Original | Odaily Planet Daily (@OdailyChina)
Author｜jk
Over the past two years, as the TGE narrative came to an end, crypto has gradually shifted toward compliance, and stablecoin payments have clearly gained momentum.
Before 2023, when people talked about stablecoins, it was mostly around trading, on/off-ramps, and on-chain assets; but now, it is increasingly entering more concrete scenarios such as cross-border collections and payments, corporate settlement, and everyday payments. At the same time, a group of companies building payment businesses around stablecoins has also begun to gradually extend from single U-cards or on/off-ramp tools toward more complete payment systems such as accounts, acquiring, settlement, and card issuance.
DogPay is one of them.
If you don't know DogPay, it is a leading company in Asia's stablecoin payment track: it provides Web3 companies and cross-border merchants with stablecoin acquiring, corporate accounts, Card, and CaaS/BaaS services, with a business network covering more than 140 countries and regions, connected to mainstream settlement networks such as SWIFT, ACH, SEPA, and FPS, and serving more than a thousand enterprise clients. From accounts and acquiring to card issuance and settlement, DogPay is building a global payment infrastructure that connects stablecoins with the traditional financial system.
But beneath the licenses and data, why do clients need a payment service provider? How exactly does a sum of money flow through this system? Compared with traditional solutions, what exactly does a crypto payment solution save?
Odaily Planet Daily found an opportunity to have a one-on-one conversation with DogPay's Co-founder Peter about the compliant payments track.
The following is the full text of the interview:
Odaily: I believe most readers have a general concept of stablecoin payments. Could you give some actual client cases to explain why clients need your solution?
Peter: There is one example that is relatively convenient to share, called MUFY. It is a product company in the AI era, running an AI emotional companionship platform: the platform sets a story background for each character, and users can converse with these characters.
In the process of going global and acquiring users worldwide, this team faced a very high threshold for collecting payments, and it was difficult to build the corresponding product themselves. We provided them with a stablecoin acquiring product, and platform users can directly complete payments using Dogpay's stablecoin payment; whether it is subscriptions or top-ups to purchase credits, this product handles it all.
In addition, our acquiring product has a built-in KYT (Know Your Transaction) system, so the funds enterprises receive are very clean: funds that fail KYT cannot be credited, which is equivalent to providing enterprises with a layer of risk isolation.
Odaily: So MUFY is a traditional AI company, not a Web3 company, right?
Peter: Right. Most of our clients are not Web3 companies, but enterprises engaged in real goods trade or service trade.
For example, some clients in goods trade receive payment for goods directly in stablecoins from South America or Africa. They can exchange the stablecoins into fiat currency at Dogpay and then deposit it into their own corporate account. This is because we directly provide enterprises with corporate bank accounts, and collection, exchange, and crediting can all be completed on the same platform.
Dogpay's Web2+Web3 solution, source: official website
Odaily: How does a sum of funds go from a fiat account to stablecoins, and then become funds disposable by an enterprise? For example, if a user in some small country pays, how does this money enter the enterprise account step by step?
Peter: First, conducting this type of financial service requires a license. At present, we have obtained licenses in Hong Kong, the United States, and Canada, and are also applying for a European license. With licenses, we can cooperate with banks and open large bank accounts.
It can be understood this way: after obtaining the license, the bank grants us account-opening capability, and we are equivalent to a digital bank; clients' account opening is all completed through us. Specifically, under this large account, we open an independent VA (virtual) account for each client. At the same time, the platform also provides clients with an entry point for opening corporate bank accounts, as well as crypto wallets.
After an enterprise completes KYB and KYC and opens an account at Dogpay, it can directly use this system. For example: a mainland enterprise exports a batch of motorcycles to Nigeria and receives payment for the goods in stablecoins. This trade actually occurred, so the enterprise can use the trade contract to transfer the stablecoins into its corporate crypto account with us, and the platform then directly exchanges them into US dollars, which enter the corporate account it opened at Dogpay.
At present, our account capabilities cover US accounts with JP Morgan, as well as accounts with banks such as OCBC and DBS. After a client opens an account, the payment for goods arrives and is exchanged into US dollars; we call this step off-ramp. After the funds are exchanged into the bank account, they are fully compliant income and can be directly used for the enterprise's daily operations. The above is the general process of this chain.
