When Stripe launched the Tempo blockchain, its main objective was to bring significant everyday payments volume to stablecoins—a goal it is now one step closer to achieving following a deal with DoorDash.

For a blockchain that only brought its mainnet online last month, DoorDash’s participation is a signal of early traction. Tempo has also established partnerships with companies like Shopify, OpenAI, Visa, and Mastercard, all of which have the potential to introduce stablecoins to end consumers at meaningful scale.

“This is how stablecoins go mainstream. Not through retail payments but through payouts and treasury flows,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “This is less about crypto and more about fixing pain points like faster access to earnings, lower fees, and 24/7 settlement.”

A Global Challenge

These issues are part of why the gig and creator economies have become attractive to financial services firms. Over a quarter of the U.S. workforce participates in the gig economy in some capacity, yet many workers still report delayed, inconsistent, or incomplete payouts.

This is a global challenge, and one reason Visa launched a debit card for UK TikTok creators designed to help users receive virtual gifts that can be converted into income.

Second-Order Effects

Stablecoins may be better suited to many payout use cases, as they enable near real-time settlement that is secure and low-cost. Even more importantly, they avoid many of the frictions associated with cross-border payments, such as delays, transfer fees, and currency conversion costs.

These advantages have fueled demand for stablecoin-based payouts in gig economies. For example, in the Philippines, many freelancers work with foreign clients, and cross-border payment complexity often results in settlement delays of several days and processing fees as high as 10%.

While stablecoins offer a compelling solution to these challenges, gig economy payouts may ultimately represent just the tip of the iceberg.

“Thinking in second-order effects, once platforms normalize paying workers in stablecoins, I don’t think it automatically means those stablecoin balances are going back to banks in all cases,” Hugentobler said. “Instead, they get used for remittances, bill pay, or even embedded financial services. To be clear, I don’t think this will replace banks, but if more companies continue to leverage stablecoins like this, it will shift where and how money moves.”

The post DoorDash to Offer Gig Workers Stablecoin Payouts appeared first on PaymentsJournal.

Visa and TikTok are launching a new “creator card” aimed at fixing one of the biggest pain points in the creator economy: getting paid on time.

The debit card, initially rolling out in the UK, will allow creators to convert TikTok Live gifts into income and access funds more seamlessly through a dedicated business account.

“The partnership is all about getting creators their funds faster, which for a small business is critical to cash flow and money management,” said Ben Danner, Senior Debit Analyst at Javelin Strategy & Research. “The other upside is to keep business expenses separate from personal expenses, which are often intermingled as creators utilize their personal bank accounts for their TikTok businesses.” 

“Visa has increasingly leaned into supporting the growing creator economy in the past few years by providing solutions like Visa Direct and card solutions,” he said.

Prompted By the Phenomenon

The rapid rise of the creator economy phenomenon has pushed leading financial services players to strengthen the payments infrastructure supporting it. For example, PayPal recently launched a feature for Canva’s roughly 265 million users that enables them to design content and accept payments in one place.

Previously, many Canva users had to build separate websites or storefronts to process transactions—often at a significant cost. These payment challenges are widespread. In a study commissioned by Visa, nearly half of surveyed UK content creators said late or inconsistent payments negatively impacted their ability to run their business.

An Appealing Combination

While more financial services firms are working to solve these issues, TikTok is also expanding its financial footprint. In China, its sister platform has launched the Douyin Pay digital wallet to facilitate in-app transactions. TikTok has also applied for licenses in Brazil that would allow it to hold user funds and potentially offering lending services.

Through these efforts, TikTok is positioning itself at the intersection of social media, e-commerce, and fintech. This convergence is particularly compelling younger adults, an increasing number of whom are building businesses within the creator economy.

The post Visa and TikTok Unveil Debit Card for Social Commerce Payouts appeared first on PaymentsJournal.

As more AI agents take on the mantle of personal shopper, there is growing evidence they may soon assume another role: financial advisor.

Data from Plaid found that over half of Americans used AI to manage their finances in the past year, and a similar percentage believe managing money without AI’s assistance will soon feel obsolete.

Even more intriguing, the study found that AI is forming relationships with younger consumers. Roughly half of Gen Z and millennial respondents said that they feel more comfortable discussing their finances with AI than with a human.

What’s more, a higher percentage of younger adults said they would trust an AI agent to autonomously execute trades on their behalf, compared to 44% of consumers overall.

Despite this growing confidence, consumers emphasized the need for guardrails. Roughly three-quarters of respondents said it is important to know when AI is being used in financial decisions, and most expect organizations to reimburse customers in the event of an AI-driven error.

Guidance Amid Confusion

While this data underscores the importance of implementing AI thoughtfully, it also highlights several broader trends in financial services. Notably, customers are seeking both customization and—especially among younger consumers—personalized guidance.

It may seem counterintuitive that, amid an abundance of information sources—AI models, traditional search engines, and social media—customers are still searching for direction. Yet this overload of information often creates more confusion than clarity.

These lines are becoming more blurred as social media platforms expand into e-commerce, payments, and even banking. For example, TikTok recently applied for licenses in Brazil that would allow it to offer prepaid accounts, enabling users to hold balances, send and receive payments within the app, and potentially even access lending services.

The Digital Banking Frontier

Alongside this convergence with social media, fintech platforms have stepped in to fill widening gaps left by traditional banks as the industry shifts toward a digital-first model.

These fintech players have gained traction by delivering exactly what consumers are seeking: streamlined, digital-first user experiences powered by AI-driven personalization. One reason fintech chatbots often outperform their traditional banking counterparts is they leverage AI to provide far greater conversational and assistance capabilities. By contrast, concerns around misinformation and liability have led many bank chatbots to avoid answering questions about core services such as lending.

“What we’re finding is there’s this dichotomy of fintechs that are building virtual assistants that can address lending, and then banks that are supposed to be full-service but have digital chatbots and virtual assistants that essentially ignore lending completely,” Dylan Lerner, Senior Digital Banking Analyst at Javelin Strategy & Research told PaymentsJournal.

“If you want to engage lending in this way, you have to have a chatbot or virtual assistant that is capable of handling this kind of sensitive topic,” he said. “Not only do you have to address questions about lending, but there’s so much opportunity if you do.”

An Investment in Trust

Each time consumers turn to fintechs—or other third-party sources—for financial guidance, banks risk losing opportunities to build lasting relationships. While open banking model has expanded access and innovation, it has also made it more difficult for banks and credit unions to differentiate themselves.

“As open banking has made financial services more modular for the retail consumer—the ability to have accounts that you pay out of, accounts that you save into, accounts that you pay friends out of, accounts that you pay bills out of, maybe accounts that you shop with—having all of that and that ability to immediately access that through open-banking standards means that the core DDA, that core relationship you have with your primary financial institution, is under threat,” James Wester, Co-Head of Payments at Javelin Strategy & Research, told PaymentsJournal.

Still, many customers would still prefer to rely on their primary financial institution for guidance—if it meets their expectations. This creates a clear imperative. Institutions must evolve their strategies to mirror what has worked for fintechs, including delivering personalized digital experiences that resonate with younger audiences.

Building these relationships requires a long-term investment in trust. Amid rising concerns about fraud and data breaches, users demand transparency—not just in how AI is used to manage their finances, but also in how their data is protected. As banks, fintechs, merchants, and other organizations become interconnected, concerns about privacy will only intensify.

These security concerns, coupled with the ongoing demand for guidance, spotlight a central truth—even as technology grows more powerful, it has yet to replace the human element.

The post Consumers Are Putting More Financial Decisions in AI’s Hands appeared first on PaymentsJournal.

Payment services firm EBANX, a key partner in the development of Brazil’s highly successful Pix instant payment system, is expanding into several new markets in Southeast Asia, strengthening its footprint beyond Latin America. The fintech is launching operations in Thailand, Indonesia, and Turkey, with plans to enter Malaysia and Vietnam later this year.

The company aims to bring cross-border solutions to these markets by connecting global merchants with local payment methods. The expansion underscores EBANX’s strategy of growing in emerging markets where credit card penetration remains low.

APAC Growth Strategy

EBANX facilitates hundreds of local payment methods and streamlines cross-border transactions for businesses operating in emerging markets. The Asia-Pacific region has been a central pillar of its growth strategy, driven by rising digital payment adoption and strong demand for localized checkout solutions.

To support this expansion, the company recently opened a regional headquarters in Singapore, strengthening the ability to serve merchants across APAC and deepened relationships with local payment ecosystems.  

Last year, 36% of EBANX’s total payment volume (TPV) came from the Asia-Pacific region. Its QR PH solution is now the fastest-growing payment method in the Philippines, and the company expects TPV in Asia to grow by 30% this year.

Overall, EBANX recorded a 48% increase in TPV in 2025, serving more than 500 merchants worldwide. That same year, 65% of its gross profit was generated outside Brazil, including 20% from markets beyond Latin America.

Landscapes for Further Development

EBANX has also contributed to the development of instant payment ecosystem in additional markets. In Colombia, it helped develop the Bre-B system, modeled closely on Pix. More than 30 million users—over three-quarters of the country’s adult population—have already registered.

With only 18% of Colombians holding credit cards, the market is well-suited for alternative payment systems. Credit card usage is even lower in Indonesia, where only 6% to 7% of adults have one.

Indonesia launched its national QR payment system, Quick Response Code Indonesian Standard (QRIS), in 2019, while Turkey has adopted digital payments through its FAST instant payment system, which processes around 3.5 million transactions daily. These types of payment environments EBANX targets for its cross-border services.

The post EBANX Targets Southeast Asia in New Cross-Border Payments Push appeared first on PaymentsJournal.

WEBINAR

The Payments Paradox: Racing Toward Real-Time While Running on Manual

April 28, 2026

1:00 pm EDT

[contact-form-7]

Can your operations keep up with the speed of modern payments?

Payments aren’t just changing, they’re accelerating in every direction. Transaction volumes are surging, new payment rails are gaining traction, and AI is rapidly becoming part of the core infrastructure. But behind that momentum, many organizations are feeling the pressure: manual workflows, disconnected data, complex integrations, and increasing regulatory demands are making it harder to keep up.

On April 28, join Nick Botha, Vice President of Payments and Retail Banking at Autorek and James Wester, Co-Head of Payments at Javelin Strategy & Research, for an in-depth discussion about what’s really fueling this transformation, where the biggest operational challenges are hiding, and how these dynamics will shape the future of payments in 2026 and beyond.

In this webinar, you will gain insights into:

• Why operational capabilities are struggling to keep pace with payment growth
• How fragmented data is creating hidden risks across the ecosystem
• Where AI is delivering value today—and where gaps in maturity still remain

Our Presenters

Nick Botha

Vice President of Payments

James Wester

Co-Head of Payments

The post The Payments Paradox: Racing Toward Real-Time While Running on Manual appeared first on PaymentsJournal.

Imagine a global supply chain where payments no longer require manual initiation, intervention, or tedious reconciliation. In this autonomous ecosystem, an AI agent monitors inventory levels, triggers procurement, and negotiates supplier terms—all while dynamically selecting optimal FX rates and executing global payments in real time, ensuring every transaction is cost‑efficient, precisely timed, and inherently compliant with evolving global regulations.

This is the promise of agentic payments—a revolutionary paradigm that is re‑architecting the fundamental mechanics of global value movement. We are witnessing a decisive shift from “instruction‑based finance,” where human operators must manually authorize every tactical step, to “intent‑centric finance.” In this new era, humans define the strategic objectives, while AI agents autonomously determine and execute the complex financial routing, compliance checks, and fulfillment required to achieve them.

By any measure, the scale of this transformation is substantial. Bain estimates that the U.S. agentic commerce market could reach 300 to 500 billion dollars by 2030, representing roughly 15% to 25% of domestic e‑commerce volume. McKinsey & Company projects that, globally, agentic commerce could reach $3 to $5 trillion by 2030.

The Global Landscape: Giants Paving the Way

As we move into 2026, this paradigm shift is becoming an imminent reality. The acceleration towards agentic payments is fueled by the increasing complexity of global commerce, the demand for real-time transaction control, and evolving regulatory landscapes. In response, industry leaders are actively upgrading their infrastructure.

At the foundation of this shift are the global payment networks. Visa and Mastercard are evolving beyond traditional transaction processing to become the trust layers for machine-initiated payments. Initiatives such as Visa’s Intelligent Commerce and Trusted Agent Protocol, alongside Mastercard’s Agent Pay framework, signal a strategic pivot: enabling AI agents to transact securely across global merchant ecosystems. Their focus lies in building scalable networks that can support autonomous transactions, while maintaining strict requirements for security and compliance.

Meanwhile, fintech and payment service providers are pioneering the necessary protocols. Stripe, in collaboration with OpenAI, is advancing the concept of an Agentic Commerce Protocol (ACP)—a framework designed to address foundational challenges such as trust, settlement, and interoperability for AI-driven transactions. By enabling AI agents to securely initiate and manage payments through programmable interfaces, these efforts are laying the groundwork for machine-to-machine (M2M) commerce at scale.

Parallel to these efforts, Coinbase is building the native digital layer of the agentic economy. Launching agentic wallets and the x402 protocol, Coinbase aims to provide native wallet and payment capabilities for AI agents. This move bridges the gap between decentralized finance and autonomous agents, ensuring that AI can seamlessly interact with digital assets and execute smart contracts, further expanding the frontier of machine-driven commerce.

PhotonPay’s Strategic Leap into Agentic Payments

For most businesses, to realize the full potential of agentic commerce, they require more than just a gateway. They need a financial infrastructure that is globally connected, API-driven, and inherently secure. This is where PhotonPay positions itself as a builder of this new infrastructure.

PhotonPay’s vision is built upon a deliberate evolution of AI integration. Its journey began with AI customer service toenhance user interaction, advanced to AI risk control for sophisticated fraud prevention, and scaled with AI coding to optimize internal workflows. Today, PhotonPay is making the decisive leap to agentic payments, upgrading its core infrastructure to serve as the “Global Payment Infrastructure” for the autonomous era.

PhotonPay has re-engineered its capabilities into three distinct layers to support the needs of AI agents:

1. The Global Network Layer: PhotonPay’s infrastructure spans over 200 countries and regions, underpinned by deep integration into local clearing networks and partnerships with leading global card networks and top-tier financial institutions. This foundation empowers transactions in local currencies and reduces reliance on intermediary banks, which provides AI agents with a cost-efficient, high-velocity way to orchestrate global capital flows.

• The Core Execution Layer: This layer acts as the “hands” of the agent. It features autonomous routing optimization, which dynamically chooses the fastest and cheapest path for the payment, and real-time compliance decision-making. By embedding AML and KYC checks directly into the execution flow, PhotonPay allows agents to transact with both speed and security.

• The Smart Decision Layer: PhotonPay is continuously optimizing its architecture, facilitating the autonomous conversion of business intent into financial action. This layer will interpret high-level objectives and translate them into a series of executed trades and payments, operating within strict, human-defined authorization fences.

As agentic payments mature, their impact on global operations will be profound. This transformation will be particularly evident across scenarios like digital services, where machines pay machines for API access and data processing; subscription economy, where AI agents manage the lifecycle of software, content, and SaaS renewals; as well as corporate spend management, where agents autonomously audit and execute internal expenses, from travel bookings to hardware procurement, according to company policy.

The future of finance is no longer about human-to-human transactions facilitated by machines. It is about machines transacting on behalf of humans to create a more efficient, liquid, and accessible global market.

As AI transitions from assisting decisions to executing them, financial infrastructure must evolve accordingly. Platforms like PhotonPay are bridging the gap between intelligence and execution, building the programmable framework that will power the next century of global commerce. In the era of autonomous commerce, the goal is simple: to make the flow of value as seamless and intelligent as the flow of information itself.

The post Beyond the Click: How Agentic Payments Are Redefining Global Financial Flow appeared first on PaymentsJournal.

PayPal is making a push into the creator economy with the launch of PayPal Links, a new feature that integrates with Canva and allows users to design content and accept payments in one place.

The move targets a persistent friction point for creators: getting paid. Many still spend significant time and money building standalone websites or storefronts just to process transactions.

By embedding payments into Canva’s design tools, PayPal is aiming to remove that barrier. The integration will give Canva’s 265 million monthly global users the ability to create, share, and monetize content without leaving the platform.

“This is a home run for PayPal,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “What they’ve done with Canva is a great example of the power of embedded payments and shines a bright light on the path to growth that all successful payments companies are following.”

The Growth Opportunity

This growth opportunity has attracted many leading payments firms to build infrastructure for the gig and creator economies. For example, PayPal recently introduced functionality allowing YouTube creators to receive payouts in its PYUSD stablecoin, which marked both a milestone for digital assets and a win for the company.

These partnerships also reflect a broader trend—the convergence of e-commerce and social media into social commerce. TikTok Shop has emerged as a pioneer in this space, largely due to its ability to integrate influencer demos and product videos with payments, creating an end-to-end user experience.

Ditching the Website

This convergence shows no sign of slowing. According to Statista, global social commerce sales are projected to surpass $1 trillion by 2028. This surging market makes it increasingly imperative for creators to embed payments into their content.

While e-commerce may be the primary focus of PayPal’s’ Canva integration, the company notes that PayPal Links also enables creators to bypass the need for a standalone website altogether. Creators can embed payment links, QR codes, and PayPal checkout functionality directly into their Canva designs, allowing them to accept payments via social media, email, or even in person.

This optionality—along with increased support for payment types—should be a welcome addition for creators who often struggle to meet consumers’ high expectations around payments.

The post PayPal Gives Canva Creators a Unified Solution for Payments appeared first on PaymentsJournal.

The real-time payments system FedNow has rapidly gained from over 1,600 financial institutions across the United States. However, these participants have so far been restricted to using only Reserve Banks as intermediaries.

This limitation has prevented banks and credit unions from leveraging the network for cross-border payments. The U.S. Federal Reserve, which operates FedNow, is now considering lifting this restriction. This change would align FedNow more closely with the Fedwire model, which has been in place for decades.

Under the proposed plan, a U.S. institution could use FedNow to send funds to a correspondent bank, which would then facilitate the international leg of the transaction. This functionality could broaden the use cases for a system that has already experienced substantial growth in both transaction volume and value over the two years since its inception.

“A move to cross-border via FedNow is the logical next step in the evolution of real-time payments in the U.S.,” said Hugh Thomas, Lead Commercial and Enterprise Analyst at Javelin Strategy & Research. “By moving to real-time, you’re synching up with the speed of domestic funds movements in big cross-border markets like the EU and the UK. With ISO 20022 standards in the mix in all three markets, you open up a lot of possibilities for cross-border payments solutions. This isn’t to say they’ve gotten there with this move, but it’s certainly a step in that direction.”

Stopped at the Border

While using FedNow for cross-border payments could streamline the domestic payments experience, the network’s real-time settlement would not extend beyond U.S. borders. Once the funds reach an overseas correspondent bank, the transaction would follow the same processes as conventional cross-border payments.

The complex correspondent banking system is likely to continue subjecting these payments to transaction fees, currency conversions, settlement delays, and limited transparency—challenges that have long plagued cross-border payments.

These issues have persisted despite ongoing efforts by industry stakeholders and world leaders. For example, leaders from the Group of 20 countries established a roadmap to improve international transactions. Yet, a recent review highlighted that legacy payments infrastructure and cross-country coordination challenges have hindered meaningful progress.

Weighing the Challenges

Such hurdles are why many experts advocate for sweeping changes to the cross-border payments landscape, potentially involving a shift toward new rails like stablecoins or global networks operated by Visa and Mastercard.

The SWIFT messaging system has also played a key role in modernizing the correspondent banking model, and it is working on a framework specifically for retail cross-border payments.

While expanding FedNow’s cross-border capabilities would likely be welcomed by many institutions, the service would still operate within an increasingly fragmented and complex global market. These are key considerations the Federal Reserve will likely weigh as it reviews public comments and decides whether to move forward with the proposal.

The post U.S. Federal Reserve Considers Taking FedNow Global appeared first on PaymentsJournal.

The U.S. dollar dominates global finance, but that dominance may face a credible challenge sooner than expected.

Harvard economist Kenneth Rogoff recently suggested that the Chinese yuan could become a global reserve currency within five years, potentially rivaling even the fast-growing digital assets industry.

That said, the dollar’s position remains deeply entrenched. According to data from the U.S. Reserve, it accounts for 58% of international transactions and has long been regarded as a safe haven currency. Beyond cross-border payments, it also maintains a strong hold over the rapidly expanding stablecoin market. Many of the world’s leading payments networks are U.S.-centric, including the global systems operated by Visa and Mastercard.

This dollar-heavy global financial ecosystem has proven difficult to displace, reinforcing the currency’s central role in global commerce—even as geopolitical tensions and trade conflicts have intensified.

China, however, has been working to change that. It has long sought to expand the role of the yuan in global payments. Although these efforts have yet to gain much traction—the Fed estimates the yuan is used in only around 2% of cross-border payments—there are signs that its role could grow.

Bucking Western Estimates

According to the South China Post, one reason Western estimates of yuan usage may be understated is that they don’t fully account for transactions conducted through China’s Cross-Border Interbank Payments System (CIPS). Developed as an alternative to the U.S.-backed SWIFT—a cornerstone of global payments—CIPS has become a crucial part of China’s strategy.

China has prioritized expanding CIPS, even easing some regulations to introduce new programs with countries such as Vietnam and Indonesia. These cross-border integrations enable QR code transfers, allowing domestic merchants to accept payments from Chinese travelers.

Cementing the Currency’s Standing

Separately, China has also focused on its central bank digital currency—the digital yuan—which has gained more ground than many other CBDCs globally.

Still, the yuan is far from challenging the U.S. dollar. Rogoff acknowledged this and laid out steps China could take to further cement the currency’s global standing, including opening its government bond markets to foreign investors and continuing to expand CIPS as a viable alternative to SWIFT.

In many ways, China’s payments strategy mirrors that of the European Union, which has also reprioritized its CBDC efforts and sought to bolster the euro’s role in cross-border payments. However, while strong government backing may drive incremental shifts, it remains to be seen whether these efforts will be enough to overcome the dollar’s entrenched position at the center of the global financial system.

The post Unseen Momentum Could Be Mounting Behind the Yuan appeared first on PaymentsJournal.

Sales on TikTok Shop soared last year, moving the platform beyond its creator-driven roots and attracting interest from big-name brands like Pepsi and Ulta Beauty.

This e-commerce success can be attributed to the enduring popularity of the short-form video platform, but TikTok has continued to push beyond the boundaries of social media. Its parent company, ByteDance, launched Douyin Pay five years ago as an alternative to WeChat Pay and Alipay, the dominant digital payments platforms in China.

While Douyin Pay has gained some traction in China, it has yet to make a dent in the super apps’ commanding market share. However, this hasn’t stopped TikTok from attempting to export this model elsewhere. According to Reuters, TikTok has submitted applications to Brazil’s central bank for two financial services licenses.

