP/MPP protocols on the Agent side, aiming to reshape the entire payment industry.

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

1. The payment industry remains highly fragmented; by defining a country, an industry, or even a few companies, one can continue to survive without being directly eliminated by external forces;
2. Payments are an appendage of the banking industry; developers and B/C-end enterprises ultimately externalize the banking process, and stablecoins are eventually 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 difficult to replicate Stripe's past glory.

The current proposal to acquire PayPal is actually Stripe's attempt to use stablecoins to address its failures on the C-end, trying to fill the gap in its own C-end business with PayPal's operations.

PayPal's issue 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 slightly later, still wants to increase its narrative possibilities before going public.

If Stripe captures the backend developer market, 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 they cannot touch Tether at all.

If Stripe's ceiling is only Coinbase or Circle, then its IPO is destined to face a downturn. 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; they are a visible trend;
• Agents still need to find an entry point to enter the current system.

In the 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.

A-end (future), B-end, C-end, D-end (initial success), 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 the future cannot be reached in the short term, then expanding scale and ecosystem is the only point where Stripe can exert force; you can understand Stripe as a kind of option product.

• Agents will use OUSD stablecoins, running on Tempo, and 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 Agentic Payment is covered by new concepts, so Stripe at least still has its own business.

Investment losses are certainly a misstep, 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 consideration.

Payments are just an entry point; value-added services are profitable

Agents are a future that is visible to the naked eye, 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 a decisive factor.

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 such as 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.

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

Stablecoins still need entry points such as deposits and on-chain circulation, as well as exits like cashing out, which is also the compliance foundation of the banking industry.

In the past 30 years of the FinTech wave driven by the internet, the banking industry has ultimately strengthened its control over payments, unlike publishing, consumption, entertainment, and dining, which have been directly transformed or even disappeared.

Under the technological wave, banks have become increasingly transparent, but they still control 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 regions and sectors, while licenses and sovereign boundaries are merely acknowledgments of reality.

But 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 intersecting forms of the future 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, while OUSD directly shares profits with partners. Both sides have already started internal competition, which is certainly not the future.

However, the clearing system allows the two public chains to earn profits from payment and stablecoin network effects purely based on funding efficiency without forcibly subsidizing partners for the first time.

The clearing system is not complicated; traditional fiat clearing relies on card organizations, SWIFT, 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 profit-sharing from stablecoins.

The clearing network has the potential to partially detach from the commercial banking system and retain profits within itself.

Conclusion

Stripe missed the IPO window during the pandemic and has entered the trench warfare of third-party payments. This battle is an eternal Verdun model, where small players in various regions and industries can never be crushed by scale.

A different approach must be taken, facing the banking industry with efficiency. From PayPal to Stripe, from stablecoins to Agents, four generations coexist in the payment industry. Will this time lead to victory?