Interview with DogPay Founder: Slow is Fast, From U Card to Global Payment Network

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| Odaily Planet Daily (@OdailyChina)

Author｜jk

In the past two years, as the TGE narrative has come to an end, the crypto space has gradually shifted towards compliance, and the popularity of stablecoin payments has significantly increased.

Before 2023, discussions around stablecoins were mostly centered on trading, deposits and withdrawals, and on-chain assets; however, now they are increasingly entering more specific scenarios such as cross-border payments, corporate settlements, and daily transactions. Meanwhile, a number of companies focused on stablecoin payments have begun to evolve from a single U Card or deposit/withdrawal tool to a more complete payment system encompassing accounts, acquiring, settlement, and card issuance.

DogPay is one of them.

If you are not familiar with DogPay, it is the leading company in the Asian stablecoin payment sector: it provides stablecoin acquiring, corporate accounts, Card, and CaaS/BaaS services for Web3 enterprises and cross-border merchants, with a business network covering over 140 countries and regions, and connecting to mainstream settlement networks such as SWIFT, ACH, SEPA, and FPS, serving over a thousand corporate 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 payment service providers? How does money flow within this system? What exactly does the crypto payment solution save compared to traditional solutions?

Odaily Planet Daily found an opportunity to have a one-on-one conversation with DogPay's Co-founder Peter about the compliant payment sector.

Odaily: I believe most readers have a general understanding of stablecoin payments. Could you provide some actual client cases to illustrate why clients need your solutions?

Peter: One example that is convenient to share is MUFY. It is a product company in the AI era, creating an AI emotional companionship platform: the platform sets a story background for each character, allowing users to converse with these characters.

This team faced high barriers to payment collection while going global and acquiring users, making it difficult to create corresponding products themselves. We provided them with a stablecoin acquiring product, allowing platform users to directly use Dogpay's stablecoin for payments, whether for subscriptions or purchasing points, all handled by this product.

Additionally, our acquiring product has a built-in KYT (Know Your Transaction) system, ensuring that the funds received by enterprises are clean: funds that fail the KYT check cannot be credited, effectively providing a layer of risk isolation for enterprises.

Odaily: So MUFY is a traditional AI company, not a Web3 company, right?

Peter: Correct. Most of our clients are not Web3 companies but enterprises engaged in real goods trade or service trade.

For example, some clients involved in goods trade receive payments in stablecoins directly from South America or Africa. They can exchange stablecoins for fiat currency on Dogpay and deposit them into their company accounts. This is because we provide companies with corporate bank accounts, allowing collection, exchange, and crediting to be completed on the same platform.

Dogpay's Web2+Web3 solution, source: official website

Odaily: How does a fund flow from a fiat account to a stablecoin and then become available funds for enterprises? For example, when a user from a small country makes a payment, how does the money step by step enter the enterprise account?

Peter: First, to provide such financial services, one must hold a license. Currently, we have obtained licenses in Hong Kong, the United States, and Canada, and are applying for a European license. With a license, we can cooperate with banks to open large bank accounts.

It can be understood this way: after obtaining the license, the bank grants us the ability to open accounts, making us akin to a digital bank, with customer account openings completed through us. Specifically, under this large account, we open independent VA (Virtual) accounts for each client. At the same time, the platform provides clients with access to open corporate bank accounts and cryptocurrency wallets.

After enterprises complete KYB, KYC, and account opening on Dogpay, they can directly use this system. For example, a mainland enterprise exports a batch of motorcycles to Nigeria, receiving payment in stablecoins. This trade is real, so the enterprise can transfer the stablecoins into its corporate crypto account with us based on the trade contract, and then the platform directly exchanges it for USD, entering its corporate account opened at Dogpay.

