Stablecoins Overtake Traditional Payment Networks

PayFi is a growing category of applications that use stablecoins and smart contracts to create payment infrastructure. This new type of payment system is replacing traditional wire transfers, which can be slow and expensive.

The cost of wire transfers comes from the correspondent banking system, where payments are passed through multiple intermediary banks that charge fees and introduce processing time. According to the World Bank, the global average cost of sending $200 is approximately 6.2 percent, or $12.40 in fees.

Stablecoin transfers eliminate most of this intermediary chain. Sending $USDC from one wallet to another on Solana costs less than one cent in transaction fees and settles in under two seconds. This is different from a wire transfer, where settlement finality depends on the clearing system and can technically be reversed.

The infrastructure that makes stablecoin transfers possible has three layers: the stablecoin itself, the blockchain network, and the on-ramp and off-ramp. The choice of network affects transaction speed, cost, and ecosystem availability.