The on-ramp process from fiat currency to cryptocurrency is the reverse. Because what we provide is a fully compliant bank account, taking a JP Morgan account as an example, after a client has this account, it can handle domestic US transfers as well as cross-border remittances through SWIFT, so the channels for funds coming in and out are unobstructed.
Dogpay's enterprise-side collections, source: official website
Odaily: Compared with traditional finance, in which steps does this process reduce losses and improve efficiency?
Peter: Traditional goods trade has an inherent risk: apart from a few mainstream fiat currencies, the exchange rates of the vast majority of countries' currencies in the world fluctuate greatly. So when clients collect fiat currency locally, they have to face the risk of exchange rate changes, and the settlement cycle is also too long; these are the main pain points. Traditional SWIFT remittances take at least a week.
With stablecoin collection, funds directly enter the enterprise's crypto account and are then exchanged into US dollars, which can basically be completed the same day, or even within a few hours. For enterprises, the collection cycle is shortened, efficiency is greatly improved, and exchange losses and other losses are also avoided.
In addition, the volume of stablecoins in trade settlement is growing larger and larger. When we chose this track to start our business, it was also because we expected the settlement scale of goods trade and service trade to grow very quickly.
Odaily: Which product does Dogpay currently use the most? Is it the U-card, bank accounts, or services such as Card as a Service and Bank as a Service?
Peter: These are different types of products. Card as a Service and Bank as a Service open up our underlying capabilities to other companies that want to do stablecoin payments.
Let me give two examples. We have a Vietnamese client who does foreign trade-related payment business locally, but does not have the ability to open a US dollar account themselves, so we provided that capability to them. There is also a Brazilian client who does payments locally but cannot issue U cards. They wanted to issue cards, so we provided them with Card as a Service capability, enabling them to issue US dollar cards locally.
Customer growth for both types of services has been very strong. But in terms of volume, OTC is still the largest, with Dogpay processing about $500 million in funds each month.
Odaily: With such a large volume of traffic, what specific work does Dogpay handle behind the scenes?
Peter: It is mainly divided into two parts. Let me start with the crypto part.
First, the vast majority of enterprises do not have fund management capabilities, nor the ability to do KYT, that is, to ensure that funds are clean. So they need a platform-based product to help them avoid the risk of receiving tainted cryptocurrency.
Second is the acquiring business. Acquiring requires generating a one-time QR code for each user for a specified amount for payment, and also involves a series of tasks such as fund collection. We have already fully developed the entire system for these, so clients can use it immediately upon integration without having to learn crypto knowledge all over again. Risk control, fund collection, and other steps are also included in this system.
Now for the fiat bank account part. If clients had to go to JP Morgan, Standard Chartered, or banks in South Korea on their own to open accounts, the process would take a long time, and the qualification thresholds would be very high. We have already completed filings in these licensed regions, and when helping clients open accounts, it usually takes only two days to get the account approved. KYC and KYB are also completed on our side.
Odaily: In other words, you complete the compliance part on behalf of your clients.
Peter: Yes. We handle compliance and build the infrastructure, so for clients it is plug-and-play.
Odaily: Where do you think the real competitiveness of the crypto card, or U card, market comes from? How is it different from traditional Visa cards?
Peter: Outsiders may think that we are challengers, taking on Visa or Mastercard. But that is not actually the case. Over the past six months, both Visa and Mastercard have been actively integrating stablecoins.
This process can be divided into two stages. Previously, for a period of time, card organizations adopted a model in which stablecoins were pegged to the US dollar: issuing banks still settled with Visa in US dollars, but cards were allowed to accept USD deposits. More recently, some cards already support direct top-ups with stablecoins, and when settlement is completed on Visa's side, stablecoins are also used.
So whether it is traditional card organizations or later fintech service companies, their attitude toward stablecoin U cards is essentially one of co-building. Because with stablecoins, more people can open different US dollar cards instead of being excluded from the service.