The first would allow Tiktok to create prepaid accounts for users, enabling them to hold balances and send and receive payments within the mobile app. The second license would allow the platform to lend capital to customers and connect lenders with borrowers, though it would stop short of permitting TikTok to accept bank deposits from the public.

Not a Blank Slate

As Latin America’s largest economy, Brazil represents a dynamic expansion opportunity for TikTok, but the country is far from a blank slate in payments. The real-time payments system Pix has surpassed credit cards as the most popular payment method in the country, and the central bank-backed platform has continued to expand its financial services capabilities, adding features such as buy now, pay later loans and recurring payments.

Digital-first lender Nubank is also successful in the region, now serving roughly 60% of Brazil’s adult population. Nubank has become the third-largest bank in Brazil by leaning into it digital roots and becoming an early adopter of artificial intelligence. This model has been so successful that the company has since expanded into the highly competitive U.S. banking market.

Alongside its AI-driven approach, Nubank has prioritized relationships with younger customers, as evidenced by its recent launch of a credit card designed to instill financial responsibility in teens. These younger consumers would presumably fall within TikTok’s core demographic, putting the two companies in direct competition on multiple fronts if TikTok is approved to operate in Brazil.

Betting on Entrenchment

Much of TikTok’s strategy will hinge on its deep social media engagement, which could help it gain traction with a highly sought-after young customer base. As Gen Z and millennial users have matured into adulthood, many traditional banks have struggled to connect with consumers who are both digital-first and hungry for relevant financial guidance.

As a result, fintechs have stepped in to fill the gap. Apps like Venmo and Cash App are easy to adopt and use, and while younger adults may initially download them to split a bill, they often discover that these platforms offer far more than peer-to-peer payments. This evolution has created a challenge for traditional financial institutions and an opportunity for platforms like TikTok.

The Dovetailing Trends

Given younger consumers’ deep engagement with both social media and fintech, the convergence of these trends was perhaps inevitable. This overlap has accelerated, as evidenced by YouTuber MrBeast’s recently acquisition of Step, a platform offering spending and saving accounts, as well as tools for investing and financial management. The goal is to become a go-to resource that helps younger users build financial literacy.

In another example of this trend, Meta has indicated that it is working toward launching a stablecoin and digital wallet for its roughly 3 billion users across Instagram, Facebook, and WhatsApp. After years of flirting with a stablecoin launch, Meta appears to be moving forward in part due to the immense social commerce success of TikTop Shop.

TikTok Shop has succeeded largely because of its immersive experience. Influencers’ livestreams and product videos link directly to checkout, allowing users to seamlessly buy the products they view. This user experience has been a key differentiator for its e-commerce segment, and TikTok will likely bring this same immersive approach to its fintech ambitions in Brazil.

This integration of financial services with e-commerce and social media also reflects TikTok’s broader push toward the super app model, which has gained popularity in its native China. However, while Tiktok’s ecosystem could attract new users if the company is approved to operate in Brazil, the growing field of financial services platforms suggests that exporting this model abroad will come with significant challenges.

The post TikTok Aspires to Fintech Status with Payments, Credit Bids in Brazil appeared first on PaymentsJournal.

Embedded finance, embedded commerce, and integrated payments are different names for the same shift: integrating payments and financial services into your platform to deliver more value to customers and unlock recurring revenue streams. As Independent Software Vendors (ISVs) position themselves for success in a crowded and dynamic marketplace, building a comprehensive embedded commerce strategy is key to scaling your distribution channels and maximizing revenue potential.

Regardless of terminology, embedded payments offer added value to customers, strengthen long‑term relationships, and provide a more holistic solution. According to Future Market Insights, the embedded finance sector will grow from USD 85.8 billion in 2026 to USD 370.9 billion by 2036, representing a 15.8% compound annual growth rate (CAGR) as expanding embedded finance use cases accelerate adoption.

From integrated payments to financing solutions, many ISVs need a strategic plan to incorporate the functionality that makes sense for its vertical and customer base. Let’s take a closer look at how implementing the right strategy can differentiate ISVs from the competition.

Growing Your Distribution Footprint with a Vertical Partner Approach

We’ve all heard the expression, “A jack of all trades, master of none.”  That sentiment underscores an important reality for businesses competing in increasingly complex industries. Taking a vertical or vertical-adjacent approach to capturing market share creates a compelling value proposition for businesses looking for solutions that solve specific challenges, industry regulations, and operational inefficiencies.

Healthcare provides a clear example. While EHR vendors have saturated the market with electronic health record functionality, providers still struggle to manage data across EHRs, payers, labs, devices, and applications. For ISVs, this fragmentation creates an opportunity.

ISVs that embed healthcare payments functionality directly into EHR workflows—automating accounts receivable, enabling digital and text-based payment options, and improving revenue cycle management—can address persistent financial and operational gaps. By extending beyond record-keeping into the entire payments lifecycle, these platforms can differentiate in a crowded healthcare IT market while delivering measurable value to providers.

For many software companies, partnerships offer a practical path to navigating the complexity of the healthcare ecosystem. By focusing on core competencies while integrating complementary healthcare or payments technology, companies can reduce development timelines and accelerate speed to market. A partnership model also creates mutual value, enabling both organizations to benefit from shared roadmap innovation, referral partner programs, and expanded sales distribution channels.

Whether it’s access to embedded healthcare payments, flexible point‑of‑sale financing, or text-to-pay functionality that helps providers manage their businesses more effectively, embedded solutions create a stickier footprint while generating incremental revenue. Success depends on partnering with a provider that offers the infrastructure to scale alongside your business—while remaining flexible enough to adapt as market needs evolve.

U.S. Bank | Elavon – Smarter Payments That Move Your Business Forward

Backed by the strength and stability of U.S. Bank, Elavon delivers the best of both worlds: the financial services infrastructure of one of the nation’s most established banks, combined with the agility required to compete in a fast‑moving software and payments landscape. With hundreds of integration points, partner programs designed to support growth at every stage, and deep vertical expertise, Elavon offers a payments journey tailored to your business. Connect with us to learn more.

The post Embedding Payments for Growth: How ISVs Can Scale Through Vertical Focus and Partnerships appeared first on PaymentsJournal.

As transformative payment types like digital assets and real-time payments have emerged, many have treated their eventual dominance as a foregone conclusion.

While these methods have gained rapid traction in some regions, payments inertia has proven difficult to overcome in others. In the U.S., a deeply entrenched financial services infrastructure has fostered a card-driven ecosystem where alternative rails have struggled to gain meaningful share.

In Switzerland, cash has long held a unique cultural and functional appeal. A key driver is the nation’s strong preference for financial privacy—perhaps not surprising for the country synonymous with the Swiss bank account.

This preference has not wavered even as new payment options have come to market. In fact, data from the Swiss National Bank (SNB) found that mobile payment apps like Apple Pay and Switzerland’s own Twint accounted for 17% of transactions last year, down one percentage point year-over-year.

Circulating High Values

Cash remains a defining feature of Swiss commerce. The country issues the world’s third-highest denomination banknote—the 1,000 Swiss franc note, worth approximately $1,250—and it extends even to large purchases, including automobiles.

That said, cash is no longer the leading payment method. According to the SNB, debit cards were used in 37% of transactions last year, while cash accounted for roughly 30%. Both figures were largely unchanged year-over-year.

For the Love of Cash

Despite Swiss consumers’ preference for privacy, there has been little catalyst to drive a shift from debit and cash toward digital alternatives. Even with the launch of the Swiss Interbank Clearing Instant Payments (SIC IP) system—and exploration of interoperability with the neighboring European Union’s TARGET Instant Payment Settlement service—adoption has been limited.

One possible impetus for change could come from merchants. While much attention has been paid to card interchange fees, cash handling also carries meaningful costs, including security, storage, and transportation.

This is why many EU merchants recently banded together to urge lawmakers not to mandate cash acceptance. They argued such requirements would force businesses to maintain costly cash-handling infrastructure.

However, the prevalence of cash in Switzerland suggests physical currency will continue to be a core part of the retail environment. Many respondents in the SNB survey said they feel a greater sense of control when paying with cash and value the tangible nature of the experience.

Further reinforcing this outlook, the SNB recently held a competition to design its next series of banknotes, slated to launch in 2030—a sign that Switzerland’s affinity for cash is unlikely to fade anytime soon.

The post Mobile Payments Stall as Switzerland Clings to Cash and Debit appeared first on PaymentsJournal.

Real-time payments have reshaped entire economies in markets like Brazil and India, but they are not just a domestic rail for faster account-to-account transfers.

India’s UPI, for example, has expanded beyond its borders through integrations with systems in other regions and continues to add new features at a rapid pace.

The promise of real-time payments once drove Mastercard to acquire most of European fintech Nets’ payments services for $3.2 billion, seven years ago. The deal brought Nets’ real-time payment infrastructure, bill pay, and electronic invoicing segments under Mastercard’s umbrella. At the time, the payments giant sought to move beyond card payments and expand its network.

Now, however, Mastercard is reportedly consulting investment bankers on a plan to divest the unit. According to the Financial Times, the sale is targeting private equity firms and is expected to fetch significantly less than Mastercard originally paid.

Long-Term Strategy Questions

Taken on its own, this could appear as a retreat from a deal that fell short on revenue growth. But coming just days after Mastercard’s blockbuster acquisition of stablecoin payments infrastructure firm BVNK, it raises questions about the company’s long-term strategy.

The BVNK acquisition, valued at $1.8 billion, represents the largest digital assets deal to date. It comes after nearly every major player in financial services has made a splashy stablecoin investment.

Mastercard stated that the objective of the deal is to reach markets not currently served by its card network, including cross-border remittances, business payments, and payouts in the creator and gig economies.

The Shape of Payments to Come

While stablecoins are a powerful solution in these applications—especially for freelancers and contractors—real-time payments can also be highly effective.

Indeed, the Clearing House reported that its RTP Network continues to set all-time highs in payments value and volume. While large commercial settlements account for many transactions, much of the recent growth is driven by use cases like earned wage access disbursements and gig economy payouts.

Given the growing entrenchment of real-time payments, Mastercard’s pivot from Nets to BVNK is unlikely to redefine the payments landscape. Instead, both payment types are set to thrive in an increasingly crowded market.

The post Could Mastercard’s Instant Payments Divestiture Signal a Strategy Shift? appeared first on PaymentsJournal.

The European Union has made overtures to Turkey about joining the Single Euro Payments Area (SEPA), though Ankara has yet to respond.

An EU envoy suggested that participation in the payments system could deepen Turkey’s integration with the European economy and make it easier—and cheaper—for people to send money across borders. Several other non-EU countries, including Albania, Moldova, Montenegro, and North Macedonia, joined SEPA over the past year, bringing the total number of participating nations to 41.

According to Reuters, EU officials raised the proposal with Turkey’s foreign minister in Ankara last month.

“SEPA could present a valuable opportunity to strengthen Turkey’s economic integration as a candidate country and a key trade and economic partner of the EU,” chargé d’affaires Jurgis Vilcinskas told Reuters.

Potential Roadblocks

So why hasn’t Turkey jumped at the opportunity? The EU is ⁠already its largest trading partner, with more than €200 billion in trade volume. The EU estimates that countries that joined SEPA over the past year could collectively save up to €500 million.

One roadblock is regulatory alignment. To join SEPA, Turkey would need to comply with EU rules on payment services, including the Payment Services Directive, which would require stronger anti-money laundering measures and enhanced data protection standards. Vilcinskas noted that the European Commission is willing to support Ankara through this process.

There’s also some concern about how such changes might affect parts of Turkey’s domestic economy.

“Turkish banks would be losing some fee revenue from foreign transfers,” said Hugh Thomas, Lead Analyst of Commercial and Enterprise at Javelin Strategy & Research. “So they may be less inclined to jump into SEPA, if asked their opinions by the regulators.”

Slow and Steady

At the same time, Turkey has not rejected the proposal outright. Given that its EU accession talks have been ongoing since 2005, progress on SEPA may simply take time.

“The last words you’d ever use to describe efforts to better integrate Turkey with the EU would be ‘fast moving,’” said Thomas. “This is likely just more of the same.”

Ironically, Turkey’s payments economy is already among the most advanced globally. According to Visa’s 2026 Financial Services Research, contactless payments and QR codes dominate everyday transactions, with Android-based contactless payments reaching 70% usage in settings such as supermarkets and cafes.

The post The EU Invites Turkey to Join SEPA appeared first on PaymentsJournal.

Stripe is betting that the next evolution of payments won’t be drive by humans, but by autonomous AI agents transacting on blockchain rails.

Blockchain has become a core component of the financial services infrastructure, underpinning everything from stablecoins to artificial intelligence models—and increasingly serving as the foundation for programmable, always-on commerce.

Stripe has been an avid investor across these areas, including the acquisition of stablecoin infrastructure firm Bridge and its expansion into agentic commerce through integrations with buy now, pay later leaders in recent years.

Last year, the payments firm unveiled Tempo, a blockchain effort launched in a collaboration with digital assets firm Paradigm. Tempo was built to facilitate high volumes of payments, and as the blockchain brings its mainnet online, there are reportedly over 100 services integrated.

Stripe highlighted Tempo’s capability to reshape cross-border payouts, payments, and remittances, and the blockchain could even play a role in embedded finance and tokenized deposits. Stablecoins are expected to serve as the workhorses facilitating many of these functions, and Stipe has highlighted its objective to bring “real payment workloads” to digital assets.

Sessions with an Agent

Stablecoins will also likely factor into the operations of the newly launched Machine Payments Protocol (MPP) an open agentic commerce standard designed to provide the infrastructure for AI agents to transact autonomously.

Stripe and OpenAI first unveiled plans for the protocol last year after partnering to bring direct payments to ChatGPT. While the protocol runs on Tempo’s blockchain, MPP was designed to integrate with other payments rails, including digital wallets and cryptocurrencies.

One of the key features of the protocol is that it supports “sessions,” where after funds and instructions are determined upfront, allowing agents to carry out multiple transactions with no further interaction.

Sorting the Shared Language

While the session capability is notable, there are still lingering doubts about consumer and business appetite for agentic commerce. Data from Coinbase’s agentic commerce protocol suggests that most transactions on the platform still consist of pilots and trials.

Still, this hasn’t stopped leading payments firms from developing their own agentic commerce protocols, including platforms from Google, Visa, Klarna, and others. Because these protocols are intended to function as a shared language for agentic commerce, the increasingly fragmented landscape could create challenges for merchants, financial institutions, and consumers seeking to develop cohesive strategies.

The post Stripe Launches Tempo Blockchain to Power AI-Driven Payments appeared first on PaymentsJournal.

India’s Unified Payments Interface (UPI) has grown into the dominant force in global instant payments, accounting for more than four out of every five real-time transactions worldwide. The system’s rapid rise has been fueled by strong government support, widespread consumer adoption, and acceptance across a rapidly expanding network of merchants.

According to MSN, India’s finance minister, Nirmala Sitharaman, said the network accounted for 81% of global real-time payments last year, cementing UPI’s position as the largest instant payments system in the world.

The total volume of retail transactions on UPI has skyrocketed, rising from ₹7,176.9 crore (around $77 million) in FY22 to ₹22,167.9 crore (roughly $2.39 billion) in FY25. Even as UPI approaches saturation in India’s immense payments market, the network has still found room to grow—transaction volume on the system increased by more than 35% last year.

The growth was fueled by several factors, including the prevalence of smartphones, broader financial inclusion, and improved transaction safeguards.

Biometric Guardrails

Among the most notable of these safeguards is biometrics authentication, which was launched on UPI last year. Previously, consumers were required to enter a PIN to authorize transactions. However, India’s regulators added biometric functionality to reduce checkout friction while strengthening transaction security.

This made biometric authentication available to users who opt in, with their data managed through Aadhaar, a digital identity program operated by India’s government. Aadhaar issues citizens a 12-digit number after they provide verifiable biometric and personal data.

Like UPI, Aadhaar is also the largest system of its kind in the world and has frequently been spotlighted as a gold standard for other digital identity systems to emulate.

Fighting Faster Fraud

Sitharaman credited Aadhaar authentication with improving UPI payments, but she also highlighted the persistent challenges of fraud. One reason biometric programs have been slow to gain traction in many parts of the world is that they require both consumer adoption and merchant investment in acceptance infrastructure.

While government backing for Aadhaar and UPI suggests that infrastructure deficiencies may not be a major obstacle in India, gaps in consumer awareness and adoption will likely remind. And since faster payments often equate to faster fraud, challenges related to fraud persist across UPI and other instant payments systems.

To combat this issue, Sitharaman noted that India’s regulators and financial institutions are also conducting frequent awareness campaigns via text messages, radio campaigns, and other platforms.

The post UPI Tightens Grip on Global Instant Payments Market appeared first on PaymentsJournal.

In today’s technology landscape, an unusual amount of infrastructure is connecting current-generation systems to what comes next. These integrative bridges offer a practical step toward a future where ACH can operate alongside stablecoin settlement, or where companies can run quantum and classical computing workloads in parallel.

They also present investment opportunities, as Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, explains in his new report, Building the Bridge to Payments: 3 Investment Trends for 2026 and Beyond. Fintech investment is consolidating around infrastructure rather than interfaces, with capital flowing toward revenue-generating, enterprise-focused platforms that connect legacy systems to emerging technologies. Miller identifies three areas where this bridging framework could drive durable use cases and profitability: agentic AI, quantum computing, and stablecoins.

“If there were no uses for the technologies, then connecting to them would be unimportant,” Miller said. “We’re at the point in time where there are some uses, and so the forward-looking view is that bridging to those is getting ahead of the game. It is where the puck is going.”

The Rise of Agentic AI

Agentic commerce is emerging as a foundational architectural shift, redefining how payments are executed and increasing demand for platforms that support multi‑rail transactions, agent‑specific protocols, and autonomous operations. Early traction has been strongest in enterprise and B2B environments.

At scale, agentic systems require clearly defined parameters—and businesses are generally better positioned than consumers to define them. Companies know what they want to optimize for.

“They have processes in place to understand how many bathrooms they have, so they know how much toilet paper they need and on what cadence,” Miller said. “Businesses are best able to create the parameters that would lead to successful delegation. Agents rely on data. You have to feed them data so that they can do the things you want them to do. Businesses have spent trillions of dollars gathering that data, cataloging that data, cleansing that data, and organizing that data.”

By contrast, a profitable consumer-facing agent model has yet to emerge. Even the most optimistic forecasts from consumer AI companies do not suggest that monthly subscription fees will generate attractive near-term returns. Enterprise applications, however, are already monetizing effectively.

Quantum Computing Comes of Age

The same infrastructure-first logic is shaping the trajectory of quantum computing. Quantum computing has reached a useful stage of maturity as the number of stable, operable qubits continues to increase. Progress is gradual rather than sudden, but steady gains have brought certain use cases into the realm of plausibility that once seemed remote.

“There’s not going to be even a small shift towards quantum computing loads in 2026,” Miller said. “But it is not crazy to think that some things will be quantum computable at scale in enterprises in the relatively near-term future. The ways that quantum computers work and the types of data and skill it takes to program those quantum computers—they all have to be developed for those use cases to be realized. This is forward-looking, but it is no longer, well, that’ll be fun someday. It’s more like, well, that might be fun in in two or three years.”

One near-term implication, somewhat counterintuitively, involves criminal activity. A longstanding concern is quantum’s potential ability to break current encryption standards, exposing sensitive data. In response, some threat actors are stockpiling encrypted data today in anticipation of future decryption capabilities.

“The forward-looking crime going on that suggests that the time is right,” Miller said. “That play only makes sense if later means sometime pretty soon, and not 2350. If you steal a database today and you can’t encrypt it for 100 years, the economic value of that is minimal. This suggests that we are reaching the point in time where there will be those actual use cases. This is not speculative anymore. It is a matter of when and not if.”

Making Use of Stablecoins

Just as quantum security is gradually shaping future risk management, stablecoin rails are quietly reshaping payments. Rising acceptance has effectively stripped stablecoins of their standalone “crypto” label.

The ecosystem has moved beyond stand-alone crypto apps and wallets that can’t communicate with each other, reaching a point where stablecoins are embedded within the payments landscape. End users no longer have to choose stablecoins in B2B transactions; in many cases, the decision is made automatically.

“Businesses still have to be aware that they’re making a choice, but it is just another choice,” said Miller. “You might select between a Swift transfer and a wire transfer, but it’s just another line on the menu. Nobody talks about how we actually send the information for an ACH—it’s just a rail. That’s the point that we’re reaching here.”

Stablecoins have become one rail among many. Sometimes users actively select them; other times, the choice is made upstream through payment orchestration platforms that automatically route transactions based on cost, speed, or liquidity considerations.

“That probably is already happening, and you’re not aware of it because you’re buying on one platform and the merchant is listing on a different platform,” said Miller. “The platform has constructed a stablecoin value transfer between you and the merchant behind the scenes for whatever reasons. That’s happening.”

Like quantum security and agentic commerce, stablecoin rails reflect a broader bridging era—an ongoing shift away from surface-level user experiences and toward deep, integrative capabilities. The common thread is making next-generation technologies operationally invisible while rendering them strategically and financially transformative.

“These are things that have been out there for a while, and people are building things to connect them,” said Miller. “Now you might have to monitor not how good are stablecoins, but rather how I’m going to connect to them. It’s not how good is quantum computing, it’s how will it be integrated into my tech stack. We’re getting closer.”

The post Bridging the Gap: Investment Opportunities in Emerging Infrastructure appeared first on PaymentsJournal.

Six years after the Group of 20 (G20) introduced an ambitious roadmap to address long-standing inefficiencies in cross-border payments, global regulators say progress has been made—but many of the most persistent problems remain unsolved. In a recent keynote address, Financial Stability Board (FSB) chair Andrew Bailey assessed how far the effort has come and where it still falls short.

Speaking at the FSB Payments Summit, Bailey pointed to the increased adoption of international standards as one of the most significant developments in recent years. These advances include the implementation of the ISO 20022 messaging protocol, expanded operating hours of financial institutions to better accommodate international payments, and stronger anti-money laundering and counter-terrorism financing standards.

Despite these achievements, there has been little improvement in the end-user experience. Delays, high fees, and lack of transparency in cross-border payments are still as prevalent today as they were decades ago.

Left unchecked, Bailey warned, these persistent frictions could erode the stability of the global financial system and ultimately stymy economic growth.

Unforeseen Developments

Bailey also reiterated FSB guidance from last year indicating that G20 countries are unlikely to meet the cross-border payment efficiency targets set for 2027. While uneven implementation of standards across member nations is partly to blame, a number of unforeseen developments have also complicated progress since the roadmap was created.

Technologies such as artificial intelligence, cloud computing, and digital assets are rapidly reshaping expectations for financial services firms. At the same time, fraud has become far more sophisticated—driven in part by these same technologies—posing a growing threat across payment channels, especially in cross-border payments.