Currently, our account capabilities include JP Morgan accounts in the U.S., as well as accounts from OCBC, DBS, and other banks. After clients open accounts, funds are credited and exchanged for USD; this step is what we call off-ramp. Once the funds are converted into the bank account, they are fully compliant income that can be used directly for the enterprise's daily operations. This is the general process of this chain.

The on-ramp process from fiat to cryptocurrency is the reverse. Because we provide fully compliant bank accounts, using a JP Morgan account as an example, once clients have this account, they can conduct domestic transfers in the U.S. and also make cross-border remittances via SWIFT, so the channels for funds to enter and exit are smooth.

Dogpay's enterprise payment collection, source: official website

Odaily: Compared to traditional finance, in which aspects does this process reduce losses and improve efficiency?

Peter: Traditional goods trade has an inherent risk: aside from a few mainstream fiat currencies, the exchange rates of most currencies in the world fluctuate significantly. Therefore, clients face the risk of exchange rate changes when receiving fiat currency locally, and the settlement cycle is also too long, which are the main pain points. If using traditional SWIFT remittance, it takes at least a week.

In contrast, by receiving payments in stablecoins, the funds directly enter the enterprise's crypto account and are exchanged for USD, which can be completed basically on the same day, or even within a few hours. For enterprises, this shortens the payment cycle, significantly improves efficiency, and also avoids exchange losses and other losses.

Moreover, the volume of stablecoins in trade settlements is increasing. We chose to start a business in this sector because we anticipated that the settlement scale of goods trade and service trade would grow rapidly.

Odaily: What is currently the most used product of Dogpay? Is it the U Card, bank account, or services like 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 our underlying capabilities to other companies that want to engage in stablecoin payments.

To give two examples. We have a client in Vietnam engaged in foreign trade-related payment business but lacks the ability to open a USD account, so we provided them with that capability. Another client in Brazil is doing payments locally but cannot issue U Cards; they wanted to issue cards, so we provided them with Card as a Service capabilities, allowing them to issue USD cards locally.

Both types of services have seen significant client growth. However, in terms of volume, the largest remains OTC, with Dogpay processing approximately $500 million in funds each month.

Odaily: With such a large flow, what specific work does Dogpay undertake behind the scenes?

Peter: It mainly divides into two parts. First, let’s talk about the crypto part.

First of all, the vast majority of enterprises lack the capability to manage funds and do not have the ability to perform KYT, which is to ensure that the funds are clean. Therefore, they need a platform product to help them avoid the risk of receiving contaminated cryptocurrencies.

Secondly, there is the acquiring business. Acquiring requires generating a one-time QR code for payment for each user based on a specified amount, and involves a series of tasks such as fund aggregation. We have already developed a complete system for this, allowing clients to access it without needing to learn about the crypto field again. Risk control, fund aggregation, and other aspects are also included in this system.

Now, regarding the fiat bank account part. If clients were to find JP Morgan, Standard Chartered, or banks in Korea separately to open accounts, the cycle would be very long, and the qualification requirements would be very high. We have completed the filing in these licensed regions, helping clients open accounts typically within two days. KYC and KYB are also completed here.

Odaily: So you have completed the compliance part for clients.

Peter: Yes. We have handled compliance and built the infrastructure, making it plug-and-play for clients.

Odaily: Where do you think the real competitive advantage of the crypto card or U Card market comes from? How does it differ from traditional Visa cards?

Peter: The outside world may think that we are challengers, taking on Visa or Mastercard. But the reality is not like that. In the past six months, both Visa and Mastercard have been actively integrating stablecoins.

This process can be divided into two stages. Previously, card organizations adopted a method where stablecoins were pegged to the USD: issuing banks still settled with Visa in USD but allowed cards to accept USD deposits. Recently, some cards have started to support direct deposits in stablecoins, and when settling on the Visa side, stablecoins are also used.

Therefore, whether it is traditional card organizations or later financial technology service companies, their attitude towards stablecoin U Cards is essentially about building together. With stablecoins, more people can open different USD cards instead of being excluded from services.