For example: there are issuing banks in the United States, issuing banks in Hong Kong, and also in Singapore. In the past, due to business scope restrictions, it was very difficult for a South American user to open a card issued in Singapore. Now, with stablecoins, users can more freely choose cards from different issuing regions according to their actual needs. So overall, this is a process of co-building and expanding service coverage.
For Visa, it has built a very mature global settlement network over the years. Whether it is offline POS machines or online subscription services, these standards were set by Visa, and this part does not need to be overturned. The emergence of stablecoins is about enabling these products to be used by more people.
Therefore, no one is trying to overturn the Visa system. Users' usage habits, whether physical cards, virtual cards, or Apple Pay and Google Pay, do not need to change, nor do they need to relearn anything. It is just that stablecoins have been added as an option at the settlement stage.
Odaily: Compared with other competitors doing payments and U cards, what is Dogpay's biggest competitive advantage and moat?
Peter: I think the biggest advantage is channel capability. All businesses can be seen as supply chain businesses, and the key lies in which link of the supply chain you are in.
Take cards as an example. From top to bottom, this chain is: card organizations, members of card organizations, issuing banks; below issuing banks there are card platforms, and below card platforms there are various white-label distributors. Over the past two years, we have seen many branded cards gradually disappear. The reason is that they used shared BINs, were located downstream in the industry chain, and had relatively weak bargaining power and risk resistance.
Dogpay, however, is at the issuing bank level and can issue independent BINs to help clients issue the cards they want. We do not use shared BINs; instead, we can apply for a separate BIN for each client.
The logic for bank account capability is the same: as our fund volume continues to grow and our licensing capabilities continue to improve, we can continuously gain support from more banks. At present, we have already secured banks in Hong Kong, Singapore, the United States, and South Korea. Once the European license is approved, European banks are also expected to be connected one after another. We continuously obtain better licenses, thereby gaining higher-quality bank resources, and then open these capabilities to clients. The position one occupies in the supply chain determines how high a company can go.
This position is not easy to obtain. Licenses themselves are costly, applications require a long cycle, and some licenses are also difficult to maintain over the long term.
Dogpay's enterprise-side KYB, source: official website
The second advantage is that we understand clients' real needs better. Most of Dogpay's clients are not Web3 companies as outsiders might assume, but traditional enterprises, including those doing foreign trade, those taking services and applications overseas, and companies doing overseas marketing. The business processes and product needs of such clients are quite complex, and through long-term service we have developed a set of standardized solutions.
By contrast, the needs of Web3 companies are usually relatively simple, either fundraising or card issuance, such as white-label cards. Different client groups mean different depth of understanding of clients, and this depth of understanding determines a company's product structure and pace of development.
Odaily: You just mentioned licenses. Could you introduce in detail which jurisdictions you currently hold licenses in? What is the value and application threshold of these licenses?
Peter: Currently we hold an MSO license and a TCSP license in Hong Kong (TCSP is a trust-type license), as well as a money lending license; we hold MSB licenses in the United States and Canada; the European license is still being applied for, and this year we also plan to apply for Singapore's MPI license.
Odaily: Are these licenses difficult to apply for? Everyone says they are highly valuable. Where are the main thresholds?
Peter: The difficulty is that licensed institutions must be especially protective of their reputation, so regulators place correspondingly higher requirements on applicants. During the application stage, regulators conduct stricter reviews of the company's past business record, including all clients it has served.
After obtaining the license and entering the regulatory system, the requirements do not relax. You need to meet higher anti-money laundering standards and regulatory requirements, and service to every client must be carried out strictly in accordance with these standards.
Therefore, licensed companies often move at a relatively slower pace. But there are benefits to being slow: every business can withstand scrutiny, and the company's foundation is built more solidly.
Odaily: Are there any data you can disclose at present, such as customer scale, revenue data, or even ranges?
Peter: We currently process about $500 million in funds each month. On the enterprise client side, we just surpassed 1,000 not long ago, and now have more than 1,000 enterprise clients.
Odaily: Do you provide different solutions for different regions and different types of clients (high-frequency, low-frequency, large-amount, small-amount)?
Peter: We have many products: card issuance, bank account capability, OTC, and cards for direct enterprise use, among others. We call this "flexible combination."