The Four-Part Plan

To combat these issues, Bailey outlined a four-part plan. First, public-sector entities should create local action plans to ensure international recommendations are effectively implemented at the domestic level. Second, they should prioritize innovation and modernize infrastructure to better support cross-border payments.

Third, Bailey called on member nations to reduce regulatory compliance costs, noting that the FSB has identified numerous cases in which regulatory hurdles have slowed cross-border payments. Finally, he emphasized that greater participation from the private sector will be key to reshaping international transactions.

Calls for a consortium-based approach have grown more common as the financial services industry confronts complex challenges, including fraud. In the context of cross-border payments, Bailey noted that deeper collaboration between public and private stakeholders will be essential to ensure regulators focus on the most pressing issues and take effective action.

The post FSB Chair Calls for a Consortium to Tackle Cross-Border Payments Woes appeared first on PaymentsJournal.

The capabilities of artificial intelligence have improved exponentially, and AI agents are being delegated increasingly complex tasks every day. However, data from Coinbase’s protocol suggests consumers may not be on board with agentic commerce yet.

The crypto giant launched the x402 protocol last year, designed to use the existing HTTP “402 Payment Required” status code to facilitate instant stablecoin payments. The objective was to give AI agents a mechanism to exchange digital assets as seamlessly as they exchange data.

However, as CoinDesk notes, reports on last month’s usage of the x402 platform found average daily transactions of approximately 131,000, with average daily payment volume of roughly $28,000. Notably, even on the highest-volume day, the activity appeared to consist entirely of testing and trial runs.

Not a Referendum

At first glance, the data runs counter to the prevailing narrative that agentic commerce will soon reshape the retail landscape. In reality, it likely reflects less a referendum on the technology and more a reminder that agentic commerce remains in its early stages.

That point can be easy to lose sight of as examples of agentic-driven transactions become more frequent. Mastercard, for instance, recently facilitated two transactions that expanded both the global reach of agentic commerce and the scope of ongoing pilots.

The Tech Will Have Its Day

As agentic commerce platforms began emerging last year, companies like Google and Visa developed protocols designed not only to power AI agents but also to establish guardrails ensuring those agents operate within defined parameters.

While many of these platforms reached the market last year, transaction volume has yet to materialize. This makes this year pivotal, as merchants, financial institutions, and consumers begin exploring the technology and ironing out any wrinkles.

Given the hype surrounding these platforms, their adoption will be closely scrutinized—as Coinbase has already experienced.

“The potential is still there, I just think the AI integration at scale is what’s holding back adoption.” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It’s going to take some time for most FIs to adopt agents and therefore use Coinbase’s agentic solution. This tech will have its day but might just take some time to adopt.”

The post Agentic Commerce Traffic on Coinbase’s Protocol Has Yet to Accelerate appeared first on PaymentsJournal.

Group of 20 (G20) nations have committed to making cross-border payments more efficient, but regional complexities and outdated infrastructure have made progress slow.

The correspondent banking model adds another layer of complexity, requiring multiple banks to shuttle payments across borders. While the Swift messaging network has long served as the global hub connecting these banks, challenges remain.

This is why Swift proposed new rules for retail cross-border payments last year. Over 25 banks have signed on and will begin processing payments under this framework by June.

This marks a strategic shift for Swift, which has historically focused on intrabank and commercial payments. Rising consumer demand for cross-border payments and remittances—particularly in major markets like India, China, Pakistan, Germany, and Bangladesh—has prompted the network to broaden its focus.

Appetite for Expansion

Small businesses are also eager to expand their footprint internationally, especially younger entrepreneurs from Gen Z and millennial cohorts. Yet, delays, transaction fees, foreign exchange complexities, regional regulations, and lack of payment visibility have long been persistent pain points for cross-border payments.

Swift’s new framework aims to mitigate these challenges by providing cost transparency, traceability, and near-real-time settlement in many cases. The network expects additional payment rails to join by the end of the year.

Faster Than Benchmarks

This efficiency would be welcomed in a market that has continued to face challenges. After spotlighting the critical role of cross-border payments in the global economy five years ago, G20 nations developed a strategy to make international transactions more efficient and transparent by 2027. A recent progress report, however, indicates minimal advancement—falling short of expectations.

Already, roughly 75% of payments on Swift’s network reach the beneficiary bank in under 10 minutes, faster than the G20 benchmark. With the new rules, that percentage is expected to climb even higher.

The post Swift Moves Ahead with Retail Cross-Border Payments Network appeared first on PaymentsJournal.

An AI agent recently bought a T-shirt—an unassuming purchase that nonetheless marks two milestones for agentic commerce.

First, the transaction took place in Spain, making it Europe’s first fully agentic payment. Second, it was processed by Banco Santander, the first time an agentic commerce transaction has been executed within a regulated banking environment.

The trial, facilitated by Mastercard Agent Pay platform, was designed to ensure that AI agents can complete transactions while banks and customers retain full visibility and control. By successfully operating within the stringent compliance standards of a regulated financial institution, the pilot offers an early blueprint for how agentic payments could be integrated into banking.

Increasing the Scope

Since launching Agent Pay last year, Mastercard has rapidly expanded the platform’s reach. In November, the company piloted it in UAE with Majid Al Futtaim, the retail and hospitality conglomerate, including a use case that enabled an AI agent to purchase movie tickets at a local cinema.

At a recent AI summit in India, Mastercard conducted another agentic commerce pilot with expanded scope. That trial incorporated Mastercard-issued cards from two banks, along with multiple payment processors and merchants—demonstrating how the model can function across a more complex ecosystem.

Scaling the Infrastructure

As AI agents take on a larger role in payments, issues such as security, accuracy, and privacy move to the forefront. Building a durable framework is important—one reason major technology companies are developing agentic commerce protocols that define how agents authenticate, transact, and operate within set guardrails.

The Mastercard and Banco Santander pilots show that agentic commerce can function within the current regulatory and financial infrastructure. But scaling it will still be challenging. Risks ranging from fraud and misuse to technical errors underscore the need for strong controls.

Banco Santander has indicated it will continue testing agentic commerce internally and explore additional use cases. Mastercard, meanwhile, is expected to keep expanding Agent Pay globally—potentially moving beyond consumer transactions and into commercial and enterprise payments.

The post Santander and Mastercard Pilot Agentic Commerce appeared first on PaymentsJournal.

The business case for adopting real-time payments in enterprise settings is compelling. Instant settlement drives efficiency in processes long built around paper checks, while also giving organizations unprecedented control over liquidity and cash flow.

The liquidity advantage is also fueling growth on the consumer side. The Clearing House recently reported that its RTP Network reported two million transactions in a single day and set a new single-day value record of $8.36 billion. The network attributed this growth to adoption across use cases like earned wage access (EWA) disbursements, gig economy payouts, and account-to-account transfers.

“Consumers expect money to move quickly, whether that be from their employer, paying a friend, or a biller,” said Ben Danner, Senior Debit Analyst at Javelin Strategy & Research. “EWA is built around faster access to funds and the same could be said for working gig economy jobs like ridesharing.”

“As budgets tighten, consumers are going to be moving their balances they may have built in wallets and P2P apps back into their banks checking account,” he said. “We’ve seen growth in core deposits suggesting consumers are increasingly relying on their financial institution, which is generally perceived safer than app-based payments.”

Seeking Payments Alternatives

Consumers, meanwhile, continue to navigate persistent inflationary pressures. Many have leaned more heavily on credit cards, but rising default or delinquency risks have prompted lenders to tighten underwriting standards, reduce credit lines, and focus more on affluent segments.

As a result, alternative payment methods have gained traction. Buy now, pay later (BNPL) services have skyrocketed in popularity, even as overall credit card debt levels remain elevated—both a signal of consumer strain and a growing concern for traditional issuers.

Keeping Funds In-House

These factors have made real-time payments an attractive alternative for debt-laden consumers. BY enabling consumers to hold onto funds until the moment a payment is due, these systems provide a powerful cash flow management tool. That dynamic helps explain why the RTP Network has continued to expand even after the launch of the Federal Reserve’s FedNow instant payments service two years ago.

In fact, both networks continue to post new volume and value records. While much of that growth has been driven by commercial payments adoption—particularly after transaction limits were raised to $10 million last year—the same liquidity and timing benefits that appeal to businesses are increasingly resonating with consumers as well.

The post RTP Network Sets Records After Consumer Cash Flow Demand Rises appeared first on PaymentsJournal.

PhonePE and Google Pay hold dominant shares of India’s digital wallet market, where most transactions run on the Unified Payments Interface (UPI) real-time payments rail. While Apple Pay would enter an already crowded ecosystem, early signals suggest the tech giant’s wallet could have a larger impact than initially expected.

When Apple announced plans roughly a month ago to bring Apple Pay to India, the launch seemed mainly targeted toward iPhone users who are also Visa and Mastercard cardholders. This segment would be able to use Apply Pay for contactless retail payments.

Since then, Apple has reportedly entered discussions with three of India’s largest banks: ICICI Bank, HDFC Bank, and Axis Bank. This would expand Apple Pay’s reach to customers of those institutions in addition to existing card network users.

A key question, however, is UPI integration. Earlier indications suggested Apple Pay would launch without UPI support—a limitation that would constrain adoption in a market where UPI underpins the vast majority of digital transactions. Most recent reports, including one from Bloomberg, indicate that UPI integration is expected by the time Apple Pay launches in India, potentially mid-year. If realized, this would materially expand the wallet’s footprint.

Seeking New Markets

Apple Pay is the leading mobile wallet in the U.S., its home market, with over 90% of the market and roughly 65.6 billion users. This market dominance has been accomplished by the near ubiquity of the iPhone and Apple’s strong competitive moat.

That strong domestic position has prompted Apple to look abroad for incremental growth opportunities, including cross-border payments functionality in select markets.

India, the world’s most populous country, represents a powerful opportunity. iPhones now account for roughly 10% of India’s smartphone market, and Apple recently opened its sixth retail store in the country—a signal of its long-term commitment to the region.

Adding Biometric Authentication

Previous attempts to deepen Apple’s footprint in India were slowed by regulatory hurdles, like stricter requirements around biometric authentication. Apple’s early and consistent integration of facial and fingerprint recognition has helped normalize biometric verification globally. As biometrics have become more mainstream, their role in payments has expanded as well.

Historically, India required PINs or two-factor authentication to authorize digital transactions. Recent regulatory updates now allow for biometric authentication for UPI transactions within transaction limits—a shift that could lower friction for wallets capable of supporting it.

Still, competition is intense. Even Amazon Pay has struggled to gain traction in India’s digital wallet market. While Apple’s technology, ecosystem, and partnerships are clear advantages,  the company faces formidable incumbents and structural challenges as it seeks to establish Apple Pay in India.

The post Apple Pay Could Have a Bigger Footprint in India Than Expected appeared first on PaymentsJournal.

WEBINAR

The Business Case for Payment Hub Modernization

March 10, 2026

1:00 pm EST

[contact-form-7]

Are legacy payment systems holding your business back?

In today’s digital economy, outdated payment systems can be costly to maintain, pose security risks, operate inefficiently with slow batch processing, and limit your ability to innovate.  

In this webinar, Scotty Perkins, Head of Product Management at ACI Worldwide, Tyler Pichach, Global Head of AI Strategy at Microsoft, and James Wester, Co-Head of Payments at Javelin Strategy & Research, will show how a modern payment hub can deliver measurable business value and a competitive edge.   

Stop viewing payments as a cost center. Discover how a modernized payment hub can become a driver of revenue, efficiency, and innovation. 

In this webinar, you will gain insights into:

• The top benefits for payment hub modernization
• Real-time payment readiness, preparing for FedNow and RTP expansion  
• Supporting instant payment rails and ISO 20022 messaging  
• Building scalability with cloud-native solutions  
• Enabling new revenue streams and business models  
• Accelerating digital transformation initiatives

Our Presenters

Scotty Perkins

Head of Product Management

Tyler Pichach

Global Head of AI Strategy

James Wester

Co-Head of Payments

The post The Business Case for Payment Hub Modernization appeared first on PaymentsJournal.

Public transit systems are critical infrastructure that shuttle commuters and fuel tourism. However, purchasing tickets and reloadable passes is often a complex process that creates long queues and checkout friction.

That’s why more cities are moving to contactless payments, as San Francisco did last year with its Bay Area Rapid Transit (BART) system. Now, the Seattle and Puget Sound region’s transit system, ORCA, is launching contactless functionality that will allow riders to tap credit and debit cards, as well as leading mobile wallets like Apple Pay and Google Pay.

While this capability will likely be a boon for daily travelers, it can also dramatically reduce strain on the system during high-traffic events. For example, Seattle is expected to see a surge of visitors when it hosts six matches of the FIFA World Cup this summer. The city also has a packed calendar of concerts and festivals throughout the year.

Prepaid to Contactless

Delivering this functionality requires a substantial infrastructure investment, but the benefits of contactless payments outweigh the costs in this case. As a result, the ticketing and transit segment is one of the few markets shifting away from prepaid models after years of reliance on them.

Contactless payments accelerated during the pandemic due to hygiene concerns, and adoption has continued to grow because of their convenience. In addition, contactless payments offer flexibility that can drive revenue gains. For example, more riders may be enticed to use public transit when they don’t have to wait in long lines or decipher complex fare structures.

Taking the Pitch

This line of thinking was one reason the UK recently scrapped its transaction limits on contactless payments. Tap-to-pay has become one of the most popular payment methods in the region, and enabling more higher-value purchases can further support economic activity.

Despite the benefits of contactless payments, optionality is key. To that end, ORCA will continue to issue prepaid cards for riders enrolled in discounted or free-fare programs, such as seniors or those with organizational sponsorships.

This inclusive approach to payments can help ensure efficient travel for fans who want to be there when the USA takes the pitch against Australia this June.

The post Seattle Area Transit System Adds Contactless Payments Ahead of World Cup appeared first on PaymentsJournal.

Secure real-time payments are foundational to the open banking model, enabling users to pay directly from their bank accounts across a wide range of use cases. This capability is largely delivered through APIs provided by third-party fintechs.

This is the model that eBay plans to implement in the UK, where the e-commerce giant will tap into the substantial pay-by-bank network of TrueLayer to introduce account-to-account payments for its customers.

However, this partnership goes further than simply adding another payment option. eBay is also making a substantial investment in TrueLayer through its venture capital arm, signaling confidence in both the fintech itself and the broader open banking model. While this is a notable development, the long-term implications remain to be seen.

“This will be interesting to watch,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “It’s a stretch to say that the fact that eBay implemented pay-by-bank is now a broad validation for open banking platforms. What will amount to validation is how many eBay shoppers choose that payment method at checkout vs traditional card payments.”

“The proof will be in the figgy pudding—as they say across the pond—when we see the payment volume materialize,” he said.

Two Key Features

Many merchants have been drawn to real-time payments as a lower-cost alternative to credit cards and their associated interchange fees. That said, credit cards do offer certain benefits that help justify their costs.

“Card payments have evolved over their 50+ year lifespan, and the two-step process enables sellers to verify and claim good funds immediately at the time of purchase, while not actually charging the cardholder until the goods are shipped,” Apgar said. “This, combined with a well-defined chargeback and dispute process, highlights two key payment features that consumers forfeit when opting for pay by bank.”

A Challenging Road

These advantages, coupled with the dominance of card payments, suggest that real-time payments still face a challenging path to wider adoption in the UK.

“The lower fees and real-time settlement are certainly advantages for sellers, and we may see eBay and others offer incentives to consumers who select pay-by-bank,” Apgar said. “While there are many great use cases, it remains to be seen if buying goods from e-commerce marketplace sellers is one of them.”

The post eBay Adds Pay-by-Bank in the UK and Boosts Open Banking Investments appeared first on PaymentsJournal.

The next phase of agentic commerce may not be about browsing or checkout, it may be about control of the wallet. Coinbase is introducing agentic wallets designed to function as full-service, autonomous money management tools, enabling AI agents to make payments, trade tokens, and earn yield on investments without constant human oversight.

The objective is to add financial functionalities to any AI agent through a plug-and-play wallet solution. One of the main benefits for users is that AI agents never sleep, allowing them to constantly search for opportunities and respond in real time.

“This is a big deal because it lets AI agents hold and spend money on-chain autonomously, and it even offers spending limits and features like risk screening,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “What this really will do is increase stablecoin activity dramatically and has the ability to automate DeFi activity and other on-chain transactions.”

“This will draw a lot of volume to Coinbase’s native chain Base as well,” he said. “On the flip side, if agents get compromised, mistakes and losses can add up quickly. So adoption of this tech will depend on of they have strong enough controls for developers and institutions.”

Minimal Human Intervention

Security and accuracy have been top of mind since the emergence of the nascent agentic commerce paradigm, as AI agents are designed to make decisions with minimal human intervention. As a result, there are many ways agentic AI could disrupt the current retail landscape—especially if these systems are exploited or misused.

For its part, Coinbase has implemented guardrails within its agentic wallets to ensure agents stay on task, including programmable spending limits and session-level controls. Users will also have access to a streamlined interface to monitor their agent’s status, fund wallets, and issue new prompts.

Building the Shared Language

Developing stable infrastructure to support AI agents has become a top priority for many of the world’s leading financial players in recent months. Google, Visa, and others have launched agentic commerce protocols designed to serve as a shared language among merchants, financial services providers, consumers, and AI agents.

Coinbase has also launched its x402 protocol, which leverages the previously unused HTTP “402 Payment Required” status code to facilitate instant stablecoin payments. The company’s agentic wallet launch is an offshoot of x402, which has reportedly gained significant traction. According to Coinbase, the protocol has facilitated 50 million transactions since its launch last year.

The post Coinbase Unveils Agentic Wallets to Power Autonomous AI Spending and Investing appeared first on PaymentsJournal.

Splitting a bill or chasing down a friend for concert tickets often takes more messages than the payment itself. Cash App is betting it can shrink that friction by turning everyday conversations into payment moments.

The company is allowing users to send payment links, which it hopes will provide a more informal way to request or receive money. The goal is to embed a hyperlink directly into a text message, email, or social media direct message, transforming an ongoing chat into a quick transaction.

Cash App says the feature grew out of Gen Z surveys showing that payments among friends often involve multiple back-and-forth conversations. The company is positioning the move as a way to ease the social friction around asking for money, allowing users to add tone and context within the conversation where it’s already happening.

Keeping Up with Zelle, Venmo

It’s also a competitive play. Zelle and Venmo already let users send profile-based links to request funds, and Venmo offers a widget that allows users to send payments without leaving the interface. Apple Cash, meanwhile, provides a fully embedded P2P experience within iMessage.

Cash App needs a distinct angle to compete with its better-known rivals. It has 57 million user accounts, compared with Zelle’s 151 million and Venmo’s 83 million. By making payments feel more casual and conversational, Cash App hopes to make the experience simpler for everyone.

“It will be a welcome addition to the user experience of paying and requesting money from others,” said Ben Danner, Senior Analyst for Debit at Javelin Strategy & Research. “Practically everyone—not just Gen Z—is texting these days, and it allows for streamlined communication before and after sending the payment link. I usually follow up friends after sending them money through a pay app—’Did you get my Venmo?’”

Expanding the Use Cases

P2P transfers have become an everyday staple. Cash App links are designed to streamline the process, letting users settle up without switching between apps.

However, both participants must have a Cash App account. If a recipient doesn’t, they’ll need to sign up before completing the transaction.

At the same time, Cash App recognizes that P2P transfers are expanding beyond friends and family. Research from eMarketer estimates that social commerce sales have reached $60 billion. Cash App is emphasizing that its new links also support business use cases, including recurring and group payments.

The post As the P2P Arms Race Accelerates, Cash App Adds Payment Links appeared first on PaymentsJournal.

Buy now, pay later loans have become a critical tool for consumers managing everyday expenses. However, persistent concerns remain about the transparency of installment loans and the potential for misuse.

To address these issues, the United Kingdom is instituting regulations that will place BNPL providers under the oversight of the Financial Conduct Authority (FCA). The new framework has four key components. First, customers must have full visibility into the terms of their BNPL agreements, including due dates, interest rates, and late fees.

Second, lenders will be required to conduct affordability checks to ensure borrowers aren’t overextending themselves and can reasonably meet repayment obligations. Third, if a customer experiences financial hardship, lenders must provide support and debt-assistance guidance. Finally, consumers will have the right to escalate complaints to the UK’s Financial Ombudsman Service.

The Preponderance of Debt

The goal of these measures is to foster an ecosystem in which BNPL providers can operate sustainably while customers are protected. One frequently voiced concern is that the rapid growth of installment lending is contributing to a preponderance of “phantom debt.”

Because many unregulated BNPL providers were not required to report lending data to credit bureaus, there has been limited visibility into whether cash-strapped consumers are accumulating unsustainable debt.

In response, some BNPL companies began voluntarily reporting to credit bureaus. Others, however, declined, arguing that the more fluid nature of BNPL loans would not be accurately captured on credit reports.

Not a Breed Apart

BNPL companies have also resisted comparisons to traditional credit products, positioning their services as alternatives to credit cards. Yet emerging data suggests  BNPL users are not a breed apart.

Data from LendingTree found that 41% of respondents reporting making a late BNPL payment last year, up from 34% the previous year. The survey also showed that more consumers are using BNPL for routine, everyday purchases.

These trends point to ongoing financial pressure among consumers. Due to these struggles, many credit card issuers have tightened underwriting standards and lowered credit limits. As more consumers turn to BNPL to bridge the gap, concerns about phantom debt—and calls for stricter regulation—are likely to mount.

The post UK to Regulate BNPL in Transparency Push appeared first on PaymentsJournal.

After regulators in the European Union forced Apple to scale back its App Store payment rules, could Japan be next?

Apple recently announced changes to its app distribution rules and payment options in Japan, ostensibly to comply with the country’s Mobile Software Competition Act (MSCA), according to 9to5Mac. But now a consortium of seven IT-related groups, representing more than 600 companies, has issued a statement arguing that Apple’s commissions remain so onerous that using external payment sites is not economically viable.

Apple Takes Its Cut

The new Japanese regulations allow developers to use alternatives to standard in-app systems. The goal was to allow companies to avoid paying commissions to Apple and Google, which take a percentage of app sales as well as in-app purchases. Prior to the MSCA, those commissions could reach as high as 30%.

Allowing outside payment methods was intended to let app developers sidestep those fees. However, Apple has continued to charge commissions of 15% to 20% even when purchases are made outside its own payment system. Developers argue that there is therefore “no economic incentive” to adopt the newly permitted payment methods, according to The Japan Times.

They also contend that in the U.S., similar external payment options are offered without additional commissions, placing Japanese consumers and businesses at a disadvantage. Since May 2025, Apple has been barred from imposing commissions or fees on purchases made outside its App Store in the U.S., following an injunction issued by a judge who found that Apple had imposed unlawful restrictions on developers. That ruling is currently under appeal.

