Encryption Payment Development Trends: Key to Breaking Through the "Last Mile"

Encryption payments are gradually entering the practical application stage, with payment methods centered around stablecoins quietly emerging. According to a 2024 report from a certain data platform, the platform has processed over 1.6 million encryption payment transactions, of which 35.5% were completed using stablecoins. At the same time, many traditional payment giants are also entering this field.

However, despite the fact that encryption payments technically have the functionality for real-life payments, widespread adoption still faces the "last mile" challenge. A certain research institution predicts that between 2024 and 2026, the number of encryption payment users in the United States will grow by 82%, but the usage rate will only increase by about 20%, reaching 39.1%. Globally, it is expected that by 2026, only 2.6% of users will use encryption payments.

There are multiple reasons for the formation of this situation. Let us delve into the current status and challenges faced by the encryption payment industry chain.

Encryption Payment Industry Chain Overview

The ideal encryption payment scenario should be like this: when buying drinks at a convenience store on the street abroad, you only need to open your mobile wallet, scan the code, and use cryptocurrency to complete the payment, without needing a bank card, without complicated binding, and the settlement is completed instantly.

To achieve this seamless and convenient payment experience, a complex and collaborative infrastructure is needed for support. From asset issuance, payment transit, user entry to merchant terminals, every link is essential.

asset issuance

In the field of payments, although theoretically any encryption asset can be used, in practical applications, considering price volatility and the stability of payment settlements, Bitcoin and stablecoins have become the most commonly used payment mediums, with stablecoins dominating in terms of transaction volume and amount.

Currently, the main stablecoin issuers include Circle (USDC), Tether (USDT), and a certain payment platform (PYUSD). USDC and USDT are widely circulated across multiple blockchain networks, becoming mainstream payment methods. According to a report from a certain data platform, USDT's trading volume accounts for as much as 97.2%, with USDC in second place.

Stablecoin issuers are actively expanding their collaboration channels with payment gateways, cross-border settlement platforms, and traditional financial institutions. For example, Circle has partnered with a payment company since 2023 to integrate USDC into its cross-border settlement network, covering approximately 190 countries and effectively reducing friction costs in traditional foreign exchange transactions.

payment transfer

The payment transit link plays a key role in connecting on-chain asset flows with the off-chain consumption system. The native encryption payment transit service focuses on bridging on-chain assets and the real fiat currency system, undertaking key functions such as asset exchange, transaction matching, and payment clearing.

At the same time, traditional payment giants are also accelerating their expansion into the encryption payment sector. In February 2025, a certain payment company acquired the stablecoin infrastructure platform Bridge for $1.1 billion, officially laying out its plan in the on-chain settlement field. Another payment giant chose to collaborate with Circle to support USDC clearing in its cross-border settlement network and gradually expand to high-performance public chains.

User Entrance

In the early development of encryption payments, users mainly used encryption debit cards, U cards, and other payment gateways to convert on-chain assets into fiat currency account balances, and then connect to traditional clearing systems for consumption payments. Although this model broadens the asset usage scenarios, it still relies on traditional financial infrastructure.

As wallet applications continue to evolve, on-chain wallets are gradually becoming a new user entry point for encryption payments. Mainstream wallets not only perform functions such as user asset management and transaction signing but also enable users to initiate payment requests directly through methods like scanning QR codes by integrating on-chain payment APIs or third-party payment gateway interfaces, allowing them to use stablecoins and other on-chain assets for consumption, bypassing the traditional fiat currency account system.

merchant terminal

Merchant terminals cover industries such as retail, e-commerce, tourism, and hotels, and are the ultimate application scenario for the large-scale popularization of encryption payments in the real world, serving as the core driving force for the completion of the industrial chain's closed loop.

In recent years, with the proliferation of stablecoins, the maturity of payment gateway technology, and the shortening of settlement cycles, merchants' enthusiasm for integrating encryption payments has gradually increased. According to a report, by 2024, the number of merchants accepting encryption payments globally will reach 12,834, a 50% increase from 2023. Among them, Europe leads with 5,677 merchants, while Brazil ranks first among countries with 1,292 merchants.