For example, there are issuing banks in the U.S., Hong Kong, and Singapore. In the past, due to operational limitations, it was very difficult for a South American user to obtain a card issued in Singapore. Now, with stablecoins, users can more freely choose cards issued in different regions according to their actual needs. So overall, this is a process of collaborative construction and expanding service coverage.

For Visa, it has built a very mature global settlement network over the years, whether for offline POS machines or online subscription services, these standards are set by Visa, and this part does not need to be disrupted. The emergence of stablecoins allows these products to be used by more people.

Therefore, no one wants to overthrow the Visa system. Users' habits, whether it’s physical cards, virtual cards, or Apple Pay and Google Pay, do not need to change or require relearning; they simply have the option of stablecoins during the settlement process.

Odaily: Compared to other competitors in payment and U card services, what is Dogpay's biggest competitive advantage and moat?

Peter: I believe the biggest advantage is channel capability. All businesses can be viewed as supply chain businesses, and the key lies in which link of the supply chain you are in.

Taking cards as an example, this chain from top to bottom is: card organizations, members of card organizations, and issuing banks; below the issuing banks are card platforms, and below the card platforms are various branded distributors. Over the past two years, we have seen many brand cards gradually disappear, mainly because they used shared BINs, which are located downstream in the industry chain, resulting in weak bargaining power and risk resistance.

Dogpay, on the other hand, is positioned at the issuing bank level, allowing us to issue independent BINs and 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 same logic applies to bank account capabilities: as our capital volume continues to grow and our licensing capabilities improve, we can continuously gain support from more banks. Currently, we have secured banks in Hong Kong, Singapore, the United States, and South Korea, and once our European licenses are approved, we expect to onboard European banks as well. We continuously acquire better licenses to gain higher-quality banking resources, which we then open up to our clients. The position in the supply chain determines how high a company can rise.

This position is not easy to achieve. The cost of licenses is high, and the application process can take a long time; some licenses are also difficult to maintain long-term.

Dogpay's enterprise KYB, source: official website

The second advantage is that we understand our clients' real needs better. Most of Dogpay's clients are not the Web3 companies that outsiders think, but traditional enterprises, including those engaged in foreign trade, service and application exports, and overseas marketing companies. The business processes and product needs of these clients are quite complex, and through long-term service, we have developed a standardized solution.

In contrast, the needs of Web3 companies are usually more singular, either focusing on fundraising or card issuance, such as branded cards. The different client groups lead to different depths of understanding, and this depth of understanding will determine a company's product structure and development pace.

Odaily: You just mentioned licenses; can you elaborate on 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 (TCSP is a trust license) in Hong Kong, as well as a lending license; we hold an MSB license in the United States and Canada; European licenses are still under application, and we plan to apply for an MPI license in Singapore this year.

Odaily: Are these license applications difficult? People say they are highly valuable; where are the main thresholds?

Peter: The difficulty lies in the fact that licensed institutions must cherish their reputation, and the regulatory requirements for applicants are correspondingly higher. During the application phase, regulators conduct stricter reviews of the company's past operating history, including all clients served.

Once a license is obtained and enters the regulatory system, the requirements do not relax. You need to meet higher anti-money laundering standards and regulatory requirements, and every service to each client must strictly adhere to these standards.

Therefore, licensed companies often operate at a relatively slower pace. But there are benefits to this slowness: every business can withstand scrutiny, and the foundation of the company is thus more solid.

Odaily: Are there any data you can disclose, such as the number of clients or revenue figures, or even ranges?

Peter: We currently process a capital scale of about 500 million USD each month. In terms of enterprise clients, we recently surpassed 1,000, and now have over 1,000 enterprise clients.

Odaily: Do you provide different solutions for different regions and types of clients (high-frequency, low-frequency, large amounts, small amounts)?