The EU Took on Apple

Apple faced similar scrutiny in Europe. Previously, customers could only make purchases through its App Store, with Apple taking up to a 30% cut. After the EU required Apple to allow alternative app marketplaces, the company introduced a Core Technology Fee, which applied even to apps distributed outside the App Store, and imposed commissions of up to 17% on certain off-platform transactions.

Epic Games, the creator of the popular online game Fortnite, attempted to bypass Apple’s byzantine payment directives by offering discounted direct payment options within the game. After Fortnite was removed from both Apple’s App Store and Google Play, Epic’s legal and regulatory challenge contributed to EU action requiring Apple and Google to permit developers to alternative storefronts and payment options.

Japanese developers are now looking for a similar intervention from the Japan Fair Trade Commission, which is responsible for enforcing the new law.

The post The Battle Between Apple and App Developers Reaches Japan appeared first on PaymentsJournal.

It has been less than a year since Visa and Mastercard unveiled platforms designed to give AI agents a larger role in retail—and actual purchasing power. In the months since, there has been a rush to build agentic commerce protocols, plan merchant integrations, and map out the fraud risks and potential liabilities.

Amid this push to prepare for the next big thing, many financial institutions are struggling to balance modernization efforts with compliance obligations and customer protections. As Matthew Gaughan, Payments Analyst at Javelin Strategy & Research, detailed in the Agentic Commerce Approaches: How Can Banks Prepare? report, there are concrete steps organizations can take to lay the groundwork for agentic integrations and chart a path forward.

Leveraging the Shared Language

While the payment settlement process itself will likely remain unchanged in agentic commerce model, new front-end infrastructure capable of interacting with AI agents will be required. Some initiatives are already moving in this direction, including Google’s recent rollout of its Agent Payments Protocol (AP2) platform.

AP2 is a neutral, open-source framework that enables merchants, consumers, and third-party companies to interact with agentic AI. The platform also includes built-in safeguards, known as mandates, which are designed to verify that an agent has accurately followed a user’s instructions.

While Google’s protocol has attracted a strong group of backers, several other organizations have launched competing solutions. Although none of these platforms has reached widescale adoption yet, financial institutions should begin evaluating which approaches best align with their strategic and operational needs.

“Those protocols essentially are establishing a shared language that allow payments to occur as they normally do,” Gaughan said. “The common thread through a lot of these developments is that the payment itself is handled normally on the merchant’s back end. It’s the protocol more so just makes it possible for this payment flow to occur.”

“The main takeaway is that agentic commerce goes hand-in-hand with modernization efforts in general,” he said. “Banks are going to need to be aware of these different protocols that are coming into play and that probably will require them to overhaul some of their internal systems to be more interoperable and accessible through APIs.”

Drawing Lines in the Sand

The growing number of nascent agentic commerce platforms can muddy the waters for financial leaders attempting to map out a clear strategy. Compounding this complexity are broader, unresolved questions about how agentic commerce will ultimately work.

For example, if a customer authorizes an AI agent to make a purchase and something goes awry, who’s ultimately responsible? This question becomes even more complex in scenarios involving first-party fraud, deliberate customer manipulation, or cases in which an AI agent is deceived into transacting with a fraudulent merchant.

“I’m sure banks are keenly watching this, just because in a lot of ways they’ll probably be the one—at least from a regulatory standpoint—that is ultimately on the hook,” Gaughan said. “In documentation available to developers, OpenAI made it clear that it thinks merchants own the payments associated with the transaction and that any settlement, refunds, chargebacks and compliance remain with the merchant and their payment service provider.”

“They’re all trying to draw lines in the sand, but I don’t think any of them truly know where it’s going to end,” he said. “You’re going from a standard where you might not have a card present at a transaction, but there still was always human involvement in the process.”

As generative AI adoption has expanded, the need for human oversight has become increasingly apparent. While models continue to improve, they still produce outcomes that are difficult to explain or plainly incorrect.

These uncertainties have contributed to a healthy degree of skepticism about whether agentic commerce will achieve widescale adoption.

“It’s an area that’s ripe for mistakes,” Gaughan said. “Also, there are bad actors out there optimizing fraudulent websites to look real and that are perfectly positioned and made for AI agents to interact with. Ultimately, the customer loses out on their money and they don’t get what they were buying.”

“It’s going to be an issue,” he said. “It’s going to continue to develop as the technology gets more popular—if it gets more popular. But it’s an area where the players involved are keenly aware of what’s at stake.”

A Nebulous Topic

The potential upside of the technology means organizations can’t afford to ignore it altogether. Instead, financial institutions should begin educating themselves on the emerging protocols within the broader agentic ecosystem and determine how these technologies may impact different areas of the bank.

Each protocol comes with its own nuances, and banks will likely need to support multiple platforms to meet diverse customer needs. While much of the current discussion focuses on consumer use cases, many banks also serve merchant clients with distinctly different requirements.

In parallel with infrastructure planning, banks will eventually need to address fraud risk and compliance considerations—though there is no immediate need to dive deeply into those issues.  

“It’s a very big and still kind of nebulous area, but there are some important big-picture considerations that they should be mindful of when approaching this new framework,” Gaughan said. “It’s going to be a topic of conversation for any bank or board of directors, because everybody hears it nonstop every single day.”

Getting Ahead of the Game

Agentic commerce may still be in its early stages, but its potential to reshape payments makes it more than a passing buzzword. Given the industry’s mixed track record in responding to transformative technologies, it’s imperative for FIs to begin developing strategies now.

“Banks are still going strong, but many executives would admit that if you go back 10 years ago, they were a little behind on modernizing their technology,” Gaughan said. “It’s important that they be aware of what’s going on and how they can get ahead of things and set themselves up for a potential future where agentic commerce becomes more of the norm.”

“It’s not a given that that will be the case, but it’s important that they’re doing what they can to not only facilitate these transactions, but also to preserve any of their products—be it card products or accounts—anything to stay top of wallet for consumers,” he said.

The post Demystifying the Agentic Commerce Enigma appeared first on PaymentsJournal.

Jimmy Donaldson, also known as MrBeast, built his following by capturing the attention of young users on an exceptionally crowded platform. Now, the YouTuber with the world’s largest subscriber count is moving into fintech.

MrBeast is set to acquire Step, an app positioned as a one-stop shop for younger users. The platform offers tools for investing and financial management, along with spending and savings accounts linked to a Visa card.

A main goal of the app is to improve financial literacy for a new generation. Since launching in 2018, Step has attracted roughly seven million users and secured backing from Stripe and several venture capital firms. Even so, that user base represents just a fraction of MrBeast’s roughly 450 million YouTube subscribers.

Blurring the Lines

The move into fintech may raise concerns about the increasingly blurred lines between social media and financial services. Social platforms have often been a criticized as a breeding ground for financial misinformation, scams, and money mule recruitment.

Those concerns may be compounded by the fact that Step’s partner financial institution, Evolve Bank & Trust, has faced scrutiny and penalties related to its role in the collapse of fintech Synapse. Further uncertainty followed when the CEO hired to right the ship was fired last year.

From Partner to Competitor

MrBeast may remain somewhat insulated from these controversies, however, as Evolve primarily provides FDIC insurance and banking functions for Step. This arrangement—where fintechs manage the digital experience while regulated banks handle core financial services—is common and reflects the expanding open banking system at work.

At the same time, rapid technological change has pushed some fintechs from partners to competitors. Many leading platforms began as buy now, pay later or peer-to-peer payments services, then expanded into offerings that rival those of traditional banks.

While these platforms don’t always offer FDIC insurance, many younger consumers prioritize convenience and ease of use. This shift has made it more difficult for banks to build relationships in an increasingly crowded and fragmented landscape.

As banks, fintechs, and platforms compete for digitally native younger consumers, the influence of a trusted YouTube creator could prove meaningful.

The post YouTuber MrBeast Acquires Fintech Targeting Younger Consumers appeared first on PaymentsJournal.

The euro is the world’s second-largest reserve currency, though it still lags far behind the U.S. dollar. Many European Union leaders believe that a stronger global role for the euro would enhance regional stability and create more opportunities for member states.

In upcoming talks, EU leaders have laid out an ambitious agenda to elevate the euro’s international standing. This includes issuing euro-backed digital assets such as stablecoins, tokenized deposits, and a central bank digital currency (CBDC). Another priority is to expand euro-denominated lending, including joint issuance by multiple countries, and to that aid and loans provided to other regions are denominated in euros.

Leaders are also exploring the creation of a regional payments network to rival the infrastructure established by Visa and Mastercard within the EU.

Reaching a Crescendo

Calls for more euro-backed digital assets have intensified in recent years, as stablecoins from Circle and Tether now move trillions of U.S. dollars globally. Stablecoins have proliferated across  banks, retailers, and social media companies, with use cases continuing to expand.

While euro-backed stablecoins exist, they account for only a small fraction of the market. This has fueled calls for a digital euro, though the CBDC faces pushback from banks and lawmakers. Banks worry it could compete with their products, while some policymakers question its privacy and financial stability implications.

A Global Financial Force                                              

Beyond digital assets, the EU is working to strengthen its real-time payments systems. Efforts include integrating domestic mobile payments platforms under a single umbrella and connecting to real-time payment networks abroad.

To this end, the EU recently unveiled plans to connect its instant payments infrastructure with India’s UPI system, unlocking a significant global payments corridor. India and the EU also signed a landmark Free Trade Agreement, aligning the two economies in multiple areas, especially financial services.

Ultimately, these efforts aim to position the EU as a stronger global financial force—a challenging task given the established global positioning of U.S. stablecoins, card networks, and cross-border payment rails.

The post EU Leaders Consider Comprehensive Payments Plan for the Euro appeared first on PaymentsJournal.

The Bank of England is pursuing a public consultation on consumer payments, focused on making it easier for shoppers to pay without using a debit or credit card. The process could pave the way for a UK-based instant payments system akin to Brazil’s Pix or India’s UPI.

The announcement came during a speech by Sarah Breeden, the BoE’s Deputy Governor for Financial Stability. She cited Pix and Sweden’s Swish as examples of national systems that have succeeded by offering seamless mobile payments. “We want UK consumers to have the option to pay retailers in-store or online directly out of their bank accounts as a complement to doing so via card schemes,” Breeden said.

Setting Up Competition

Debit and credit cards currently account for nearly two-thirds of transactions in the UK. One reason Breeden gave for launching the consultation was the hope that greater competition could lower transaction fees for smaller retailers, which in the UK can pay up to four times more than large chain stores to accept card payments.

“The payment scheme would enable direct payments for consumers at the storefront, bypassing the card networks entirely,” said Ben Danner, Senior Analyst of Debit at Javelin Strategy & Research. “The goal is to lower cost for retailers on payment processing by sidestepping the networks, and ideally those retailers would pass on the savings to consumers.”

Retail payment systems would need to support multiple forms of money. Breeden emphasized that stablecoins—jointly regulated by the Bank of England and Financial Conduct Authority—are likely to be used for real-world payments, not just crypto transactions.

Slow on the Uptake

Still, given the popularity of credit cards in the UK, an open banking scheme may take longer to gain traction than it did in Brazil or India. Both countries entered the transition with far less mature payments infrastructures than the UK has today.

“Like anything in payments, there is going to be a period of growing awareness, adoption, and then ubiquity as it co-exists among all the other ways to pay,” said Danner. “As digital payments continue to grow, retailers will welcome the lower processing costs.

“However, I don’t expect some kind of mass exodus from traditional card products. Customers will need an incentive to switch to this system. Merchants can offer incentives to use the lower cost account-to-account method, such as a discount.”

The post Why the UK Is Exploring Instant Payments appeared first on PaymentsJournal.

While some may associate Alipay with China’s tremendously popular super app, its sister platform, Alipay+, is a merchant gateway with a rapidly expanding international reach.

As one of Ant International’s merchant platforms, Alipay+ played a crucial role in facilitating more than two billion cross-border payments last year, many of them originating in fast-growing markets like Southeast Asia, South Asia, the Middle East, and Latin America.

Altogether, Alipay+ connects to over 150 million merchants across more than 100 markets. That scale makes it is a significant development that India is considering linking its Unified Payments Interface (UPI) to the network. As the predominant real-time payments system in the world, UPI handles nearly half of global digital transactions.

Building on Dominance

Integrating with Alipay+ would make it easier for UPI’s roughly 400 million users to access instant payments while traveling abroad. This could significantly reduce the costs and settlement frictions that are commonplace in cross-border payments, while also helping keep users within the UPI ecosystem.

As UPI has become the most dominant real-time payments platform in the region, the Reserve Bank of India has aggressively looked for ways to expand the system. These efforts include raising transaction limits to enable higher-value purchases and linking the system to a credit card facilitated by Google Pay.

The Inevitable Expansion

Amid this growth, expansion beyond India’s borders seemed inevitable. Last year, UPI teamed with PayPal World, the fintech’s cross-border payments platform, in a deal that also included Alipay rival WeChat Pay.

However, one of the most intriguing developments for UPI has blossomed from the deepening relationship between India and the European Union. After a successful pilot, the European Central Bank announced plans to move forward with connecting its TARGET Instant Payment Settlement (TIPS) service to UPI.

Even more impactful is the newly established Free Trade Agreement between the EU and India. A central pillar of this landmark agreement is the creation of interoperability between the payments infrastructures of the two economies.

Taken together, these initiatives have transformed UPI from a purely domestic digital payments system into a significant cross-border payments player, with the potential to reshape what has long been a complex and inefficient process.

The post India Considers Integrating UPI with Alipay+ for Cross-Border Payments appeared first on PaymentsJournal.

After decades of discussions, India and the European Union have agreed to a landmark deal aimed at eliminating tariffs and taxes, integrating supply chains, and strengthening manufacturing capabilities across both regions.

Financial services is a key pillar of the Free Trade Agreement (FTA). As part of the deal, the two economies are working toward payments interoperability, including real-time, cross-border payments and remittances.

The overarching goal is to build a stable, long-term economic integration that benefits both sides. According to the Associated Press, trade between India and EU was relatively flat from 2024 to 2025, hovering around $136.5 billion. After the FTA, the two regions hope to boost trade to approximately $200 billion by 2030.

Calling for Stronger Infrastructure

Beyond the immediate opportunities for payments providers in both markets, the agreement allows each region to leverage the other’s strengths—most notably India’s leadership in real-time payments through its Unified Payments Interface (UPI).

The FTA builds on a prior agreement by the European Central Bank (ECB) to link its TARGET Instant Payment Settlement service with UPI. The newly inked deal also calls for broader collaboration on fintech initiatives, spanning compliance, artificial intelligence, and potentially even central bank digital currencies (CBDCs).

The digital euro has been debated for years, as EU member states weigh efficiency gains against potential privacy concerns. Recently, however, momentum has shifted, with the digital euro increasingly positioned as a cornerstone of EU payments autonomy.

ECB Executive Board Member Piero Cipollone has emphasized the need for a payments infrastructure built entirely on European technology. These calls have intensified amid the surging popularity of U.S. dollar-backed stablecoins and the expanding reach of Visa and Mastercard’s cross-border payments networks.

Responding to Entrenchment

Against this backdrop—alongside the continued entrenchment of U.S. technology and currency, and a more assertive U.S. trade stance in recent months—the FTA represents both a strategic response and opportunity. The agreement could have significant economic implications for nearly two billion people.

According to Indian Prime Minister Narendra Modi, trade between the two economies already accounts for roughly a quarter of the global gross domestic product and around a third of global trade.

The post Linking Payments Infrastructure Is a Key Component of India, EU Deal appeared first on PaymentsJournal.

As the leading U.S. peer-to-peer payments service, Zelle has become a staple offering for most financial institutions. Even so, the network found room to expand last year, onboarding 337 new institutions.

Nearly all of these new partners were community banks or credit unions managing less than $10 billion in assets. Collectively, these institutions serve a broad mix of customers, including farmers, small businesses, and underserved communities.

Alongside this expansion, Zelle also highlighted the growing range of use cases on its platform. Although the network was originally designed for P2P payments, consumers are increasingly using Zelle for everyday transactions, including recurring expenses like rent and utility payments.

Embedding the Platform

Since its launch in 2017, Zelle has continued to grow by leaps and bounds, driven in large part by its formidable backing. The organization is owned by Early Warning Services, a consortium of seven of the largest U.S. financial institutions, including JPMorgan Chase, Bank of America, and Wells Fargo.

Zelle was initially launched in response to the surging popularity of P2P apps like Venmo, PayPal, and Cash App. However, the network diverged from that model by jettisoning its app and instead embedding its service directly into financial institutions’ mobile and online banking platforms.

A Successful Model

That approach has proven successful. Through the first half of last year, , U.S. consumers and small businesses completed roughly two billion transactions on Zelle—representing a 19% year-over-year increase. Total transaction value rose by nearly 25%, reaching almost $600 billion. Small business payments were the platform’s fastest-growing segment, increasing by nearly a third year-over-year.

Despite this momentum, Zelle has faced notable challenges in recent years. One of the platform’s biggest benefits—near-real-time settlement—can also be a liability. Once a payment is sent, it is often irrevocable, leaving limited recourse for users who are defrauded into authorizing transactions.

As scams have become more widespread, Zelle has drawn scrutiny from the U.S. Consumer Financial Protection Bureau, as well as a lawsuit from New York State over fraud protections on the platform. The lawsuit alleged that Early Warning Services was aware of the network’s vulnerabilities but failed to adequately address them.

In response, Zelle has maintained that because users were tricked into sending money, there was no inherent flaw in the system itself. However, JPMorgan Chase recently updated Zelle’s terms of service to grant the institution greater authority to delay or cancel payments—especially those originating from social media—largely in response to mounting fraud concerns.

The post Zelle Expands to Include Community Banks and New Use Cases appeared first on PaymentsJournal.

Banks are no strangers to artificial intelligence. For years, machine learning and deep learning models have quietly powered fraud detection, transaction monitoring, and risk analysis. But the industry is now approaching a more consequential shift: agentic AI—systems that don’t just analyze data, but can act on it. With that shift comes a fundamental question about how much authority banks are prepared to give to machines.

Trust sits at the center of the debate. Is AI ready to be trusted with decisions that carry financial and regulatory consequences? That question was featured prominently in a recent conversation between Deepak Gupta, Chief Product Engineering and Delivery Officer at Volante, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research. And if the answer today is “not yet,” what needs to change for banks to get there?

Ways to Leverage AI

Across financial institutions, AI adoption is accelerating for a clear reason—efficiency. Internally, banks are under pressure to do more with fewer resources. AI is increasingly used to automate repetitive tasks, improve accuracy and consistency, reduce investigation backlogs, and bring greater predictability to operations that have been historically labor-intensive.

Externally, the focus shifts to customer impact. Banks are exploring how AI can lower operational costs for clients, reduce friction across payment flows, and strengthen compliance.

Some of the most compelling opportunities sit at the intersection of both. In payments operations and exception handling, AI can repair and enrich payment data, classify exceptions in real time, and route transactions to the right place. Machine learning models can identify fraud as it happens while reducing false positives.

Conversational AI adds another layer, enabling natural language queries such as “Why did this payment fail?” “Where did it get stuck?” “How was a similar issue resolved before?” Meanwhile, banks are applying AI to intelligent payment routing, liquidity optimization, and funding prediction—turning what were once reactive processes into proactive ones.

Cutting Down on Time

For the moment, the simplest answer is that AI reduces the amount of time required to perform certain tasks. This progress tends to happen in fits and starts, which makes the impact feel uneven—especially when AI affects only one part of a task or workflow. To understand the impact that ultimately shows up on the bottom line, it is important to take an end-to-end view.

The real benefit is not solving a specific problem, although that remains important. Understanding how AI is changing outcomes requires an end-to-end perspective across an entire domain or set of workflows.

“Our approach is learn to walk before you run, and run before you sprint,” said Gupta. “We are thinking of AI as an assistant to payment operations teams. Maybe in a couple of years, the confidence level increases, the predictability increases, and the algorithms gain more acceptance, to a stage where you might be able to say to a subset of your payment system: OK, go ahead and approve it automatically.”

How to Measure AI’s Success

The first area of impact is efficiency. For example, has the cost and effort required to process a payment been reduced? Given a fixed volume of payments handled by a single person, AI can enable a higher volume to be processed with the same headcount. In concrete terms, efficiency is reflected in the number of transactions processed per person before and after AI.

The second area is risk reduction, such as identifying and minimizing false positives or preventing compliance violations. The goal is to create business value, whether by lowering the cost per transaction or allowing customers to expand their revenue base.

Finally, there’s adoption. Even the best tool has no value if it’s not used.

Building Trust

Achieving widespread adoption depends on organizational trust in AI. Miller analogizes this to career ladders used to develop individuals over time, where capability and responsibility increase gradually.

“If you show up as a new hire, you get limits around the amount of damage you can do,” Miller said. “It might be that you can only approve things below a certain volume, or you can’t work with certain clients. We build guardrails around people to limit the amount of damage that their learning process can cause. As we think about how to measure the effectiveness of AI, we might have to actually return to that.”

“These guardrails are not because AI is dangerous,” he said. “It is because learning is a process that generates risk. AI has to prove that it’s trustworthy. If it can’t do that, there will be no adoption. But for trust to emerge, you have to start using it first.”

That trust has to be prevalent on both sides.

“When I get in my Tesla, I find it safer for Tesla to drive than myself, because I get distracted,” Gupta said. “I get a phone call or I’m looking at something else. But once I put the car on self-drive, I know it will stop itself at the right time. In fact, my family says when we go together, ‘Dad, why don’t you let the car drive itself? It drives better than you do.’

“The key is to take the risk to let the car drive itself first,” he said. “You can still be in control, but let the car drive itself. The same thing that should happen in payments: trust the new technologies, trust the new paradigms.”

Looking to the Future

One development already underway is the emergence of systems capable of taking action autonomously. Guardrails are not just controls—they form the foundation of trust, allowing leaders and operations teams to delegate more tasks to AI that can learn and adapt.

“Instead of delegating the workflows as they exist, you create the possibility of a world where the systems might reinvent the workflows on their own,” Miller said.

As AI continues to evolve, banks will not just respond to payments. They’ll anticipate them, becoming more proactive, efficient, and strategic in managing the flow of money.

“Payments will transition from largely a transactional back-office function to an intelligent continuously available capability,” Gupta said. “AI will enable banks to shift from reactive processing to proactive and predictive operations. When you go to FedEx, you don’t tell them which plane you want the package to go on. You just say when you want the package to get there and how much you’re willing to pay for it. And then voila, FedEx does the magic for you and says: OK, these are the options, which one do you want?

“Similarly, you shouldn’t have to figure out which payment is the cheapest option. Should I send it through RTP or FedNow? Just let the AI do that for you. AI will find the fastest and the cheapest path.”

