Alice Li, Investment Partner at Foresight Ventures, discusses how PayFi empowers the unbanked in emerging markets like Morocco and Vietnam by enabling access to stable digital assets and inclusive wealth-building tools.
Traditional cross-border systems rely on a complex network of intermediaries that drive up fees and delays. Banks and legacy payment processors charge steep fees—as Foresight Ventures latest report shows, these fees often range from 6% to 8%—to cover their costs and margins, and transactions can take days to clear.
This is especially problematic in regions like Africa, where banking infrastructures are underdeveloped and financial inclusion levels remain low. Many people in these regions are unbanked, and they have access to limited financial services. So, they have no option but to rely on expensive remittance channels.
For example, when someone sends money from Nigeria to Ghana, the transfer often passes through various agents and correspondent banks, each charging its own fee that can add up to the transfer amount. These layers of middlemen are necessary to handle currency conversion and settlement but end up inflating costs significantly.
Also, the local financial systems in many African countries still rely on legacy technology, which means that transactions are processed manually or with limited automation. As a result, everyday users, especially those sending remittances to support family needs, face massive financial and time-related burdens.
Blockchain’s decentralised nature removes the need for a central authority, allowing every participant to access a shared ledger of transactions. The process doesn’t pass through multiple banks or payment processors when you send funds using a blockchain system.
Instead, transactions are verified by a network of independent nodes through consensus protocols. This means that fees are considerably lower since you’re not paying for layers of intermediaries.
Transparency comes into play because every transaction is recorded on an immutable public ledger. So, anyone can track and verify the flow of funds. This openness and peer-to-peer mechanism streamlines the whole process and adds real-time visibility to cross-border transactions.
Many in these regions face high fees and delays when using traditional banking for cross-border transfers. With legacy systems ill-equipped to provide efficient services, users have turned to crypto payments to bypass these challenges.
For instance, individuals sending remittances can save money and time by avoiding multiple intermediaries that typically add significant costs to the process. Crypto payments offer a seamless way to manage international transactions. Millennials and Gen Z, in particular, appreciate the borderless nature and user-friendly experience that these digital alternatives provide.
PayFi bridges the gap between on-chain yields and everyday spending by automating the conversion of generated returns into immediate spending power. Users deposit assets that participate in decentralised finance protocols, where they earn stable returns—typically between 5% and 8% annually—from methods like staking and liquidity provision. These yields are then funnelled directly into a payment account in real-time, without needing manual withdrawals or additional conversion steps.
Instead of waiting for funds to be transferred or converted, users can directly tap into their growing asset balance through stablecoins like USDT or USDC, which provide a familiar, low-volatility medium for transactions.
For example, a user earning returns from staking can have those profits automatically converted and applied to pay monthly bills without any extra steps. Similarly, someone could use the gains from liquidity provision to cover grocery costs instantly.
Crypto wallets today do so much more than just storing your digital assets. They have full-fledged DeFi functionalities like asset management, trading, and even direct payments. Many crypto wallets can connect users with a broad range of financial services through DeFi protocols, smart contracts, and built-in exchanges.
There are Web 3 wallets where you can sign up, transfer your holdings, and directly participate in staking, lending, and liquidity pools for yield generation, all within the same interface. So, users can manage their portfolios while generating returns and converting gains into everyday spending power without switching between multiple platforms.
In essence, crypto wallets have now evolved into a one-stop application for maximising capital efficiency.
In our latest research, we see that nearly 70% of the population in countries like Morocco and Vietnam remain unbanked. They also have a currency devaluation problem. So, PayFi offers a lifeline by allowing users to hold and transact in stablecoins such as USDT and USDC, bypassing local currency restrictions and volatile financial environments.
It also gives users an opportunity to access yields far greater than traditional savings rates. With stablecoins, they can participate in DeFi protocols, stake assets, or join liquidity pools to earn yields. This approach secures their assets in a stable form and creates opportunities to grow wealth incrementally over time.
In practice, someone in Vietnam could easily convert their earnings into stablecoins for daily spending while watching their digital assets appreciate. It boosts their capital efficiency and economic participation, ultimately creating greater financial inclusion.
About Alice Li
Alice Li is an Investment Partner at Foresight Ventures, where she focuses on accelerating consumer adoption of Web 3 through investments in stablecoin infrastructure, payment systems, AI applications, and social media platforms. Prior to Foresight, she honed her expertise in product growth at TikTok and Amazon. She bridges Web 2 execution strategies with Web 3 innovation to scale blockchain solutions for mainstream users, with an expertise to identify early-stage consumer-friendly startups.
About Foresight Ventures
Foresight Ventures is the first and only crypto VC bridging East and West and a Top 5 Most Active Crypto VC in 2024. With a research-driven approach and offices in the US and Singapore, they are a powerhouse in crypto investment and incubation. They aggressively invest in the most daring innovations. They are dedicated to partnering with visionary projects and top teams to help them succeed, reshaping the future of digital finance.
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