Peter: We have many products: card issuance, bank account capabilities, OTC, and cards directly for enterprise use, etc. We call this "flexible combinations."

Clients can choose to use just one service, such as opening an account, only doing collections, or only making remittances; or they can freely combine services according to their business needs, such as layering collection, card issuance, or card usage on top of an account. You can think of us as providing a complete infrastructure for capital transactions for enterprises.

Recently, we have also added AI router capabilities. We found that enterprises, in addition to receiving and making payments, have a large amount of spending that needs to be managed, and the cost of using AI is one of them. Our judgment is that starting this year, not many companies will emphasize "I have integrated AI," just as today no company will specifically emphasize "I am connected to the internet"; AI has become a basic infrastructure. Therefore, we launched the router product, which unifies routing for mainstream large models and provides centralized access for clients.

In usage, clients can create enterprise accounts on the platform and then allocate limits to different employees. Each employee's usage is controllable, and enterprises can manage all expenditures through a unified backend account, making everything clear at a glance.

The logic of this product is actually very similar to our enterprise cards. After opening an account with us, enterprises 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 limit to each employee, allowing them to spend with a card, and it can be pre-set for which products the card can be used and which it cannot. This way, enterprises no longer have to go through complex approval processes.

In summary, we integrate the collection and expenditure processes of enterprises into a complete infrastructure.

Odaily: Which cross-border payment scenarios do you think are most suitable for stablecoins? And which are less suitable?

Peter: There are several reasons for this, and I will elaborate a bit.

When stablecoins were first issued, their scale was small, and liquidity was limited, so they could only solve very limited problems, mainly concentrated in DeFi and trading fields. However, after the GENIUS Act and the upcoming new legislation, the scale of stablecoins will continue to grow. As the scale increases, spillover effects will occur: previously, due to insufficient liquidity, they could only remain in the crypto circle; once the issuance volume increases, they can cover multiple scenarios, including trade, game 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, due to insufficient issuance volume, only a small portion of clients realized this; as time goes on, it will become a very popular currency.

Another benefit is that we are currently researching agent payments. Stablecoins are a type of programmable currency in the world. Agent payments involve many aspects, such as pay-per-use billing, including micro-billing, and I believe we will soon see such products, which are new business models.

In the past, business models had to rely on cards for payments, so some relied on subscriptions, while others were e-commerce payments in fiat currency. With the emergence of agent payments, the current discussion revolves around the x402 protocol, and some companies are trying the logic of MPP (machine payments platform). Once this infrastructure appears, new business models will emerge in the future, such as micro-billing by usage, where agents can also generate income rather than just consuming large models and incurring expenses. In the future, agents can also make money for people.

We are looking forward to seeing these new business models, which is also why we have integrated the relevant capabilities in advance and built the infrastructure. When these new types of clients arrive in the future, they can directly call upon us to explore with one click.

Odaily: In the entrepreneurial process, especially in the process of building Dogpay, do you have any interesting or particularly challenging stories?

Peter: If I were to mention difficulties, it would be that we are moving relatively slowly. The entire team insists on building this company according to compliance logic, so the overall pace is slower, and we have not done much PR externally.

However, looking back, the most challenging times were actually not that bad. Precisely because we were slow, our growth has been relatively steady, and we have not encountered particularly large obstacles, which is the truth.

During this "slow" period, we also saw many fintech companies that were issuing cards at the same time gradually run into problems: some have already gone bankrupt, some encountered security incidents, and some collapsed due to business violations and fund recalls. Providing financial services essentially sells trust. Our clients also prefer us to be stable: you can be a bit slower, and the price can be a bit higher, but you must provide sufficiently stable services.

In terms of pricing, we indeed do not have an advantage, but we have never engaged in price wars. We are clear that many low prices in the market are backed by companies using subsidies to acquire customers. We do not believe that the financial services industry is suitable for the internet model of acquiring customers through subsidies, as such subsidies are inherently unsustainable.

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