The post When Can Payments Trust AI? appeared first on PaymentsJournal.

More than half of buy now, pay later users have missed a payment at some point—but the surprising twist? It’s often the high-income borrowers who are the biggest offenders.

An increasing number of BNPL users treating their loans like credit card bills, weighing the convenience against the risk of a late fee. According to data from Lending Tree, in the past year, 41% of respondents reported a late payment, up from 34% the previous year. Nearly a quarter of BNPL users have had three or more active BNPL loans at once—and again, high-income borrowers top the list.

The Same Playbook as Credit Cards

BNPL providers often tolerate late payments, as the fees can be profitable. But for users, this convenience comes with hidden risks.

“Nearly half of credit card users are revolving debt, meaning they couldn’t pay the full debt on time,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “A growing number of late fees indicates financial strain as households prioritize other areas of debt over BNPL loans. Any kind of late payment or failure to pay could cancel out any type of increase gained from taking out a loan with a vendor.”

“Late fees are a significant revenue driver for BNPL vendors,” he said. “As long as that money is eventually paid, it is not necessarily a bad indicator for the vendor. Many vendors are using proprietary underwriting standards, which may need to tighten. However, this goes against their marketing model, which suggests easy access to split payments.”

Confusion Over Credit Scores

Many users misunderstand how BNPL loans affect their credit score. Lending Tree found that more than 60% of users incorrectly believe that making on-time payments improves their credit. In reality, BNPL loans don’t always report to credit bureaus, meaning timely payments may not boost a credit score at all. For borrower, this creates a false sense of security and can contribute to larger financial strain over time.

“The CFPB calculated that late fees were around $10 on an average BNPL loan, not a disaster to the consumer budget,” said Danner. “But over time, they add up, and considering the potential hit to credit scores, the impact is alarming.”

The post Late BNPL Payments: A Problem for Borrowers, Not Lenders appeared first on PaymentsJournal.

In just over two years since its launch, the U.S. Federal Reserve’s FedNow real-time payments system has attracted participation from 1,600 financial institutions.

The service added 500 institutions over the course of last year alone, with more than 100 joining in Q4 2025. Currently, nearly all of the nation’s leading financial services companies now participate in FedNow.

This expanding footprint has driven measurable improvements across nearly every key metric for FedNow. The Federal Reserve reported that average daily transactions on the service reached almost 30,000 last year, while total transaction volume increased 460% year-over-year.

Alongside this volume growth, the total dollar value of FedNow transactions reached $853.4 billion last year, with an average payment size of $101,435—up significantly from $38.2 billion and $25,376, respectively, the prior year.

The Obligatory Comparison

As successful as FedNow has been, nearly every discussion of the network includes comparisons to the Clearing House’s RTP network. That’s because the two are the only players in the closely watched U.S. real-time payments space.

Although it was established in 2017 by a consortium of the largest U.S. banks, the RTP network has already been surpassed by FedNow in one key area: network participation. RTP currently has around 1,135 financial institutions on its network.

However, the RTP network still exceeds FedNow in payments value. The Clearing House recently reported processing more than $1.3 trillion in total payments in 2025. This may be partly due to RTP increasing its transaction cap from $1 million to $10 million last February, while FedNow did not raise its limits until September.

A Testament to Real-Time Payments

While comparisons between RTP and FedNow are inevitable, there is substantial overlap between the two services. For example, PNC Bank—a founding member of the Clearing House—was one of the last holdouts to finally join FedNow.

PNC emphasized, however, that its support for FedNow should not be interpreted as a lack of confidence in the RTP network. Rather, the growing participation in both networks by hundreds of banks and credit unions is a testament to the power of real-time payments and their potential to reshape the U.S. payments landscape.

The post With More Institutions on Board, FedNow Notches Volume and Value Gains appeared first on PaymentsJournal.

After nearly a decade of effort, Apple Pay finally plans to enter India’s digital payments market by the end of the year—one of the few major developed markets it has yet to penetrate. But the company faces an uphill battle, as its service will initially not connect with India’s massively popular UPI payments interface.

The launch will focus on card-based contactless payments, allowing iPhone users to tap and pay at stores, restaurants, fuel stations, and other points of sale. This offering is likely aimed at credit card users and international payments, targeting a more upscale customer base in a market where India’s share of global cross-border payments market is estimated at $300 billion.

Apple’s hardware business is already strong in India, recording its highest-ever quarterly shipments in Q3 2025 with 5 million units sold, accounting for roughly a fifth of its total iPhone sales.

Head-to-Head with UPI

However, UPI dominates India’s everyday digital payments, controlling 85% of all digital transactions. Apple will not initially pursue integration with UPI due to complex regulatory and technical hurdles, putting it behind competitors. Google Pay, for example, processes about 7 billion UPI transactions per month, second only to the PhonePe payments app, and recently launched a credit card in the region—another foothold Apple has yet to establish.

Outside the UPI ecosystem, digital payments are scarce and shrinking. RuPay, the card network run by the National Payments Corporation of India (NPCI), processed 1.2 billion transactions in 2023, falling to 938 million in 2024 and 664 million through November 2025.

Stumbling Blocks

Apple has eyed the Indian market since at least 2017, but bureaucratic and technical obstacles have consistently stood in the way.

India’s central bank requires data localization, meaning Apple must either build local data centers or partner with compliant Indian financial entities. Biometric identification, heavily regulated in India, has also posed challenges.

The post Apple Pay Plans India Launch, but Without UPI Integration appeared first on PaymentsJournal.

The over two billion consumers within Tencent and Alibaba’s ecosystems use these platforms to send messages, shop, and pay in a unified super app. Now, many of these users will be able to leverage the platforms’ AI agents for full-fledged agentic commerce.

For example, Alibaba has just unlocked full access to its e-commerce ecosystem for its Qwen AI agent. This means that if a consumer wants to order food or buy tickets, they can prompt Qwen with their desired item, and the AI agent will handle everything—including payment through Alibaba’s affiliate Alipay.

Previously, the Qwen chatbot was limited to providing recommendations in response to user prompts. Consumers still had to visit other platforms to complete their orders.

Developing the Moat

One of Alibaba’s goals in integrating agentic commerce is to increase user engagement and build a stronger competitive moat. Currently, Tencent’s WeChat holds a commanding position in China’s thriving super app market.

However, Tencent has also indicated that it is pursuing agentic commerce initiatives, and its chatbot Yuanbao could soon see similar upgrades as Qwen. What’s more, TikTok owner ByteDance has already upgraded its AI chatbot to handle certain tasks autonomously within the e-commerce segment of its Douyin app.

The Crucible for Agentic Commerce

This agentic commerce zeitgeist was sparked by Visa and Mastercard, who rolled out iterations of the service last year. Their launches prompted many of the largest U.S. tech players to either introduce agentic commerce platforms or begin building the necessary infrastructure.

Despite these foundational efforts, little headway was made in implementing true agentic commerce last year. This suggests that 2026 could be a crucible for a technology with both dynamic upsides and compelling concerns.

One frequently cited issue with agentic commerce is that, in regions like the U.S., services are splintered across different apps and companies. Super apps, however, could present agentic capabilities to consumers at scale. This makes the super apps from Alibaba, Tencent, and ByteDance compelling proving grounds for agentic commerce.

The post Tencent and Alibaba’s Super Apps Evolve with Agentic Commerce appeared first on PaymentsJournal.

Consumers increasingly value flexibility, a dynamic that has helped buy now, pay later products become a fixture in retail payments. A new feature from Klarna and Walmart-backed fintech OnePay adds a new wrinkle to the model.

The companies are teaming up to let OnePay customers convert debit card purchases into installment loans after a transaction has been completed. For example, a consumer who buys a new TV and later faces an unexpected medical expense could use the OnePay app to turn that transaction into a four-payment BNPL loan.

“Post-pay installment plans are nothing revolutionary, they’ve been a part of the card landscape for a while now,” said Ben Danner, Senior Credit and Commercial Analyst at Javelin Strategy & Research. “But we do know that cardholders seek flexibility in how they are able to pay, and this OnePay and Klarna partnership really captures the fervor around BNPL by offering it to customers after payment.”

“We’ve seen a lot of the big BNPL vendors getting into the territory of digital banking—offering debit cards and new ways to pay—and this partnership is an extension of that experience,” he said.

Exemplifying the Trend

Klarna illustrates the broader evolution underway in the sector. The company, which built its reputation as a BNPL provider, has since launched a debit card, applied for a U.S. bank charter, and expanded into peer-to-peer payments in Europe.

More broadly, Klarna has dipped its toes in a range of emerging payments, from agentic commerce integrations to plans for a proprietary stablecoin. This expansionary approach is not relegated to BNPL firms. Many leading fintechs have moved well beyond their anchor offerings. PayPal, for instance, has recently roll out products spanning cross-border payments, agentic shopping, and tax filing.

Playing to Strengths

Although open banking has yet to receive formal regulatory blessing in the U.S., the growing breadth of fintech portfolios suggests the model continues to thrive. Third-party financial services providers form key components of open banking infrastructure, and their growth is beginning to have downstream effects on traditional banks.

Consumers have become accustomed to fintech services that are purpose-built for digital use and generally easier to access than legacy alternatives. As more fintechs offer banking services, the traditional bank relationship anchored in the demand deposit account has come under pressure.

As fintechs continue to band together and broaden their offerings, financial institutions will need to play to their core strengths if they hope to maintain customer relationships.

The post Klarna and OnePay Test Post-Purchase BNPL Conversion Model appeared first on PaymentsJournal.

PayPal is introducing free federal and state tax filing for its debit card holders, allowing refunds to be deposited directly into user accounts. The move expands PayPal’s existing lineup and is intended to encourage broader engagement across the platform.

The service is a collaboration with april, a provider of white-label tax filing tools. Its AI-driven tax engine can pull relevant financial data directly from partner apps, simplifying the filing process, though it requires users to be comfortable sharing that data with PayPal.

Unlike some tax-filing platforms suchas TurboTax or H&R Block, PayPal’s offering is limited to self-guided filing and does not include access to tax professionals. Users are guided step-by-step through entering information, uploading documents, and filing electronically with the IRS. For tax-related questions, april offers an AI-powered chatbot for an additional fee.

Leveraging PayPal’s Tools

In addition to transferring money in and out of their PayPal accounts, customers can pay taxes using several flexible payment options and receive federal tax refunds through PayPal Direct Deposit.

“There are two things in play here,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “The big one is payments and deposits. When you file your taxes, you either need to pay or you get a refund. PayPal can build deposits by having consumers deposit their refund into their PayPal account. If the customer owes money, then PayPal offers ways to pay, like a short-term loan or BNPL pay-in-four arrangement.”

“The second thing is added utility,” he said. “This is another benefit of being a PayPal customer.”

Easing Privacy Concerns

PayPal has also applied for a bank charter, which would allow it to offer interest-bearing savings accounts. If approved, this could give tax filers a place to hold their refunds.

At the same time, a charter would bring additional regulatory requirements, limiting how customer data can be used for marketing and potentially easing some privacy concerns.  

“They may get key demographic data from the tax company like income strata, etc.” said Apgar. “But 100% it would not be personally identifiable information [PII].”

The post How PayPal’s New Tax Service Fits Into Its Overall Strategy appeared first on PaymentsJournal.

As more financial institutions deploy artificial intelligence for key functions such as credit assessments, a group of UK lawmakers has raised concerns that the industry may be unprepared to withstand a major AI-related incident.

The lawmakers recently advised the Financial Conduct Authority and the Bank of England to implement AI‑focused stress tests that could help financial services firms navigate potential issues originating from the technology.

The committee also called on the UK to take a more proactive stance in addressing these risks. For example, it recommended that the FCA publish guidance clarifying how consumer protection rules apply to AI, as well as the extent to which senior financial services managers are expected to understand the AI components embedded in their systems.

Flaws and Risks

According to the report, these measures are increasingly necessary given the substantial risks posed by AI. Flaws often present in this nascent technology could lead to inaccurate credit decisions, elevated fraud risks, and the spread of misinformation.

The report further highlighted the concentration risks associated with major AI models, which are largely facilitated by leading U.S.-based tech giants. These centralized systems could skew consumer decision-making and foster herd behavior in financial markets.

What’s more, UK lawmakers stated that the emergence of agentic AI—and the rush to embrace agentic commerce—has created a potential inflection point for financial institutions. This sentiment was echoed by Experian, which noted that merchants and financial institutions currently lack the tools to differentiate between legitimate AI agents and malicious bots.

The Current Conundrum

Despite these concerns, the dynamic benefits of AI ensures it will remain a priority for financial institutions.

Data from FIS shows that over three-quarters of business and technology leaders believe AI has strengthened their organization’s fraud detection and risk management capabilities. Roughly half of respondents also said their organizations plan to ramp up AI investments over the next two years.

At the same time, a Bank of England official recently underscored that the UK financial industry isn’t fully utilizing data analytics for fraud detection. This highlights the central dilemma facing many FIs: leaders must create strategies that maximize AI’s benefits while mitigating its inherent risks.

The post UK Regulators Voice Concerns About AI’s Role in Financial Services appeared first on PaymentsJournal.

Mobile payments are thriving in China, and now Visa cardholders will be able to add their cards to Apple Pay to make purchases at overseas merchants, both in-store and online.

Initially, this feature will be available only to consumers holding cards issued by some of China’s largest banks, including the Industrial and Commercial Bank of China, Bank of China, and Agricultural Bank of China. However, Visa is already planning to expand this capability to include cards issued by other institutions.

As a result, users in Mainland China will have another mobile payment option when traveling and shopping internationally. What’s more, Apple noted that Mastercard is preparing to launch similar cross-border functionality in Apple Pay.

Widespread Cultural Acceptance

Apple Pay is the leading mobile wallet in the U.S. by a substantial margin, with over 65.6 million users. This success is largely driven by the continued popularity of the iPhone in its home market.

While Apple has also led China’s smartphone market—until recently being edged out by Huawei—Apple Pay still accounts for only has a sliver of the country’s mobile wallet market, which is dominated by Ant Group’s Alipay and Tencent’s WeChat Pay.

These all-encompassing super apps each have user bases of approximately 1 billion users, driven in large part by China’s widespread cultural acceptance of mobile payments.

The Central Hub

Building on this success, both Alipay and WeChat Pay have expanded their service offerings and begun pushing beyond Mainland China. For example, Alipay+ is a merchant payment acceptance solution with reach across the Middle East and Latin America. Last year, Alipay+ supported roughly 2 billion cross-border payments for a customer base made up largely of small- to medium-sized businesses.

Ant International also noted that it is working to integrate with additional domestic payment systems—such as the mobile payments services in Thailand, Indonesia, and the Philippines—and to export the Alipay super app model to these regions.

Although mobile payments systems like Alipay, WeChat Pay, and Apple Pay are not often mentioned among the players poised to reimagine cross-border payments, they could ultimately serve as central hubs for international transactions, much as they already connect payments, identification documents, and even tickets within a single platform.

The post Visa Brings Cross-Border Apple Pay Transactions to China appeared first on PaymentsJournal.

There has been considerable fanfare surrounding the emergence of agentic commerce, followed by a race to build the supporting infrastructure. While there has been less hoopla accompanying biometric authentication and digital identification cards, there are lessons from the evolution of these technologies that can be applied to agentic commerce initiatives.

As Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research, notes in the 2026 Emerging Payments Trends report, one main commonality is that none of these technologies are close to achieving ubiquity. That said, this year will bring more frequent and tangible interactions with each of them for consumers, merchants, and financial institutions alike.

Face Pay for BBQ

The benefits of biometric authentication in payments are well established, including greater transaction security and reduced friction at checkout. As consumers have grown accustomed to fingerprint and facial recognition through everyday smartphone use, many have speculated that the widespread adoption of biometrics in retail payments is imminent.

While the underlying tech has existed for years and there have been notable implementations—most prominently Amazon’s pay-by-palm rollout in its physical stores—there is still a ways to go.

“In November, I published the first scorecard about biometric authentication providers at the point of sale, and the fundamental finding was that there was very little in this space that was actually in market,” Miller said. “But a number of these products planned to be available and suggested that they in fact had clients who would be launching in the U.S. in 2026.”

To date, adoption has largely been limited to pilots and trial runs within defined use cases. These range from iris-scanning programs tied to exclusive Visa cards to facial recognition systems used for venue entry and concessions at the New England Patriots’ Gillette Stadium.

This year, more of these pilots and trials are expected to move beyond experimentation and into broader, real-world deployment.

“Some people will get a chance to see it for real, and not just as a pilot somewhere in one place,” Miller said. “Last year I went to San Francisco, and I did a face pay in a pilot. But realistically, that’s one BBQ shop in one arena in one city in the United States. The point is that people will start to see this in the wild and not just in very controlled environments.”

“It’s not going to be commonplace, it’s not going to take over the world, but there will be people who do this, and that’s a step forward,” he said.

The Chicken and the Egg

As with biometrics, digital ID cards offer clear security advantages and can reduce friction in use cases such as airport queues or purchases that require age verification.

However, much like biometrics, the road to digital ID adoption has been rocky.

“The rollout of digital ID has been a classic case of uneven awareness and uneven availability,” Miller said. “Some states have had this for almost 10 years, and then other states still can’t get out of their own way. We’re reaching the point where it’s going to be more than half of states that offer it.”

“You had a chicken and the egg problem,” he said. “Why should merchants go to the trouble of building the infrastructure to accept digital IDs if nobody had digital IDs? Well, why should I get a digital ID if nobody’s going to accept it? It’s a classic problem, but the availability problem is mostly over. We can say with reasonable confidence that within a decade or so, every state is going to issue something.”

As adoption increases, merchants and financial institutions will gain greater confidence to invest further in acceptance technologies, both online and at physical points of sale.

As this infrastructure matures, innovators are likely to identify additional use cases for digital IDs. For example, financial institutions could integrate digital ID acceptance directly into customer onboarding flows. This approach could prove superior to the current paradigm, in which users take pictures of their identification documents and submit them for manual review.

“There will be mainstream visibility to this,” Miller said. “We’ll then start to see who is interested in adopting it. It’s still going to be a self-selected group of people. It’s not like we’re immediately going to go zero to 60 on digital IDs. This is where there’s more likely to be pushback—interestingly enough—than biometrics.”

“One of the reasons is that like almost all of the biometric implementations, it’s optional,” he said. “If you don’t want to do it, you don’t have to do it. The TSA does facial recognition, but if you don’t want to do it then that’s fine, we’ll do it this other way. It’s the same with Digital IDs, it’s going to grow; it’s going to be more visible.”

The First Encounter

Many of the challenges facing biometric authentication and digital ID adoption also apply to agentic commerce, where AI agents perform the lion’s share of a consumer’s shopping. While delegating purchases to AI agents offers clear benefits, many consumers may be reluctant to give them full autonomy over transactions.

What’s more, as with biometrics and digital IDs, users must first become aware of agentic commerce programs and then opt in. Early deployments will likely consist of pilots and trial runs in narrowly defined use cases, the results of which should be interpreted cautiously.

“Pilot participants are not always representative and in fact are probably anti-representative of consumers as a whole,” Miller said. “If you participated in a pilot, you’re already willing to try new things. That means that your feelings about it, your reactions to it, if you would use it again, all of those things—they’re just different than many other people’s.”

All of these factors—coupled with growing skepticism around AI’s accuracy—point to a more methodical rollout of agentic commerce than some reporting has suggested.

“Almost nothing was even remotely in production in 2025, which is an important call-out because people talked like it was happening and there were these huge growth waves,” Miller said. “No, false. That sets up 2026 to be the first encounter that many people across the entirety of agentic tech will have with the products, ranging from the consumers using them to the merchants accepting them to the payment processes interacting with them.”

“That is the trend of the year, which will be underwhelming for many people because this is where the kinks are being worked out and where the problems will in fact be surfaced,” he said. “That is a natural part of the development of emerging tools, but this is happening under a pretty bright glare.”

The post To Forecast Agentic Commerce Adoption, Look to Biometrics and Digital IDs appeared first on PaymentsJournal.

In many of the world’s fastest-growing economies, small- to medium-sized businesses (SMBs) rely on efficient cross-border payment solutions to thrive. While numerous options exist, Ant International’s platform is seeing significant growth.

The global payments giant supported more than 2 billion cross-border transactions in 2025, many originating from rapidly expanding markets like Southeast Asia, South Asia, the Middle East, and Latin America.

Overall, Ant International serves over 50 million merchants globally—most of them SMBs—through its Alipay+ and Antom platforms. These solutions allow merchants to accept a wide range of QR, mobile, and card payments. Ant International plans to further expand its presence in regions like the Middle East and Latin America.

Expanding the Super App

In addition to supporting cross-border payments, Alipay+ operates as a unified wallet gateway, connecting global merchants to a plethora of payment types. This platform should not to be confused with the Alipay consumer app, which, along with WeChat, dominates payments in China.

These super apps have evolved far beyond payments, becoming a one-stop shop for virtually all consumer needs. One of Ant International’s goals in expanding the Alipay+ gateway is to develop similar digital wallet and super app ecosystems in other markets. Alipay+ already integrates with many leading domestic mobile systems, such as Indonesia’s DANA and Thailand’s TrueMoney.

From Domestic Systems to Global Reach

As these technologies have streamlined global communications, demand for cross-border payments has accelerated. However, international transactions have long been plagued by challenges, including high fees, low visibility, and slow settlement times.

Connecting domestic mobile and real-time payments systems has been an oft-proposed solution for these issues. For example, the European Union recently unveiled plans to tie into India’s UPI real-time payments system for cross-border payments.

As a global payments ecosystem, Ant International is uniquely positioned to become a major player in the market. In addition to its mobile payments infrastructure, Ant International has developed a blockchain that could bring the efficiencies of digital assets to its platform.

Case in point: Ant International and HSBC recently partnered to pilot cross-border tokenized deposit transfers over the Swift network, leveraging Ant International’s blockchain.

The post Ant International Logged Over 2 Billion Cross-Border Payments Last Year appeared first on PaymentsJournal.

Buy now, pay later pioneer Klarna has launched peer-to-peer payments in 13 European countries, expanding its services as it moves closer to becoming a full-service digital bank. In a market already crowded with P2P apps, Klarna’s millions of existing users could give it a competitive edge.

For now, Klarna users can only send money to people who already have a Klarna account. However, the company plans to expand the feature to allow transfers to non-Klarna users and enable cross-border payments.

The service is designed to integrate with Klarna’s existing offerings. Transfers are sent from the user’s Klarna balance, and funds are only sent once the amount is confirmed and eligibility and security checks are completed.

A Full Range of Banking Services

As it expands its services, Klarna already holds a full banking license in the EU. It has yet to obtain similar status in the U.S., although it launched its IPO in September. The Klarna Card, its first debit card, has already reached 4 million sign-ups following its debut in July 2024.

