How to Build a Compliant, Convenient Payment System Connecting Web2 and Web3 While Ensuring Privacy and User Experience?

Author: PolyFlow

• Date: May 29, 2025

• Full Replay: https://x.com/i/spaces/1vOxwXNNjqdKB/peek

• Guest Participants: Joshua (ZKPass), Ilya (Sumsub), Shawn (Rozo Labs), Chuck (PolyFlow)

• Host: Olivia (PolyFlow)

In this episode of the PolyFlow PayFi Spotlight AMA, several experts from the fields of identity verification, payment infrastructure, and privacy technology discussed one of the most pressing issues in Web3: how to build a compliant, convenient payment system that connects Web2 and Web3 while ensuring privacy and user experience.

Host Olivia opened the dialogue in New York, engaging in a deep discussion around reusable identity systems, zero-knowledge proofs, decentralized payment IDs, and the increasingly stringent compliance environment in the crypto industry.

Why PayFi?

Olivia emphasized the mission of PayFi: to seamlessly integrate payments, compliance, and privacy identity into the mainstream of Web3.

The four guests shared their perspectives:

• Joshua (ZKPass) positioned the company as a "private data oracle," helping users migrate Web2 account data verification to the blockchain without disclosing privacy.

• Ilya (Sumsub) introduced their latest reusable identity credential tool, allowing users to reuse KYC results across applications.

• Shawn (Rozo Labs) shared their development of a privacy-focused, offline-capable Web3 eCash system.

• Chuck (PolyFlow) showcased PolyFlow's newly launched Payment ID (PID), which enables an efficient and compliant identity verification process through PID.

The Rise of Reusable Identity

KYC has long been a pain point for users and platforms, with frequent document uploads and repeated verifications hindering the experience. Sumsub's Sumsub ID allows users to store verified identity credentials and reuse them across multiple platforms, significantly lowering entry barriers and process friction.

Ilya stated, "We not only need to optimize KYC but also make it reusable under legal validity."
Additionally, this credential can be used for on-chain issuance of proofs, facilitating integration into dApps, wallets, or DeFi protocols, enhancing compliance flexibility.

ZKPass: Verifiable Privacy Data on the Blockchain

ZKPass demonstrated its solution using the Zero-Knowledge Transport Layer Security protocol (ZK-TLS), allowing users to prove certain information (such as credit scores or deposit balances) without disclosing specific data, without needing to open APIs or sign data-sharing agreements.

Joshua provided an example: "Users can prove they have a $10,000 deposit or a 700+ credit score without revealing account details."

This opens up new scenarios for DeFi and PayFi, such as credit loans and nationality verification, while safeguarding user privacy.

PolyFlow PID: Your Web3 Identity Wallet

Chuck introduced PolyFlow's Payment ID (PID), which integrates identity credentials, transaction records, and reputation data into a single container, essentially serving as a "Web3 identity wallet."

PID seamlessly integrates with Sumsub's real-name verification and ZKPass's privacy proofs, allowing users to take control of their identity data while enhancing trust with counterparties.

Moreover, PID includes a data monetization mechanism, enabling users to choose to share some data anonymously in exchange for rewards. Chuck stated, "If merchants or advertisers run ads based on your PID data, you can also earn a share of the revenue."

Rozo Labs: The Value of Web3 Native eCash

Rozo Labs launched a Web3 eCash system characterized by privacy protection, instant transactions, and offline usability.

Shawn pointed out that while on-chain transparency is an advantage, it also poses privacy risks. He cited, "Now, anyone can track all on-chain transactions of Vitalik.eth, which is a privacy crisis."

Rozo Labs' eCash will support offline payments, providing an experience similar to NFC card payments, simplifying the entry threshold.

Compliance: Centralized Pressure, Decentralized Future?

During the compliance discussion segment, the guests had differing views.

Ilya candidly remarked, "The current regulatory framework essentially outsources compliance responsibility to platforms, and this will not change in the short term."

Shawn envisioned a future where users complete a one-time KYC through government-backed ZK credentials and then autonomously authorize data access. While other guests agreed with this vision, they believed it might first appear in emerging or regulatory-friendly markets.

Chuck pointed out that mainstream markets like the U.S. are tightening compliance for stablecoins, while regions with high crypto adoption, such as Latin America and Africa, may be the first to experiment with new compliance models.

Conclusion

This AMA highlighted three core trends:

• The identity system is the cornerstone of PayFi and is rapidly evolving through ZKP, reusable IDs, and decentralized data sovereignty.

• Privacy and compliance can coexist, but better tools and collaborative mechanisms are needed.

• Large-scale adoption depends on user experience; smooth account opening, intuitive wallets, and seamless payments are key to growth.

PolyFlow's PID is gradually becoming a central hub in this system, serving as both an identity credential container and a compliance interaction gateway within a decentralized payment network.

Want to experience PayFi scenarios firsthand?

Feel free to try out PolyFlow's Scan-to-Earn event and follow @PolyFlow_PayFi for the latest updates. Let's build a Web3 payment world where every transaction is worthwhile!

About PolyFlow

PolyFlow is the first modular PayFi infrastructure dedicated to connecting real-world assets (RWA) with decentralized finance (DeFi). As the foundational layer of the PayFi network infrastructure, PolyFlow integrates traditional payments, crypto payments, and DeFi, decentralizing real payment scenarios. PolyFlow provides the necessary infrastructure to create PayFi scenarios, ensuring compliance, security, and seamless integration of real-world assets, helping to build a new generation of financial paradigms and industry standards.

Learn more: X|Telegram|Medium| DAPP| Official Website

Media Contact: media@polyflow.tech

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