Some regional markets, such as Southeast Asia and Latin America, which are emerging economies with a high penetration of mobile payments, have become pioneers in the application of encryption payments. Several payment platforms have collaborated with local merchant networks to promote the implementation of encryption payments in actual consumption scenarios, gradually breaking the path dependence of traditional payment systems.

The crux of the "last mile": Why is it stuck at the consumer end?

Despite the continuous improvement of the stablecoin settlement system and the ongoing evolution of wallet functions, encryption payments have still not penetrated daily consumption scenarios. From a technical and product perspective, users can quickly settle using cryptocurrencies, but on the real consumption side, the lagging user experience constitutes an insurmountable "last mile."

integration cost is high

Currently, one of the biggest obstacles for encryption payments on the merchant side comes from the "separation between wallets and merchant systems". Due to the lack of a unified standardized structure, merchants often need to develop separately for different wallets and different chain environments when integrating encryption payments, significantly increasing integration difficulty and costs.

A survey by a consulting firm indicated that 89% of the participating companies stated that the complexity of integrating digital currencies with existing financial infrastructure is one of the main challenges. In response, industry experts suggested that by connecting all wallets with the blockchain, supporting instant settlement of stablecoins, and offering zero transaction fees, global merchants and users can easily transact in encryption.

long settlement period

Although on-chain payments theoretically support second-level settlement, the settlement process in practical business environments still heavily relies on traditional payment infrastructure. Taking a certain payment company as an example, while it provides on-chain payment functionality, merchants typically have to wait 2-3 working days to complete the funds arrival. This delay poses a significant cash flow management obstacle for retail and cross-border trade enterprises that have high liquidity requirements.

ecological island

The resistance on the user side comes from the increasingly severe fragmentation trend of the encryption payment ecosystem in a multi-chain environment. When users make on-chain payments, they often need to manually switch chain networks or wallet plugins, increasing operational complexity and affecting payment smoothness. At the same time, some large payment platforms, due to their platform locking strategies, deeply bind merchants within their own ecosystem, limiting their flexibility to switch to other payment networks and exacerbating the "ecological island" phenomenon.

high volatility

Even if merchants successfully adopt encryption payments, the issue of asset value instability caused by price fluctuations remains one of the key factors restricting its large-scale application. Compared to the stable and predictable settlement amounts in fiat payment systems, during on-chain payments, especially when using highly volatile assets such as Bitcoin and Ethereum, merchants face a significant risk of exchange rate losses.

Even a stablecoin-based encryption payment model is not completely risk-free. For example, during extreme market conditions, some pegged stablecoins have experienced temporary de-pegging, raising concerns among merchants. Furthermore, most current encryption payment solutions have not achieved price locking at the moment of payment initiation (i.e., locking the settlement exchange rate at the instant the payment is initiated), which causes price slippage generated by on-chain confirmation time during the payment process, further amplifying the risk exposure for merchants.

The Future of Encryption Payments

Looking back at the development of encryption payments, we find that what has always been lacking is not technology, but a real "usability leap"—from on-chain accounts to merchant terminals, from wallet operations to daily habits. Currently, the prerequisites for this leap have already matured:

• Stablecoin regulation is gradually being implemented, with major issuers actively promoting industry compliance standards in multiple locations around the world;
• The standardization of global payment interfaces is advancing, for example, multiple countries in Southeast Asia are promoting national QR payment interconnection standards;
• Cross-chain interoperability protocols are also breaking down ecosystem fragmentation and building a universal asset circulation network.

The puzzle of infrastructure is being completed, and the widespread adoption of encryption payments is also just around the corner. At this point, what truly determines whether encryption payments can overcome the "last mile" is not the superiority of the protocol or the multitude of functions, but whether it can provide merchants and users with a usage experience that requires "no understanding of blockchain."

When off-chain merchants no longer need to integrate multiple wallet SDKs, users do not have to switch chain networks or bear slippage costs, and when encryption assets are no longer just investment targets but become "daily currency" in restaurant scanning, app subscriptions, and cross-border settlements, is when encrypted payments can be considered truly realized.

This requires not only technological openness but also a deep understanding and continuous optimization of "scene adaptation", "merchant trust", and "user fluency". Only by bridging this "last mile" can we truly welcome the era of large-scale encryption payments. The widespread adoption of encryption payments is not limited to the blockchain, but also lies in that instance of QR code payment on the streets.