“Klarna continues to signal that it wants to be more than just a BNPL provider,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & research. “They have launched debit cards, are now offering P2P services, and are driving customers to spend more and more time within their app.”

A Mature Market

P2P apps are more popular in the EU than in the U.S., driven by Europe’s greater acceptance of open banking. Most European countries offer several local P2P services, and in many markets, the sector has already matured. Bizum, for example—owned and operated by leading Spanish banks—dominates the P2P market in Spain, one of the 13 countries where Klarna’s service will be available.

This presents barriers for new entrants. Meta, for instance, spent eight years trying to establish its own P2P service in Europe before quietly shutting it down earlier this year. 

“It’s difficult to get people to switch away from a P2P method that they are already comfortable using,” said Danner. “It will be an uphill battle challenging a lot of major players already out there. However, millions are already using Klarna, and therefore this is really a product enhancement with little friction.”

The post Klarna Wades into a Crowded European P2P Market appeared first on PaymentsJournal.

Instant payments have gained rapid traction in Greece, and regulators are now moving to both increase the transaction limits and integrate the domestic IRIS payments system with other platforms across the European Union.

Under the new rules, consumers, freelancers, and sole proprietors will be able to transfer up to 1,000 euros (roughly $1,167) per day via IRIS, doubling the previous limit of 500 euros. Additionally, Greece will also introduce a monthly cap of 5,000 euros ($5,841) for peer-to-peer transfers. However, there is no monthly cap on payments made to businesses.

The objective of these enhancements is to grow IRIS’ market share and reduce dependence on card payments, which tend to settle more slowly and carry higher transaction fees. Regulators expect these changes to ease cost pressures on merchants and help stimulate the broader  economy.

A Common Theme

Demand for instant payments in Greece is already substantial. In the early weeks of December, real-time payments accounted for roughly 40% of transfers in the nation, far exceeding the average for instant payments usage in the Eurozone.

Greece has also become the first European country to achieve near-ubiquitous real-time payments acceptance at points of sale. This feat was driven in part by regulatory action, as the government recently mandated that all businesses support IRIS instant transactions.

Such mandates have been a common theme behind the emergence of many of the world’s leading real-time payments systems, including India’s UPI and Brazil’s Pix.

At Home and Abroad

Looking ahead, Greece is planning to further expand IRIS’ reach. Early this year, IRIS is expected to connect with other European instant payment systems through the EuroPA and EPI networks. The goal is to facilitate cross-border transfers, an area that has often presented challenges across the region.

The EuroPA alliance—a group of mobile payments leaders—has already partnered with banking consortium the European Payments Initiative (EPI) to explore interoperability across systems in 15 European countries. This initiative is largely centered on the Wero digital wallet, which is designed to function as a universal payments hub.

Ultimately, the goal is to allow EU consumers to pay using their preferred system—such as IRIS—both domestically and abroad.

The post Greece Ups Transaction Limits on IRIS Real-Time Payments System appeared first on PaymentsJournal.

Every day, financial institutions process trillions of dollars across dozens of payment rails. Yet when asked about innovation, most admit they’re stuck.

It’s not a technology problem. The tools exist. Cloud-native platforms. Real-time rails. AI-powered fraud detection. The issue is strategic paralysis.

“Banks are having to connect and deal with so much new technology right now that it’s a challenge for financial institutions to know where to go first,” said James Wester, Co-Head of Payments at Javelin Strategy & Research. “There’s almost a sense of vapor lock.”

The Modernization Trap

Call it analysis paralysis on steroids. Banks face simultaneous pressure from new payment types, mobile wallets, real-time rails, crypto integration, tightening regulations, and escalating fraud. Each priority feels urgent. None can wait. Yet most institutions remain frozen at the starting line.

New research from ACI Worldwide reveals the depth of the problem: 55% of organizations say technology remains underused in their operations despite billions invested in modernization. Three barriers dominate. Relentless cybersecurity demands that evolve faster than defenses. Crushing compliance burdens spanning multiple jurisdictions. Internal resistance from teams wary of disrupting systems that have worked for decades.

Consider a mid-sized regional bank with two million customers. They want to offer the FedNow^® Service for instant payments, but their wire transfer system runs on code from 2008. Their card processing sits on a different platform entirely. Adding real-time payments means either building custom integrations that take 18 months and cost $3 million, or replacing infrastructure that handles 500 million transactions annually. Either path carries massive risk. So they wait. And while they wait, their customers open accounts at digital banks that launched with real-time payments on day one.

“It’s not just about connecting to new rails, connecting to real-time payments, connecting to digital wallets,” Wester said. “It’s decisioning for fraud, credit, onboarding. All these things are going on at the same time.”

The result: institutions that know they must modernize but can’t determine the first step without triggering operational risk.

What Actually Works

Paralysis isn’t inevitable. Financial institutions breaking through share three strategic pillars.

First, executive ownership with a long-term vision. Payments can’t be relegated to IT. Organizations succeeding treat payments as board-level strategy with sustained C-suite sponsorship. When the CEO of a top-20 global bank tells the board that payments infrastructure is as critical as lending operations, budgets get approved and roadblocks disappear. Partial commitment produces partial results.

Second, capability and talent activation. Strategy without execution infrastructure means nothing. Leading institutions bridge that gap by developing internal talent while partnering strategically with vendors who close capability gaps. This isn’t about hiring an army of developers. It’s about having the right team to evaluate platforms, manage integrations, and own the roadmap.

Third, agility and future readiness. Static solutions fail in dynamic markets. The most resilient organizations build adaptable infrastructure that absorbs new payment types without disrupting existing operations. When a new rail launches or regulations shift, they adjust in weeks rather than quarters.

“From the bank’s own business standpoint, what it is they’re trying to accomplish and where do they need to go,” Wester said. “What’s the most important priority for the financial institution? That’s then where you inventory what we have in terms of systems, technology, people.”

The Orchestration Advantage

Legacy systems weren’t designed for the speed, flexibility, and variety today’s payments ecosystem demands. Built for predictable volumes on established rails, they’ve become integration nightmares requiring constant patches and workarounds.

Intelligent payment hubs take a fundamentally different approach.

Rather than forcing institutions into wholesale infrastructure replacement, modern platforms enable selective modernization. Banks can introduce new payment types and services without disrupting core operations. The technology handles integration complexity behind the scenes.

Payments orchestration extends this further. By dynamically selecting optimal payment channels based on transaction type, cost, fraud risk, and regulatory requirements, orchestration delivers what legacy systems can’t: unified decision-making across fragmented infrastructure. A $50,000 wire transfer to Germany gets routed through Swift with enhanced compliance screening. A $12 peer-to-peer payment uses RTP. A recurring subscription runs through ACH. The platform makes these decisions in milliseconds based on business rules the bank controls.

ACI Worldwide’s platforms, including the recently launched ACI Connetic, exemplify this approach. ACI Connetic unifies account-to-account payments, card processing, and AI-powered fraud prevention on a single cloud-native platform. For the first time, banks can consolidate siloed systems without rip-and-replace implementations.

“One of the big things they offer is they help close those gaps where financial institutions may be coming from legacy technology,” Wester said. “It’s finding those vendors that now sell modern payment platforms that are modular, that are cloud-native, that operate around modern principles.”

The value proposition extends beyond technology. Modern platforms reduce integration time from months to weeks. Cloud provisioning delivers resilience, scalability, and cost advantages impossible with on-premises infrastructure. Modular architecture enables rapid deployment of new capabilities without touching core systems.

The Business Case Problem

For all its logic, modernization faces a measurement challenge. Quantifying the cost of inaction proves difficult until it’s too late.

“Sometimes it’s a bit difficult to make business cases for these investments because you don’t know sometimes what you don’t have,” Wester said. “You realize that you’re bleeding customers, that your attrition rate is high because consumers don’t have access to real-time payments, or they don’t have access to real-time balance information.”

This creates a dangerous lag. By the time customer attrition becomes obvious, competitors have already captured market share. Digital-native fintechs don’t suffer from legacy constraints. Neo-banks launch with modern architecture from day one. Traditional institutions trying to catch up face steeper hills.

The solution: reframe modernization as revenue enablement rather than cost avoidance. Modern platforms don’t just reduce operational friction. They unlock new products, faster time-to-market, and differentiated customer experiences that drive growth.

ACI processes more than $7 trillion daily across platforms serving 19 of the world’s top 20 banks and 11 central bank infrastructures. That scale provides visibility into what separates leaders from laggards. Institutions treating payments as strategic assets rather than back-office plumbing consistently outperform peers in revenue growth and customer retention.

Breaking the Logjam

The payments modernization challenge isn’t getting easier. Real-time payments adoption accelerates globally. Digital wallet usage grows exponentially. Regulatory complexity increases. Fraud sophistication rises. Customer expectations for instant, seamless transactions become universal.

Institutions waiting for certainty before modernizing will discover certainty arrives too late. Markets reward those who move decisively with imperfect information over those who wait for perfect information that never comes.

The path forward requires honest assessment. Start with business priorities, not technology. Inventory current capabilities against where the market is headed in 24 months, not where it is today. Identify the gaps that create competitive vulnerability. Then partner with vendors who offer modern, modular platforms designed for continuous evolution rather than periodic replacement.

Most importantly, accept that payments modernization isn’t a project with a completion date. It’s an operational discipline. The institutions thriving in payments today treat infrastructure the way they treat risk management: as an ongoing strategic function requiring constant attention, not a one-time fix.

“That gets you to where you need to be just to start looking forward,” Wester said.

The alternative: continued paralysis while competitors modernize, which carries consequences no institution can afford.

Download this report now: Payments in Transition: Leadership in an Era of Transformation.

Editor’s Note: ACI Worldwide processes billions of transactions daily, moving trillions of dollars for banks, merchants, and billers across 90+ countries. Its platforms include ACI Connetic, a unified cloud-native payments hub, and ACI Enterprise Payments Platform, serving the world’s largest financial institutions.

The post The $7 Trillion Bottleneck: Why Banks Are Paralyzed by Payments Innovation appeared first on PaymentsJournal.

One of Africa’s largest payments processors, Flutterwave, is acquiring API-driven fintech Mono, a move that could reshape how lenders assess creditworthiness in the absence of standardized credit scores.

Mono has made a splash since it was founded five years ago, and its APIs connect a significant portion of Nigeria’s digital banking system. For its part, Flutterwave facilitates domestic and cross-border payments across more than 30 African countries. The acquisition will expand both the reach and the breadth of services offered by the two companies.

This open-banking-based partnership could have particularly meaningful implications in Africa, where consumers lack standardized credit scores. The limited scope of many credit bureaus in these markets means lenders are often forced to rely on banks’ transaction histories to evaluate creditworthiness.

A Critical Juncture

The combined infrastructure of Flutterwave and Mono could improve access to borrowers’ banking data at a critical juncture. According to Mono’s CEO Abdulhamid Hassan, Africa is undergoing a transitional period in which regulators are increasingly promoting lending initiatives that will drive financial inclusion.

These inclusion efforts not only create new opportunities for consumers, but also unlock significant potential for banks and businesses. Research from Galileo found that roughly half of global financial leaders surveyed reported their organizations had lost 10% or more in potential business due to absence of truly inclusive technology.

The Inevitable Adoption

Open banking technology—especially APIs offered by third-party providers—is at the heart of this transformation. Due to the eclectic financial infrastructures across the world, open banking has gained traction at varying rates.

However, the flexibility, security, and inclusion benefits of open banking make its widespread adoption inevitable.

“The idea of having open access via APIs to data and to accounts—that’s not going to go away,” James Wester, Co-Head of Payments at Javelin Strategy & Research told PaymentsJournal. “It may change based upon the way regulations are crafted and the way the market develops, but at its core, that open-banking paradigm where you and I have access to our bank account and to the data—that’s going to continue. Customers want that, small business customers want it, and commercial clients want it.”

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The modernization of banks’ technology stacks, to this point, have only been the initial steps in a larger process. The adoption of real-time payments has shown how risk, compliance, and customer experience need to catch up to the instant payment environment. Even less visible functions like treasury services are being touched by modernization. These changes are blurring the lines between platforms and processes as accountability continues to shift among banks, tech vendors, fintech partners, and third-party providers.

The 2026 Tech and Infrastructure Trends report from Javelin Strategy & Research looks at how these trends will play out over the coming year and beyond. Complicating matters is the arrival of artificial intelligence, which could play a key role in how payment technologies evolve.

Moving Past Legacy Technology

Bank modernization exists along a spectrum. Some have already added capabilities for products like real-time payments and instant fraud detection. At the other end, many banks still using their legacy cores have cobbled together solutions through middleware that allows them to offer these capabilities, but not in the most efficient or best way.

The biggest bottleneck for most banks is legacy technology. If they have not yet made progress in modernizing their systems, they will have issues.

Legacy cores still work in many ways because many payments, in the macro sense, still do not need to be processed instantly. It doesn’t necessarily matter to a typical retail customer if the bank offers instant settlement or instant authentication; they just care that their bill is being paid.

Batch processing allowed banks to methodically look through transactions for fraud and other risks, which made mitigating and remedying such issues much easier. But the era of instant payments created a disconnect. A small business prefers to pay its suppliers as late as possible, and to do that the business will want to do it instantly. If the bank’s core can’t handle that, it is likely to make the solution the institution does put together a little more clunky or more difficult to handle.

Different Risks for Different Banks

This scenario presents different risks for different types of banks. Bigger banks have the financial resources and highly skilled personnel capable of adding these capabilities and staying on the leading edge of next-generation payment technology.

“Look at a bank like JPMorgan, which has always stayed one step ahead,” said Matthew Gaughan, Payments Analyst at Javelin and a co-author of the report. “Now they’re trying to emulate the fintechs through having their own developer portal, working with blockchain technology, trying to stay one step ahead and build a foundation for future payment technology. The bigger banks have an easier time being proactive and figuring out what makes sense for them, which technologies they want to implement, and also are able to hire the talent to do so.”

On the flip side, smaller banks don’t have as much money and may not have the ability to pull in the necessary talent. There is also a big group in the middle made up of banks that are able to utilize core banking providers and process payments as well. Fintechs like Fiserv and Jack Henry are rolling out more modern payment platforms that have real-time payments and an infrastructure more capable of orchestrating these payments, so these small and mid-sized banks do have access to these services.

Taking Responsibility for Fraud

Real-time payments also mean real-time fraud, and banks will need to be able to manage both. Agentic commerce complicates matters by opening up new vectors for bad actors to use the same technology to their advantage. It is still unclear how that risk will be assigned.

“If you’re still relying on batch processing, you’re obviously not going to be able to offer real-time payments,” Gaughan said. “But your fraud tools and capabilities are probably also lacking and would not able to properly monitor and mitigate fraudulent activity happening in real time. That makes it harder to remedy these situations.”

Who takes responsibility in an increasingly fragmented payment environment? Companies like OpenAI, Mastercard, and Visa have established agentic payment protocols that do the legwork for the banks, but does that make them ultimately responsible for the success of the payment?

OpenAI’s agentic commerce protocol shows how the new landscape might work. Co-developed with Stripe, it essentially acts as a shared language among the AI agent, the merchant, and the bank. All that transaction information is used to create a payment token. The merchant processes the payment in the typical manner, using its payment service provider.

In the end, OpenAI is providing the plumbing in that shared language and not necessarily doing anything directly with the payment. That has created a gray area around who’s responsible for fraud or errors.

“Banks have their own APIs that they’re opening up to third-party developers,” Gaughan said. “The bank is processing the payment, but it’s happening on this fintech’s platform or this technology company’s platform. Who’s responsible for making the customer whole? All these things are opening up these new questions, and we’re still in the early stages of figuring it out.”

Opportunities for Treasury Services

For banks seeking to modernize their treasury services, the challenge is that much of the data and processes for such services remain siloed. There may be a possibility for AI to be used in this process, but centralizing the data in those processes is the foremost concern. So much of the more modern technology relies on such data, which means it needs to be accessible, readable, and digestible. That will allow banks to automate different treasury processes and solutions.

“Treasury services solutions are almost a perfect fit for things like large language models, because they provide very clear processes,” Gaughan said. “It’s not as overly complicated as some other parts of the payment landscape. They are data-centric, rules-based, and fairly consistent, and that’s just the type of information that a third party or proprietary LLM would thrive on. A business owner who wants historical data on accounts receivable days could quickly visualize it as a chart, for example. That’s crucial information for merchant clients who are looking to see what where their liquidity is at or maybe better optimize their cash conversion cycle and keep more of that money for themselves for longer.”

Certainly, artificial intelligence will have an impact on all parts of the payment process. One aspect that still lies in the future is the potential for bad actors to game the system, perhaps by creating fraudulent bots that can complete transactions.

As Gaughan said, “It’s an interesting time.”

The post The Trends That Will Modernize Payments Technology in 2026 appeared first on PaymentsJournal.

Mobile wallet payments in Australia have grown 23-fold over the past six years, according to the Australian Banking Association. During this digital transformation, concerns have emerged that a significant portion of the population may be left behind.

Alongside the rise of digital wallets, online banking has become the norm in Australia. As a result, the number of bank branches fell by roughly half between 2011 and 2024, and many bank-owned, fee-free ATMs have disappeared.

However, around 1.5 million Australians still rely on cash for around 80% of their transactions. Many in this group are older adults, rural residents, or people with disabilities—raising concerns that these vulnerable populations are increasingly cut off from the digital economy.

Keeping Cash in Play

This type of exclusion is not unique to Australia. In the U.S., approximately 4.5% of households lack access to banking services and continue to rely heavily on cash. This reality prompted the introduction of the Payment Choice Act, a bipartisan legislative effort to keep cash in circulation.

The federal law would require businesses that accept in-person payments at brick-and-mortar locations to accept cash for transactions up to $500. Additionally, retailers would be prohibited from charging cash-paying customers higher prices.

Beyond these stipulations, the bill’s sponsors asserted that the U.S. dollar is the nation’s legal tender, and all U.S. businesses should accept it. 

Taking It a Step Further

A similar law was proposed at the state level in Ohio, including a mandate that merchants accept up to $500 in cash. However, Ohio’s version includes provisions designed to allay the burdens of accepting cash on businesses, such as allowing each store to maintain just one payment terminal register for cash transactions.

Australia is rolling out its own regulations, mandating that all essential service providers accept cash starting January 1, 2026, although small businesses are exempt from this requirement. While these mandates aim to protect consumers, they can be difficult to enforce if a merchant deigns to ignore them.

This is partly why Australia has considered taking further measures. For example, it has been suggested that the federal government could categorize banking as an essential service to ensure more physical banking options, or even establish a publicly owned bank to serve the unbanked population.

The post Amid Digital Payments Surge, Australians Raise Concerns About Cash Access appeared first on PaymentsJournal.

Despite macroeconomic concerns, the holidays are still a priority for consumers. Early data from Visa shows that U.S. holiday retail spending rose 4.2% year-over-year, excluding inflation.

The report is based on payments activity tracked from early November and excludes automotive, gas, and restaurant spending. While in-store purchases still account for nearly three-quarters of holiday spending, e-commerce emerged as the primary driver of growth.

Artificial intelligence also played a role in the online shopping boom. Visa found that roughly half of surveyed consumers said they planned to use AI tools for comparison shopping and to help narrow down gift choices.

“It’s good news that holiday sales are up over 4% and e-commerce sales largely drove that by growing almost 8%,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Certainly, AI is playing a role in this growth by making it easier to search for products with less-defined input.”

“So-called agentic search uses AI to discern meaning and intent from user search requests, rather than just matching on key words,” he said. “Because agentic search can deliver more accurate context-aware results, users are more likely to follow through with purchasing one of the suggested items.”

Picking It Up Today

It’s important to distinguish between agentic search—where AI agents help users discover products or services—and full-fledged agentic commerce.

For example, a recent agentic search partnership between PayPal and AI platform Perplexity allows users to consult an agent and complete purchases within a chat interference, but the final decision remains with the shopper.

This trend is prompting many merchants to rethink their strategies, though it doesn’t diminish the importance of the brick-and-mortar experience.

“While there’s no question that agentic search is giving e-commerce a boost, what’s notable in all of this is that physical retail still accounted for almost 75% of total retail spending this holiday season, according to Visa’s research,” Apgar said. “While agentic search can only discover results on the web, this underscores the importance of omnichannel alignment for retailers.”

“In-store inventory and buying options need to be available for agentic search engines so the consumer still gets meaningful results when they add ‘that I can pick up today’ to the end of their search query,” he said.

The Agentic Holidays

Despite these dynamic shifts, the retail sector is still far from true agentic commerce, in which AI agents independently handle most or all aspects of a transaction with minimal user involvement.

While agentic commerce has yet to gain the same level of adoption as agentic search, Visa expects that to change. The company said it already completed hundreds of AI-driven transactions through trials of its Intelligent Commerce program and anticipates that millions of consumers will rely on AI agents as personal shoppers during next year’s holiday season.

The post Holiday Shopping Soars, Driven by AI and E-Commerce appeared first on PaymentsJournal.

India’s United Payments Interface (UPI) continues not only to dominate the payments landscape but to grow at a relentless pace. As new players attempt to enter the market, however, concerns are emerging that UPI may be crowding out other payment modes—such as credit cards—potentially stifling innovation and limiting consumer choice.

Still less than a decade old, UPI is rapidly closing in on half a billion users. It processed 59.3 billion transactions in Q3, up from about 44.4 billion in Q3 2024. It has also overtaken Visa to become the world’s largest real-time payments system, handling around 640 million transactions per day, compared with Visa’s 639 million.

The strongest growth has come from merchant payments, which rose 35% year over year to 37.46 billion transactions. Peer-to-peer transactions also expanded, increasing by 29% over the same period.

Other Methods Are Slipping

Other payment rails have struggled amid UPI’s rise. Transactions on RuPay, the card network run by the National Payments Corporation of India (NPCI), have been declining steadily. In 2023, RuPay processed 1.2 billion transactions, but that figure fell to 938 million in 2024 and to 664 million swipes through November 2025.

UPI’s popular QR code payments are increasingly taking share from card swipes, once the dominant form of digital payment in India. Active UPI QR codes grew 21% over the past year. These codes replace traditional card-swiping machines, bringing millions of small merchants into the digital payments ecosystem.

Although India has a population of more than 1.4 billion, fewer than 50 million people currently hold a credit card, suggesting strong potential for growth. Even here, however, the momentum appears to be slowing. According to data from CareEdge, credit card spending in India rose 23% year over year in September 2025, down slightly from the 24% growth recorded in September 2024.

Debit card usage, meanwhile, has fallen sharply. According to the RBI, debit card transactions declined from roughly 5 million in 2019 to about 1.7 million in 2024.

Competitors Arise

Competitors are still attempting to penetrate the market. Google Pay has introduced its own digital credit card, Flex, while remaining deeply integrated with UPI, having processed about 7.2 billion UPI transactions in October.