Clients can choose only one of the services, for example, just open an account, or only receive payments or only make remittances; they can also freely combine them according to their own business needs, for example, adding acquiring, card issuance, or card usage on top of an account. You can understand us as providing enterprises with a complete infrastructure for fund flows.
Recently, we also added AI router capabilities. We found that in addition to receiving and making payments, enterprises have a large amount of expenditure that needs to be managed, and the cost of using AI is one of them. And our judgment is that starting this year, not many companies will still emphasize "I've integrated AI," just as today no company would specifically emphasize "I'm connected to the internet"—AI has become a kind of infrastructure. So we launched the router product, which routes and centrally connects mainstream large models, and then provides them to customers for use.
In terms of usage, customers can create an enterprise account on the platform and then allocate quotas to different employees. Each employee's usage is controllable, and enterprises manage everything centrally through the backend account, with all expenditures clear at a glance.
The logic of this product is actually very similar to our corporate cards. After an enterprise opens an account with us, it can issue employee spending cards to all employees. In the past, employees' travel and daily expenses often had to go through reimbursement processes, which were cumbersome; now our design is to directly allocate a quota to each employee, who then spends by card, and it can be pre-set which products the card can be used for and which it cannot. In this way, enterprises no longer need to go through complex approval processes.
Overall, we integrate enterprises' payment collection, expenditure, and other links together to form a complete set of enterprise infrastructure.
Odaily: Which cross-border payment scenarios do you think are most suitable for stablecoins? And which are less suitable?
Peter: There are several levels of reasons here, so let me say a bit more.
When stablecoins were first issued, their volume was very small and liquidity was limited, so they could only solve very limited problems, mainly concentrated in DeFi and trading. But after the GENIUS Act, including the new bills to be introduced next, the scale of stablecoins will continue to grow. After the scale grows, there will be spillover effects: previously, because of insufficient liquidity, it could only stay within the crypto circle; once the issuance volume becomes large, it can cover multiple scenarios, including trade, gaming payments, product subscriptions, and even daily life. This is an inevitable trend of development.
So theoretically, we believe all scenarios can use stablecoins for settlement. It's just that in the past, because the issuance volume was not enough, only a small portion of customers realized this first; as time goes by, it will become a very widely used currency.
Another benefit is that we are now researching agent payments. Stablecoins are a programmable currency in the world. Agent payments involve many aspects, such as usage-based billing, including ultra-micro billing, and I believe everyone will soon see this type of product, that is, some new business models.
Past business models had to rely on cards for payment, so some relied on subscriptions, and some were fiat-payment e-commerce. But after the emergence of agent payments, what everyone is currently discussing is the x402 protocol, and some companies are also trying the logic of MPP (machine payments platform). After this type of infrastructure emerges, some new business models will arise in the future, such as ultra-small usage-based billing, and agents can also generate revenue instead of only consuming large models and generating expenses. In the future, agents can also make money for people.
We very much look forward to seeing this type of business model, which is also the reason we have integrated the relevant capabilities in advance and built the infrastructure first. When this type of new customer arrives in the future, they can also directly call it with one click on our platform to explore.
Odaily: During the entrepreneurial process, especially in building Dogpay, were there any of the most interesting or most difficult stories?
Peter: If we talk about difficulties, it's actually that we have moved relatively slowly. The whole team insists on running this company according to a compliance-oriented logic, so the overall pace is on the slower side, and we have basically done no PR externally.
But looking back, the most difficult times were actually not that bad. Precisely because we were slow, our growth has been relatively steady, and we have not encountered particularly big hurdles—that's the truth.
During this "slow" period, we also saw many fintech companies that were issuing cards at the same time run into problems one after another: some have already gone bankrupt, some encountered security incidents, and some collapsed because of business violations and funds being clawed back. In financial services, what you are essentially selling is trust. Our customers also hope we are more steady: you can be slower, and your prices can be higher, but you must provide sufficiently stable services.
On price, we indeed do not have an advantage, but we have also never engaged in price wars. We are clear that behind many low prices in the market, companies are using subsidies to exchange for customers. We do not believe that the internet playbook applies to the financial services industry, that is, relying on subsidies to exchange for customer groups, because such subsidies themselves are unsustainable.
