The Day On‑Chain Payments Surpass Visa: From Hybrid Models to 100% On‑Chain

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The Day On‑Chain Payments Surpass Visa: From Hybrid Models to 100% On‑Chain

※ This article is being published in its current version first and will be updated to the final Daily Crypto Times (DCT) format in two days.

The global on‑chain payment infrastructure is expanding at a rapid pace.
Recent data shows that while Visa processes an average of around 1,700 TPS,
the on‑chain payment stack (L1, L2, and modular chains combined) is already handling several thousand TPS in real time.
This means it is operating at a level that exceeds traditional payment networks by 3–4x in a permissionless environment.

This figure is not just a sign of technical superiority;
it signals the beginning of an era where on‑chain transactions surpass traditional payment networks.

However, this transformation does not happen overnight.
The migration of traditional finance onto on‑chain rails is a gradual, multi‑stage process,
and the first stage is the hybrid model where authorization remains on legacy rails while settlement moves on‑chain.
Once this hybrid model becomes established,
the entry of big tech players like Meta will accelerate the shift toward a fully 100% on‑chain payment era.

💡 Note: For deeper context on the on‑chain settlement architecture and the strategies of Stripe and Visa,
you may find it helpful to read the previous article,
“Cards Stay the Same, Money Moves on the Blockchain: The Future of Onchain Settlement Chosen by Stripe and Visa” .

Below, we break down this transition into three stages.

1) How Traditional VISA Transactions Differ from On‑Chain Transactions + VISA’s Separation of Authorization and Settlement

Traditional Visa payments operate on a structure where authorization and settlement are clearly separated.

When a user taps their card, authorization is processed instantly.
However, no actual movement of funds occurs at this stage.
It is merely a promise between networks that “this transaction will be settled later.”

In contrast, settlement is not real‑time.
Interbank balance adjustments are processed in daily batches and typically complete on a T+1 to T+2 basis.
If errors occur, these can be rolled back.

So while the experience feels real‑time to the user,
inside Visa, authorization and settlement are structurally and operationally separated.

On the other hand, on‑chain transactions bundle authorization, settlement, state updates, and even smart contract execution
into a single flow that happens simultaneously.
Final settlement is irreversible by default, and the cost of verification is significantly higher.

It is precisely because of this structural difference that Visa can naturally adopt a hybrid model where only the settlement layer moves to the blockchain.

2) VISA’s Hybrid Model: Authorization on Legacy Rails, Settlement on the Blockchain

Visa’s on‑chain strategy is very similar to that of Stripe,
but because they serve different core markets, their approaches appear different on the surface.

The essence can be summarized in a single sentence:

“Keep the card payment UX as it is, and move only the flow of money to Web3.”

① Authorization Stays on the Existing VisaNet

  • Users pay by tapping or swiping their cards, just as they do today.
  • POS terminals, merchant infrastructure, and the overall UX remain unchanged.
  • Authorization signals are processed instantly over the existing VisaNet.
  • No actual movement of funds occurs at this stage.

② Only Settlement Moves On‑Chain

  • Settlement is routed via a Visa → bridge → on‑chain (L1 or L2) path.
  • Funds are settled using stablecoin‑based rails.
  • Settlement times shrink from the traditional 1–3 days to seconds to a few minutes.
  • Transparency, auditability, and automation are significantly improved.

③ Strategic Common Ground Between Stripe and Visa

  • Stripe: On‑chain settlement for internet payments
  • Visa: On‑chain settlement for the card network

They start from different markets, but their goal is the same.

“Move the flow of money onto Web3.”

This hybrid model represents the first stage in which on‑chain transactions begin to surpass Visa.

3) Why Meta Could Be the First to Run 100% On‑Chain Transactions

While Stripe and Visa are pursuing a strategy of on‑chain settlement only,
Meta has the potential to operate on a completely different level.

Meta could build an architecture where both authorization and settlement are processed fully on‑chain.

① Ability to Build Its Own L2 or High‑Performance Rollup

  • Meta is already investing in research around ZK and L2 technologies.
  • It could design an architecture capable of scaling to tens or even hundreds of millions of TPS.
  • Combined with a robust data availability (DA) layer, it could support truly global throughput.

② Native Wallet Integration into WhatsApp, Instagram, and Facebook

  • Onboarding costs would be effectively close to zero.
  • Billions of users could start using on‑chain payments instantly.
  • The entire flow from authorization to settlement could be orchestrated as a fully automated on‑chain process.

③ Authorization + Settlement = 100% On‑Chain

  • Authorization would be processed instantly on a Meta‑operated L2.
  • Settlement would be finalized either on the same L2 or on an L1 as final settlement.
  • All payment logic could be executed automatically via smart contracts.

④ Why Meta Is Structurally More Suited to Full On‑Chain Than VISA

  • It is not constrained by legacy financial infrastructure and can redesign UX from scratch.
  • It already owns global‑scale social and messaging networks.
  • It has effectively solved the hardest problem in on‑chain payments: user acquisition.

Once Meta fully enters this space, on‑chain payments will not just “overtake” Visa;
they will likely redefine what a payment network is.

Conclusion: The Era of On‑Chain Payments Surpassing Visa

The on‑chain payment stack has already reached a level where it surpasses traditional payment networks in throughput.
But the real shift is not just in the numbers; it begins with a fundamental transformation of payment infrastructure.

  • Stage 1: Hybrid models from Visa and Stripe – UX stays the same, only settlement moves on‑chain.
  • Stage 2: 100% on‑chain payments led by big tech – both authorization and settlement on‑chain.
  • Stage 3: On‑chain transactions fully replace traditional payment networks – a complete redefinition of global payment infrastructure.

We are standing at the very beginning of this transition.
And the fact that the on‑chain payment stack can already process thousands of TPS
quietly proves that this future has, in many ways, already begun.

Younchan Jung
Researcher exploring structural shifts in AI, blockchain, and the on‑chain economy.

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