Similarly, IndiGo, India’s largest domestic airline, introduced a co-branded credit card tied to its loyalty program through partnerships with Kotak Mahindra Bank and IDFC First Bank. It became the first major Indian airline to do so.

Better Options for Merchants

The Immediate Payment System (IMPS), an Indian inter-bank fund transfer mechanism, is also losing traction, with transactions falling to 368 million in November from 407 million a year earlier.

“UPI is growing and taking transaction volume away from the legacy IMPS network based on its better user interface,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Perhaps more importantly, UPI is free for merchants right now, meaning there are no merchant discount fees. Merchants are likely to be actively promoting UPI as their preferred payment option for customers.”

How Long Can the Government Prop Up UPI?

The Indian government has aggressively promoted UPI adoption over the past decade. In addition to keeping merchant costs low or nonexistent, it has even considered offering consumer incentives, such as discounts for paying via UPI rather than credit cards, which typically carry merchant fees of around 2%. The absence of fees is one reason Google is exploring credit products, which offer higher revenue per transaction.

RBI has also announced plans to raise UPI transaction limits, opening the system to more business-to-business payments. Previously, merchant transactions were capped at roughly $1,162, forcing users to split larger purchases or turn to alternative payment methods. Recently, the NCPI was granted the authority to lift limits on both person-to-person and merchant UPI payments.

The question now is how long RBI will continue to offering incentives for a system that has already proven to be wildly successful.

“The central bank of India is still subsidizing UPI through this growth phase, but local payments experts acknowledge that’s not sustainable,” Apgar said. “At some point a merchant discount fee will become part of UPI.”

The post Is UPI’s Rapid Growth Squeezing India’s Payments Market? appeared first on PaymentsJournal.

UK regulators floated the idea of removing the current £100 transaction limit for contactless payments with physical cards earlier this year. Now, the UK is moving forward with these plans, allowing financial services providers to set their own payment thresholds—or remove them entirely.

These limits were established by the Financial Conduct Authority (FCA) and currently apply only to physical cards, which have not only had transaction caps but often required four-digit PIN authorization. The elimination of both the cap and the PIN requirement is scheduled for March 2026.

In setting the transaction caps, the FCA aims to respond to evolving consumer expectations and the impacts of inflation. Removing both the limits and the PIN requirement could also reduce friction at checkout, enhancing convenience and potentially driving economic growth—a longstanding goal for the region’s leaders.

The Overarching Strategy

As part of its broader economic strategy, the UK recently unveiled plans to launch a licensing program that could reduce the regulatory red tape that has hindered many fintechs. Fintechs play a crucial role in the modern financial services landscape, and this program would allow them to accelerate progress toward full authorization.

There have also been calls from UK leaders to modernize the country’s approach to dynamic technologies, such as cryptocurrencies, and to better harness the potential of artificial intelligence in the financial services sector.

Stepping Up Protections

Amid these efforts, contactless payments have become a staple in the UK. A significant portion of these transactions are conducted via mobile phones. A recent study by UK Finance found that more than half of UK adults surveyed now use mobile wallets for both online and in-store purchases.

Currently, there are no transaction caps for payments made via mobile phones, as these devices typically include built-in security features like PINs or biometric authentication.

Cards, in contrast, do not have these inherent defenses, which is one reason transaction limits were implemented in the UK. Nevertheless, consumers are still protected, as card issuers will reimburse funds in case of fraudulent use.

The FCA also anticipates that removing transaction caps will encourage financial services companies to enhance their own fraud protections measures.

The post UK Scraps Transaction Caps on Contactless Card Payments appeared first on PaymentsJournal.

Not long after India’s Unified Payments Interface (UPI) launched a feature enabling users to approve payments with a fingerprint or facial scan, Amazon Pay rolled out its own support for biometric authentication.

Previously, consumers were required to enter a PIN to authorize transactions. Under the new feature, UPI now allows transactions of up to ₹5,000 (approximately $56) to be approved using biometric verification. The functionality is available across a wide range of payment use cases, including peer-to-peer (P2P) payments and merchant transactions.

Amazon Pay highlighted the friction-reducing benefits of biometrics and noted strong early adoption, with over 90% of eligible users opting to use biometric authentication for P2P payments.

The company also emphasized that biometric authentication offers enhanced fraud protection, as credentials are tied to a specific device and cannot be shared. Additionally, facial or fingerprint scans can be performed with one hand, which could help speed up checkout lines  for smaller transactions.

The Rising Role

As more users have become accustomed to using biometric authentication to perform actions on their phones, expectations have grown that biometrics will play a larger role in payments.

However, broader adoption has faced several challenges—most notably, the lack of widely deployed infrastructure to accept biometric payments in many regions. Additionally, consumers must be made aware of these programs and choose to opt in. In markets like the U.S., the dominance of card payments means many users have not recognized a compelling value proposition for adopting biometrics.

All these factors explain why there have been few large-scale implementations of biometrics in payments worldwide, despite a rising number of pilot programs and proof-of-concept projects.

A Global Force

This is why the UPI launch represents a watershed for biometric authentication in payments. UPI processes roughly 20 billion transactions per month, and its owner, the National Payments Corporation of India, handles nearly half of the world’s digital transactions.

The real-time payments system has become a global payments force in just seven years and continues to expand its reach. This rapid growth is one of the reasons Amazon has invested heavily in its Amazon Pay platform in India.

While the wallet currently holds only a fraction of the market share compared with leaders PhonePE and Google Pay, Amazon Pay’s biometric launch is a milestone for real-world biometrics applications that could provide a blueprint for further adoption.

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After the initial buzz around agentic commerce, skeptics questioned whether artificial intelligence agents would ever gain real traction in retail. Yet developments suggest that hesitation may be premature.

Most recently, Visa completed hundreds of AI-driven transactions in pilots of its Intelligent Commerce program and expects rapid consumer adoption of the technology.

The goal of agentic commerce is to take the heavy lifting out of shopping for consumers, enabling agents to perform complex purchases with minimal prompting.

Visa highlighted research showing that roughly 47% of U.S. shoppers currently use AI tools for at least one shopping task, such as product recommendations or price comparisons. From there, the payments giant extrapolated that the AI-powered e-commerce environment could drive millions of consumers to task AI agents with completing purchases by next year’s holiday season.

It remains to be seen whether agentic commerce will gain that much traction so quickly, but momentum is clearly building around the concept. Data from Javelin Strategy & Research indicates that among consumers who have yet used agentic AI tools, 40% may be willing to trust them.

“That’s evidence that they are willing,” Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research told PaymentsJournal. “Will they use it over time? Will they fully change their behavior? We don’t know. But our data suggests that 40% of those people would be willing to expand their usage.”

“Sometimes when you run surveys like these, you see a substantial portion with a categorical unwillingness to use the technology for some reason, whether it’s lack of comfort or distrust of the companies providing it or whatever,” he said. “If we have at this point a high degree of willingness even among those who have not yet used, I think that suggests that there’s room to grow.”

Keeping on Task

While AI has undoubtedly permeated many aspects of the retail experience, there are still challenges to the widespread adoption of agentic commerce. One of the main concerns is ensuring that AI agents carry out instructions accurately and to the user’s satisfaction.

“Merchants, payment processors, and card issuers are all going to think about this in terms of liability and consumers are going to think about it in terms of experience,” Miller told PaymentsJournal. “If they have an experience that doesn’t meet their expectations, that has implications for the growth of this ecosystem.”

“If a consumer doesn’t believe that they’re going to get what they want by delegating authority to choose or to purchase some piece of software that we’re calling an agent right now, they might not use the agent,” he said. “That’s a fundamental limiter on growth here.”

Misinterpretation by the agent or unclear instructions from the user can increase the likelihood of transaction disputes in agentic commerce, especially during its early stages.

Safeguarding the Agents

There are also concerns about the security of agentic transactions, both from error and potential fraud. Organizations face the dual challenge of detecting fraudulent activity while minimizing false positives in this emerging ecosystem.

“We should be expecting situations where criminals are creating fake websites and apps that offer a similar service,” Suzanne Sando, Lead Fraud Management Analyst told PaymentsJournal. “They’re going to try and convince consumers to sign up for what they think is a legitimate agent service and then in turn, they will be giving up a whole host of PII and payment information and data for this particular scam.”

“On top of that, we should be expecting a surge in text and email scams from fraudsters that are impersonating legitimate agent services,” she said. “Not only do we have to worry about fake services, but now we’re worried about the use of generative AI that has already made impersonation scams easy for criminals to commit. I don’t think it’s at all far-fetched to assume that agentic commerce will be affected as well.”

To safeguard these transactions, financial services companies like Visa, Google, and Klarna have launched protocols designed to keep AI agents on task and protected from harm.

Ready to Serve

Questions have also arisen regarding whether demand for agentic commerce is substantial enough to justify the extensive investment the technology has received.

Both Visa and Mastercard have launched agentic commerce platforms that quickly expanded to additional use cases and markets. For example, Visa has worked with more than 100 partners in pilots of its Intelligent Commerce platform and plans to launch pilot programs for Intelligent Commerce in Asia and Europe next year, alongside other global initiatives.

This suggests that more AI agents will be ready to serve consumers next year, whether consumers are fully prepared or not.

“Skepticism is warranted, but this is happening,” James Wester, Co-Head of Payments at Javelin Strategy & Research, told PaymentsJournal. “If we are saying, ‘I can’t imagine why somebody would do something,’ that shows the limits of our imagination, not the limits of where this is going to go.”

“Approaching this with an open mind and understanding that there is going to be an entire industry of developers, systems integrators, and folks that are going to be aimed at this (is important),” he said. “It’s understanding that this is bigger and important, and we need to understand that in the context of our entire industry, as opposed to just saying this seems like a lot of hype.”

The post Will Agentic Commerce Break Through Next Year? appeared first on PaymentsJournal.

Cross-border payments are entering a new phase, where traditional rails meet digital asset innovation. In a major step forward, Ant International and HSBC have teamed up to pilot tokenized deposit transfers over the Swift network using the ISO 20022 protocol.

ISO 20022 is a messaging standard that allows organizations to exchange significantly larger payments data than current standards allow. Although ISO 20022 has existed for decades, this pilot marks the first time the protocol and the Swift network have been used together to send tokenized deposits across borders.

In the initial trial, Ant International’s blockchain was integrated with HSBC’s tokenized deposit service to complete a transfer between Singapore and Hong Kong.

Struggling to Overcome Complexity

The Swift network has connected financial institutions around the world. While it has played an integral role in making the cross-border payments model more efficient, international transactions continue to face significant issues.

Historically, cross-border payments have relied on the correspondent banking model, in which each bank establishes partnerships with foreign institutions, creating an intricate web of intermediaries. This complicated structure often leads to delays, high transaction fees, and limited transparency.

Despite coordinated efforts by various organizations to improve international payment systems, there have been less-than-stellar results. According to a recent progress report from the Financial Stability Board (FSB), key performance indicators for cross-border payments have shown only marginal improvement over the past two years.

FSB identified two major challenges: the complexity of coordinating across different regions and the persistent hurdles that arise from outdated, legacy payment infrastructures.

A Proponent of the Standard

These challenges are among the reasons why Swift, along with others, has been a strong proponent of ISO 20022 as a messaging standard. The format’s data capabilities can make cross-border payments more efficient by reducing manual interventions and their associated costs.

When a cross-border payment is delayed, financial institutions often must embark on extensive investigations to determine the root cause. Swift recently noted that delayed payments cost financial institutions more than $1.6 billion annually due to these investigations, which can take days to resolve.

Beyond reducing delays and costs in the cross-border payments system, ISO 20022 also gives financial services companies insights they can leverage to identify fraud and money laundering activities. This is why the U.S. Federal Reserve recently transitioned its Fedwire Funds Service to ISO 20022. After longtime use of the format, Swift has now officially mandated ISO 20022 as the standard for cross-border payments on its network.

Underpinning Payments

Swift has been pushing to streamline its operations through digital asset technologies.

The network said it’s creating a blockchain to underpin its transactions. In a collaborative effort with 30 global financial institutions, Swift said it would develop a shared digital ledger that is interoperable with blockchains supporting stablecoins, tokenized deposits, and central bank digital currency transactions.

The platform is designed to serve as a secure, real-time record of bank transactions, leveraging smart contract capabilities to enforce compliance. Swift’s goal is to enable real-time cross-border payments.

The Rise of Tokenized Deposits

Although this blockchain may still be in its early stages, Swift’s collaboration with Ant International and HSBC could add powerful capabilities to its already formidable network.

Stablecoins may be the digital asset du jour, but tokenized deposits have been gaining substantial traction. Stablecoins are issued by private or public entities and backed by reserves managed by those organizations.

Tokenized deposits, by contrast, are digital representations of bank deposits held by regulated institutions. Therefore, they are backed by FDIC insurance and are often better suited for use by highly regulated financial institutions.

The use cases for tokenized deposits—including cross-border payments—have attracted interest from financial services players as diverse as Citigroup and the Bank of England. BNY Mellon, the world’s largest custodian by assets, has also explored using tokenized deposits to enable institutional clients to make blockchain-based payments.

“The use cases for a company like BNY are many,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research told PaymentsJournal. “There’s the potential for automation on unlocking liquidity once certain obligations and conditions are met, and for 24/7 cash sweeps that reduce intraday borrowing or overdraft risk. Tokenized deposits could reduce failed-trade risk in fund redemptions due to instant settlement. They have the potential to be programmable coupon or dividend disbursements. Repo transactions and clearing are a huge part of banks operations, so this could reduce the timelines and move collateral instantly.”

The post Ant International and HSBC Pilot Cross-Border Tokenized Deposit Transfers on Swift appeared first on PaymentsJournal.

As consumers move abroad, many still need reliable ways to send money back home. To this end, an integration between Mastercard Move and Tencent’s cross-border payments solution marks a significant step for those sending remittances to China.

The partnership will enable digital remittances to Weixin Pay, the mobile payment platform within China’s Weixin ecosystem. This opens access to cross-border transfers for more than 1.4 billion users of Weixin and WeChat.

Since Mastercard Move currently connects to roughly 10 billion financial services endpoints worldwide, senders can take advantage of a vast global network. Funds can be delivered either to Weixin Pay wallet balances or to bank cards linked to the mobile wallet.

Searching for a Solution

Sending money across borders has traditionally been a convoluted process involving multiple intermediaries, often making it costly and time-consuming.

Many solutions have been proposed to address the pain points of cross-border payments. Digital assets—particularly stablecoins—are frequently highlighted because they can enable immediate, low-cost transactions that settle on secure and transparent blockchains.

However, stablecoins have faced pushback due to their heavy reliance on the U.S. dollar. This is one reason European lawmakers have shown a preference for a central bank digital currency, such as the digital euro, over privately issued stablecoins. What’s more, there are concerns that the rise of stablecoins has weakened some emerging market currencies, as users often prefer the relative stability of the U.S. dollar over their domestic currency.

The Market Remains Fragmented

All these issues mean that an overarching, global payment type is unlikely to emerge anytime soon. Instead, more solutions have taken the approach of interlinking domestic payments systems. For example, PayPal recently launched its cross-border payments arm, which connects with both WeChat Pay and India’s Unified Payment Interface (UPI).

Mastercard Move, along with Visa Direct, have also forged significant connections with many financial institutions and platforms across their ever-expanding networks. These platforms function as a supercharged version of the correspondent banking system, where banks can perform nearly real-time, secure, and transparent cross-border payments.

While connecting local digital payment systems is an important step toward improving cross-border remittances and payments, the market remains fragmented. For instance, the Mastercard Move and Tencent integration is notable, but WeChat Pay represents around half of China’s market; the other half is dominated by Ant Group’s Alipay.

The post Mastercard Links with Tencent for Cross-Border Remittances in China appeared first on PaymentsJournal.

Fintechs play a pivotal role in the financial services landscape, yet many existing regulatory frameworks were not designed with them in mind. For this reason, the UK is set to launch a licensing program aimed at reducing the red tape that has hindered many fintechs.

Under this program, financial services companies will be able to conduct certain regulated activities under a provisional license for up to 18 months while they working toward full authorization.

The new framework responds to criticism from UK fintechs over the time and expense required to secure a full license. At the same time, easing these requirements is part of a broader initiative by UK regulators to boost economic growth.

Expanding Fintech Access

Calls for better regulation of disruptive financial technologies aren’t relegated to the UK. U.S. Federal Reserve Governor Christopher Waller recently posited that payment services companies should be able to obtain a limited account with the Fed.

Traditionally, master accounts that access Federal Reserve services have been restricted to licensed banks. However, Waller’s proposed “skinny” master account could allow fintechs to access these services directly. This could eliminate a pain point for many U.S. fintechs that currently rely on licensed banks’ master accounts to conduct their payment services.

A Growing Acknowledgement

These regulatory proposals and initiatives reflect a growing recognition among regulators worldwide that fintechs are critical to the modern financial services industry. Third-party financial service providers are the building blocks of the open banking system, which is gaining global traction.

These fintechs enable customers to control their data while allowing financial institutions to deliver innovative products. While open banking has achieved faster adoption in the UK than in the U.S., the model is steadily advancing worldwide.

“The idea of having open access via APIs to data and to accounts—that’s not going to go away,” James Wester, Co-Head of Payments at Javelin Strategy & Research told PaymentsJournal. “It may change based upon the way regulations are crafted and the way the market develops, but at its core, that open-banking paradigm where you and I have access to our bank account and to the data—that’s going to continue. Customers want that, small business customers want it, and commercial clients want it.”

The post UK to Launch Fast-Track Licensing for Fintechs appeared first on PaymentsJournal.

The humble demand deposit account has been the cornerstone of the financial services system for decades. However, banking customers who manage all their finances through checking and savings accounts at a single financial institution are in short supply.

At the same time, more fintech companies have transformed from niche, one-off services to full-service financial ecosystems.

As James Wester, Co-Head of Payments at Javelin Strategy & Research, detailed in the 2026 Debit Payments Trends report along with Javelin Analyst/Content Specialist Craig Lancaster, the emergence of open banking, coupled with novel payment rails, has created an environment in which financial institutions must adjust their long-held strategies to stay at the forefront of their customers’ financial lives.

Accounts Under Threat

Open banking has gained significant traction in many of the world’s leading economies. However, the well-established U.S. financial infrastructure and a market-driven approach by its regulators have hindered the growth of a formalized system of open banking.

Although there may be some debate about how and when the final product will appear, U.S. open banking is inevitable.

“The idea of having open access via APIs to data and to accounts—that’s not going to go away,” Wester said. “It may change based upon the way regulations are crafted and the way the market develops, but at its core, that open-banking paradigm where you and I have access to our bank account and to the data—that’s going to continue. Customers want that, small business customers want it, and commercial clients want it.”

This demand for open banking has been driven, in large part, by the functionality and efficiency that fintech companies have delivered. Although the established banking paradigm isn’t likely to be replaced anytime soon, the traditional banking relationship is no longer an integral part of how many consumers interact with the economy.

For example, the traditional peer-to-peer model consisted of a consumer bank account linked to a P2P service like Venmo or Cash App. Now, fintechs like Venmo offer accounts with debit cards that can operate independently. Although many of these P2P companies don’t offer FDIC insurance, that may not be a dealbreaker for customers who are focused on convenience.

Although this trend may not be novel, it is accelerating. This means that the conventional bank account, and more important the customer relationship, has been jeopardized.

“As open banking has made financial services more modular for the retail consumer—the ability to have accounts that you pay out of, accounts that you save into, accounts that you pay friends out of, accounts that you pay bills out of, maybe accounts that you shop with—having all of that and that ability to immediately access that through open-banking standards means that the core DDA, that core relationship you have with your primary financial institution, is under threat,” Wester said.

Reintroducing Friction

Along with these new players, the debit landscape has been disrupted by the emergence of real-time payment rails. Instant rails like FedNow and the RTP network have gained traction in the United States, and the benefits of real-time settlement have become increasingly evident.

However, faster payments create a set of challenges that U.S. financial services providers must address.

“Traditionally, the idea of friction is that it is a bad thing in payments,” Wester said. “What we’re beginning to see, though, is that friction had some benefit. When you have batch processing—where all the transactions are batched together and cleared and settled overnight or over a couple of days—what it allows you to do is flag any suspicious transactions, fraud, accidental transactions, or mistakes.

“When you’re talking real-time gross settlement, it is immediately pulled from your account; it’s settled in real time. What we’re beginning to see is that as real-time payments mature, fraud exceptions are able to flow through the system just as quickly as real-time settlement.”

Because many financial institutions don’t yet have the proper fraud management tools to flag exceptions in real time, tension is rising between the growth of real-time payments and the need for customer protections.

This tension is likely to exacerbate as real-time payments take precedence in retail situations. Financial institutions could be forced to reintroduce friction points to ensure that consumers are fully protected.

Ripe for Exploitation

However, along with the challenges that arise from emerging payment rails, opportunities are also blooming. One of the main debit trends is that more financial institutions are likely to be involved in payouts.

Payouts from commercial and government entities have typically been conducted through the ACH protocol, but many debit rails have begun to gain traction in these use cases. For example, an organization could use Visa Direct or Mastercard Move to push money directly into a recipient’s bank account.

“The implications are big for ACH,” Wester said. “ACH does allow for certain faster settlement, but direct debit just puts money in consumers’ accounts quicker, and that’s what consumers want. Especially when you’re talking about things like insurance payouts when there’s been a disaster, people want their money.”

Because the payout market is substantial, more financial services companies are considering these services. This could cause a marked shift in the way financial institutions view debit products.

“It doesn’t mean ACH goes away, but it does mean there’s a significant pool of transaction volume that can go over those direct-debit rails,” Wester said. “I think that if banks are aware of that and start pushing for that—because they make more money off of that—then that’s an area that’s ripe for exploitation by banks. I think that’s going to be an interesting thing that happens over the next probably 12 to 24 months.”

Playing to Strengths

This dynamic landscape means financial institutions must adjust to ensure they meet customers’ expectations. While regulatory decisions may dictate some of these changes, open banking is about much more than a data-sharing standard.

Customers increasingly desire a connection with their bank. In the past, many financial institutions have taken the tack that consumers need their bank more than the bank needs them. Accordingly, many institutions have given less attention to less profitable accounts.

However, as consumers have been offered more options, the balance of power has shifted.

“Financial institutions need to do better at working to see customers over time,” Wester said. “In other words, lifetime value—recognizing that the consumers that stay with you, grow with you, and that their profitability grows as well. They start going from being just a simple DDA where they pay bills to credit cards, to car loans, to mortgages, and to 401(k)s.”

Banks shouldn’t gauge customers’ profitability based on a single moment in time but should instead seek to predict how a customer will grow, then proactively offer solutions.

“If I have my account through Venmo, Venmo doesn’t really have the ability to provide me with a car loan or a mortgage or a 401(k),” Wester said. “What banks need to do is play to that strength of being a core part of overall financial health, as opposed to just being a place that provides an account that is FDIC-insured and allows them to pay bills.”

Fighting for Deposits

As part of this mindset modification, many financial institutions will have to adjust how they view debit rails. The demand deposit account has long been the fundamental building block of financial health, and debit products have been largely unchanged for decades. This is no longer the case, as more consumers are opting out of the traditional bank account.

“It’s no longer, ‘I have money; I put it in the bank, and the bank is how I do all of my financial services,’” Wester said. “It’s now, ‘I have money; I put it where I want it to go; I can access it however I want—through a device, through my computer, through my phone. I’m more reliant on different interconnections than I am on a financial institution.’

“That could have some profound impacts on banks because they depend upon those deposits to be able to provide loans. What will accelerate that even more is as we start looking at things like stablecoins, deposit tokens, and crypto, and as people begin to pull their money out and put it into things like that for whatever reason. As those use cases develop, that’s going to have some profound impacts on financial institutions. They’re going to have to fight harder for those deposits.”

The post Open Banking Has Begun to Intrude on Banks’ Customer Relationships appeared first on PaymentsJournal.

After more than a decade of war and sanctions that left the nation’s financial system largely frozen, Visa will begin operations in Syria, working with the Syrian Central Bank to help establish a modernized payments ecosystem.

Visa stated that its initial efforts will involve collaborating with licensed financial institutions to develop a secure payments foundation. This includes introducing payment cards with global standards such as EMV chips, enabling digital wallets, and supporting tokenization.

For merchants, Visa will assist in enabling acceptance methods like tap-to-phone and QR codes. The aim is to develop an accessible payment network through the Visa Acceptance Platform that maintains low costs and fosters open acceptance. These capabilities are expected to be particularly useful for micro, small, and medium-sized businesses, which make up a sizable share of Syria’s economy.

A Clean Slate

Visa also plans to support targeted programs for local entrepreneurs working to build and scale new payment processes. These initiatives will connect local innovators with broader network of regional and global fintech partners.

“Syria can leapfrog decades of legacy infrastructure development and immediately adopt the secure, open platforms that power modern commerce,” said Leila Serhan, Visa’s Senior Vice President, for North Africa, Levant and Pakistan.

Rebounding from War and Sanctions

President Bashar al-Assad’s crackdown on anti-government protests in 2011 prompted sweeping sanctions from Western states, including measures against the central bank. The sanctions, paired with the effects of the conflict, damaged key elements of the country’s infrastructure and industrial base, reducing the economy to less than a third of its 2011 value. As a result, banks in the region became largely isolated from the global financial system.

Following Assad’s removal from office last year, both the U.S. and European governments eased their economic restrictions on Syria. Recently, the International Monetary Fund announced it would provide technical assistance on financial sector regulation and help rehabilitate the country’s payment and banking systems.

Syria is now moving to catch up broader developments in the Middle East. Last year, the BRICS economic alliance expanded to include Egypt, Iran, Saudi Arabia, and the United Arab Emirates, aiming to deepen economic cooperation and extend cross-border payment capabilities across member countries.

The post Visa to Build a Payments Ecosystem in Syria appeared first on PaymentsJournal.

As payments have evolved from cash and checks to cards and digital payments, something essential has been lost: the human touch. Yet consumers are not data points—they crave a payments experience that is fast, secure, and effortless, and when they do need support, they want it to shift seamlessly into something personalized and attentive to their needs. 

In a recent PaymentsJournal podcast, Robyn Burkinshaw, CEO and Founder at BlytzPay, and Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research, discussed the current gaps in the payments landscape, what an ideal model for more human transactions could look like, and how organizations can start to speak their customers’ language. 

From Clicks to Conversations 

Digital payments have reshaped the way people move money, bringing new speed and convenience to everyday transactions. Still, even with these advances, friction persists—from the hassle of repeated app downloads to layers of authentication that slow down the process. Too often, the very tools designed to simplify payments end up complicating them or leaving certain customers behind altogether. 

“When we’re thinking about the technology that we’re building, we’re thinking about a bank box, and you either fit in the box or you don’t fit in the box,” Burkinshaw said. “Between 70% to 75% of the population fit in that and it’s easy for them to transact, but 25% of the population doesn’t fit in that. The unbanked and underbanked community doesn’t fit in that box.” 

“If I’m in person at the grocery store, the checker doesn’t care if I’ve got $50 of my $100 bill in cash and $50 on a card,” she said. “But that has not expanded outside that bank box in the digital experience in a way that meets people where they are.” 

Making payments conversational means giving consumers greater flexibility in how they transact. When adopted at scale, this model fosters an open ecosystem where all consumers—regardless of background or socioeconomic status—can access a payment experience that is both convenient and inclusive. 

While some organizations have made their payment experiences more conversational than others, there is substantial room for improvement across the board—especially among traditionally rigid institutions such as government agencies and utility providers. 

“I made a tax payment using a bill pay service and that tax payment was wrong by a penny,” Miller said. “The result was that that entire payment was returned to me and $0 of it was credited against the tax bill—and that’s good for no one.” 

“You can imagine if you are a landlord or an auto dealer, if someone sends you almost all of the money that you want to get from them, you’d like to be able to take that and then have a conversation about whatever the remainder is,” he said. “A system that isn’t flexible enough to handle situations like that is one that’s missing opportunities to improve outcomes.” 

AI and Common Sense 

Payments challenges like these can take a real toll on customer relationships, especially as consumers increasingly expect transactions to be immediate, intuitive, and personalized.  

“Consumers want control of their money,” Burkinshaw said. “It doesn’t matter if I make $100 or $1 million a month, I want control over where my money goes and how it’s transacting. We’ve gone from personalized relationships at the bank to digital relationships where there’s no engagement and there’s no interaction. I believe—especially in bill pay—we need to bring it back somewhere in the center where there is digital communication for convenience.” 

It’s important for organizations to remember that every payment represents a person on the other end—someone who wants their needs to be acknowledged.  

Yet, as many companies have become more tech-centric, that human connection has started to fade. The rise of artificial intelligence has only intensified worries about dehumanization, with many fearing that automation will come at the expense of empathy. 

But when used thoughtfully, AI can actually strengthen—not replace—human connection. As part of a two-way, human-centric approach, it can help organizations customize their messages and move beyond the impersonal, one-size-fits-all push notification.  

“The best AI is AI that is invisible,” Burkinshaw said. “People are thinking about AI as the end. AI isn’t the end, it’s a means to an end. It’s got to be paired with common sense; it’s got to be paired with critical thinking; but it also has to be paired with automation.” 

“The cool thing about AI is it gives you the ability to wrap your arms around huge swaths of data, pull that data in, make it consumable, and then make it actionable,” she said. “If I’ve got data for the sake of data inside businesses, I have to understand what my KPIs are, what moves my business. Then I have to apply technology, AI included, in bite-sized pieces so that I can grab the things that are going to be effective to my business and make those changes.” 

Payments in Flux 

The more effectively an organization can analyze data and align insights with its objectives, the greater potential for success. In financial services, payments data—even from declined transactions—offers a wealth of valuable information. 

“What happens today, especially in the subprime markets, is you take those declines, we throw the declines in a bucket and then we throw it at our collections department to go figure out what’s going on,” Burkinshaw said. “AI, in my opinion, gives the ability to be able to take tedious amounts of data and make it consumable in a way that can be effective when it comes to businesses.” 

Understanding the trends behind these payments will be critical in a rapidly shifting environment. For example, recent changes to the credit card interchange fee model, prompted by merchants’ lawsuit against Visa and MasterCard, could change the paradigm for many shoppers.  

Such changes may have an outsized impact on unbanked and underbanked communities, who often rely on payment methods that merchants may not always accept. These groups have already been affected by the decline of cash as a payment option, further widening the divide between the banked and unbanked.  

Taken together, these factors suggest that more alternative payment methods are likely to emerge to better serve these communities. 

Multilingual and Culturally Aware 

The landscape also presents a significant opportunity for financial institutions, though these organizations may need to adapt their strategies.  

Consumers are multilingual and come from diverse cultures and belief systems. There are substantial benefits for organizations that recognize these differences and adopt a conversational approach to payments. 

This model can lead to higher collection rates, reduced call volumes, and stronger customer relationships. When technologies like AI are integrated effectively, it can also deliver operational efficiencies. 

“The upsides are very clear,” Miller said. “If you think about the ability of a system to be able to speak in multiple languages and support folks, that’s a substantial advance over the requirement that you, for example, hire 10 people with 10 language skills to be able to provide that same level of service. It’s an important conversation, but any of these conversations have to involve not just the technology buyer and the technology seller, but the end user in an ongoing dialogue.” 

To engage in meaningful dialogues that keep customers connected, organizations will increasingly need to speak the customer’s language—literally and figuratively. 

“One of the things to emphasize is the need for bilingual communications,” Burkinshaw said. “If English isn’t my first language—or if English is my first language and I’m in a place where English isn’t the predominant language—we want our consumers to feel respected, connected, and valued.” 

“We want to reach them in a language that’s convenient for them, especially when we’re when we’re talking about bill pay and we’re talking about the four to six bills that consumers are going to pay on a recurring basis,” she said. “Meet them where they are, address their needs, and do it in a way that’s not only convenient, but makes them feel like they’re a person.” 

The post Conversational Payments: The Next Big Shift in Financial Services   appeared first on PaymentsJournal.

As buy now, pay later services become more widely used, Democratic officials at both the federal and state levels are pushing for stronger oversight—filling the gap once covered by the Consumer Financial Protection Bureau.

Seven Democratic senators have sent letters to major BNPL providers, seeking detailed information on their lending practices and urging them to report relevant data to credit agencies. Similarly, seven Democratic state attorneys general have requested explanations of how BNPL companies evaluate a consumer’s ability to repay, along with details on billing practices, late fees, and dispute procedures.

Their concern is that BNPL users may already be financially overextended when they on additional loans. One letter to Klarna, for example, cites data showing that consumers with a BNPL loan carried, on average, $871 more in credit card debt during the month of origination than comparable consumers who did not use BNPL.

Seeking More Disclosure

Under the Biden administration, the CFPB proposed applying the Truth in Lending Act to BNPL companies, which would make them subject to the same disclosure requirements as credit card issuers. The Trump administration rescinded that rule earlier this year.

Some BNPL providers are already doing at least part of what lawmakers are requesting. Affirm took the lead in providing data to credit bureaus earlier this year. A joint study between Affirm and Experian found that the effects of BNPL on credit scores were negligible overall—and when there were impacts, they were often positive.

“Providing the necessary data and demonstrating that their practices are just another credit option that isn’t causing significant financial harm to consumers could garner favor from regulators,” said Ben Danner, Senior Credit and Commercial Analyst at Javelin Strategy & Research. “But it’s a gamble of how one will interpret the data. If one goes into the analysis with an expectation that BNPL is already causing significant harm, I’d expect them to leave with that conclusion.”

Growing in Popularity

The investigation comes as BNPL continues to grow in popularity. As noted by the lawmakers, half of all U.S. consumers have used BNPL plans, and about a quarter of BNPL users have had three or more such loans at the same time.

According to the consumer analytics firm CivicScience, 38% of shoppers used BNPL services over the recent Black Friday weekend, with most of those users being younger and lower-income consumers.

The post Democratic Lawmakers Drill Down on BNPL Practices appeared first on PaymentsJournal.

A record-setting Black Friday was fueled by a sharp rise in consumers using agentic AI, which steered shoppers toward both sale items and higher-end products.

According to Adobe Analytics, which tracks more than one trillion visits to U.S. retail websites, consumers spent $11.8 billion online on Black Friday, up from $10.8 billion in 2024. Between 10 a.m. and 2 p.m., online shoppers were reportedly spending $12.5 million every minute.

Adobe also noted that AI-driven visits to shopping sites rose more than 800% from last year. Consumers weren’t just using AI tools to find deals and compare products—shoppers who arrived on a site via an AI assistant were 38% more likely to complete a purchase.

Separate data from Salesforce estimated that AI assistants and digital agents contributed $14.2 billion of the $79 billion spent online worldwide on Black Friday. Of that, about $3 billion was spent in the U.S.

Altogether, these numbers reflect the accelerating shift toward online holiday shopping. According to Mastercard SpendingPulse, U.S. retail sales on Black Friday rose 10.4% for online purchases but just 1.7% for in-store sales. 

Focus on Specific Stores

One of the most significant ways consumers are using new AI shopping tools is to uncover the biggest discounts. AI tools from Walmart and Amazon focus on making it easier for shoppers to seek out sales items with minimal effort. According to Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, agentic AI may ultimately have the biggest impact on retailers that integrate these tools directly into their purchasing experience.

“The delivery of these artificial intelligence tools could come from a few stores, like Amazon and Walmart and Target,” Miller said. “It is unlikely that some single tool will actually know everything about you, will be able to handle all of the types of choices that you would have, and would actually be good at it.”

More Discounts, More Luxury Items

Whether shoppers relied on AI to guide their holiday buying or simply used traditional methods, it’s clear they were hunting for deals—and in many cases, willing to splurge. According to Adobe, several categories saw unusually steep Black Friday markdowns. Toy discounts peaked at 30% off list price, with electronics and apparel seeing similar reductions.

Adobe also reported that consumers are spending more on high-end items this season. AI isn’t just helping people find the best price—it’s helping them determine the best value. The share of units sold surged in premium categories, with electronics and sporting goods both rising more than 50%.

The post Agentic AI Turned a Corner on Black Friday appeared first on PaymentsJournal.

After highlighting the ongoing challenges in cross-border payments, the European Central Bank (ECB) is taking steps to link its instant payments system with India’s Unified Payments Interface (UPI).

This integration was first proposed months ago, and after positive results from an exploratory study last month, the ECB is now moving forward with the realization phase to interconnect the Eurosystem’s TARGET Instant Payment Settlement (TIPS) service with India’s payments giant.

The ECB is also exploring the possibility of linking TIPS with Nexus Global Payments—a network born from Project Nexus, an initiative established by central bank consortium Bank for International Settlements (BIS). Nexus Global Payments connects payments systems across South and Southeast Asia, including India, Malaysia, Thailand, Singapore, and the Philippines.

These connections, along with a potential integration with Swiss National Bank’s Swiss Interbank Clearing Instant Payments (SIC IP) system, are part of an overarching strategy to simplify cross-border payments and remittances for European consumers and businesses.

Falling Short of Goals

Earlier this year, a member of the ECB’s executive board underscored the high costs of cross-border payments in the region, even as IT and telecommunications expenses have declined.

For example, a small business owner needing to send a payment to a supplier outside the EU’s Single Euro Payments Area (SEPA) often faces costs roughly 10 to 12 times higher than payments made within SEPA.

Separately, a progress report from the Financial Stability Board (FSB) found that G20 nations have fallen short of achieving the goals they set for improving cross-border payments. The FSB cited challenges including the complexity of coordinating payments across countries and the limitations of legacy payment infrastructure.

Staying at the Forefront

As more real-time payments systems have emerged, interlinking these systems could offer a powerful solution. This approach would reduce costs, increase speed and visibility, and prevent payment service providers from having to engage with multiple payment systems or a series of correspondent banks.

Other solutions for cross-border payments have also been proposed, including networks established by SWIFT, Visa, and Mastercard. Stablecoins have been suggested as another option, though there has been some pushback in the EU because these tokens are largely backed by U.S. dollars.

Conversely, integrating TIPS with a system like UPI could help maintain the euro’s prominence in international transactions. UPI handles the largest real-time payment transaction volumes globally, and India is among the top 10 recipients of euro remittances.

The post EU Plans to Link Its Real-Time Payments System with UPI appeared first on PaymentsJournal.

Peru plans to implement a real-time digital payments system based on India’s UPI sometime next year. Notably, Peru chose not to model its system after Pix, the highly successful payment platform adopted by neighboring Brazil. That choice may have less to do with South American politics or financial strategy and more to do with India’s aggressive promotion of its own technology.

The new system will stem from a partnership announced in 2024 between India’s NPCI International Payments Limited (NIPL) and the Central Reserve Bank of Peru (BCRP). In recent years, India has worked with countries such as France, Singapore, and the UAE to enable UPI-based payments using its underlying infrastructure. NIPL has also held discussions with several other nations in South America and Africa to help them develop similar systems modeled on UPI.

Meanwhile, the Central Bank of Brazil has been exploring global opportunities for Pix. At 2024’s G20, the central bank highlighted efforts to allow Pix to interact with foreign platforms, with Italy expressing interest in a bilateral agreement. That same year, Spanish payment processor Wipay opened Europe’s first Pix outlet at Barcelona-El Prat airport.

India Wins Out

UPI continues to be the global leader in instant payments, and NPCI has expanded to the point where it now handles almost half of the world’s digital transactions—driven primarily by the UPI platform. It has also secured partnerships with leading payments players such as Google and PayPal.

Another advantage for UPI is its comprehensive initiative to bring more consumers in India into the digital payments mainstream. This includes not only expanding smartphone-based services but also offering adjacent products like basic insurance. Peru may view UPI not just as a payments layer but as a potential catalyst for broader economic transformation.

Ripe for Growth

South America is emerging as a ripe landscape for payments growth, even apart from the exemplar of Brazil’s Pix. According to 2024 data from Beyond Borders, seven in 10 Latin American adults have made or received digital payments—up from just four in 10 a decade ago.

At the same time, cash usage in the region has declined. Mastercard research across seven countries in Central and South America found that only 15% of respondents rely on cash for more than 75% of their monthly expenses, down from 25% before the pandemic. Nearly all small businesses in the region now accept at least one form of digital payment. 

The post Peru’s Instant Payment System Will Rely on India’s UPI appeared first on PaymentsJournal.

The launch of agentic commerce platforms like Mastercard’s Agent Pay represents a new phase in how artificial intelligence is integrated into the shopping experience. Still, agentic commerce is far from ubiquitous, and Mastercard is now moving forward with plans to pilot Agent Pay in the UAE.

These platforms aim to give users an AI agent that acts as a personal shopper. With minimal input, the agents are designed to handle the entire shopping process—from product selection to completing the transaction.

Agent Pay’s UAE trial will be conducted in partnership with Majid Al Futtaim, a corporation that owns shopping malls, hotels, and various retail stores across the region. One of the initial use cases being explored is using Agent Pay to shop for and purchase movie tickets at VOX Cinemas.

Choosing the Right Ticket

Although these platforms unlock powerful use cases, questions remain about how effectively AI agents can perform these tasks.

For example, if a user wants to purchase movie tickets, how specific must their instructions be for the AI agent to fulfill the request to their satisfaction? If customers need to provide strict guidance on the film and showtime, the AI agent’s value may be limited.

Conversely, many users may be uncomfortable giving AI full autonomy to select and purchase their evening’s entertainment. This could lead to a surge in disputes if customers are unhappy with the AI’s choices.

What’s more, there are still concerns about the security of agentic commerce transactions and the protocols needed to prevent fraud and misuse.

Not a Novelty

All of these factors contribute to the obstacles agentic commerce faces in achieving broader acceptance. While many users are open to AI-assisted shopping, they often want the final say before a payment is made.

Despite these lingering questions, many of the largest financial services players have invested heavily in the infrastructure to facilitate this new paradigm. For example, both Visa and Google have launched protocols designed to establish guardrails around AI agents.

This investment, combined with the promise of agentic AI, indicates that organizations can’t discount agentic commerce as a novelty. While there may be no need to rush adoption, companies should consider how this disruptive technology could shape their operations.

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Much has been made of the potential efficiencies that stablecoins and other cryptocurrencies could bring to cross-border payments, but Brazil’s government also believes their use creates a tax loophole.

According to Reuters, Brazil’s ‌Finance Ministry is considering expanding the scope of its financial transaction tax to include certain cross-border payments made with digital assets. Under rules taking effect in February, Brazil classified stablecoin transfers as foreign exchange transactions. This classification also applies to international payments made with digital assets as well as  transfers to and from self-custody wallets.

Although capital gains from crypto trades above prescribed limits have been taxable in Brazil, crypto-based payments have not. Officials say this gap has opened the door for digital assets to be used in nefarious activities like money laundering. There are also concerns that some organizations may use cryptocurrencies to falsify the amounts they declare for import taxes.

“I think money laundering is a bit of an over-exaggeration here–I think it mainly pertains to businesses and B2B or B2C payments,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “I’m sure at the end of the day who the government is actually targeting is these businesses who aren’t laundering money, but they may be underreporting these numbers.”

A Demonstrable Boost

While these concerns likely have merit, taxing crypto transactions could also provide a demonstrable revenue boost for Brazil. The nation’s crypto market has surged ⁠in recent years, driven in large part by increased stablecoin usage.

Tax data shows that crypto transactions reached 227 billion reais (‍roughly $42.8 billion) in the first half of 2025, a 20% year-over-year gain. Tether’s USDT stablecoin accounts for approximately two-thirds of that volume, while bitcoin represents around 11% ​of the transactions.

“It’s a double-edged sword,” Hugentobler said. “The industry needs regulations to grow adoption and use cases, but if regulations are too strict, businesses and other users could revert back to traditional methods. I think this is a long ways away from that, but if they stifle use from too strict regulations it will negate the revenue side of the equation. If companies treat these payment options like any other payment options, they have nothing to worry about.”

Increasing Financial Inclusion

In addition to cross-border payments efficiency, stablecoins have gained ground in many regions because they markedly increase financial inclusion. In areas with currency instability, leading U.S. dollar-backed stablecoins like USDT and Circle’s USDC can offer a more reliable alternative.

This reliability has made stablecoins far more viable for payments than cryptocurrencies such as bitcoin or Ether. This sentiment was echoed by Brazil’s central bank, which found that stablecoins were largely used in the region as an inexpensive way to hold and spend USD.

Central bank officials believe that taxing these transactions would provide greater visibility into digital asset usage and help mitigate misuse. However, the proposal still requires approval from Brazil’s federal tax authority.

“Brazil is one of the world’s largest stablecoin markets by transaction volume, so this could become a live case study for stablecoins with FX-type regulations where others follow suit,” Hugentobler said. “But the fact that Brazil’s government is releasing regulations around stablecoins means it is accepting them, which is a step in the right direction overall. Whether or not growth or volumes decrease in the short term is yet to be seen, but I think as long as businesses and other users adhere to the regulation and fees aren’t too steep, it should be good for growth in the longer term.”

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JPMorgan Chase has decided to shut down its VW Pay division, formally known as the J.P. Morgan Mobility Payments Solution. The Luxembourg-based unit struggled to achieve profitability in the once-promising field of automotive payments, which enables customers to make digital payments for fuel, parking, and other internet-connected services.

JPMorgan will continue providing mobility services to its existing customers, but the operation will be folded into other divisions. The business was founded by Volkswagen in 2017 and acquired by JPMorgan four years later.

Customers Hard to Find

At the time, JPMorgan saw an opportunity in in-car payments and expected the segment to take off. But the market never fully developed—largely because additional automakers and parts manufacturers, beyond VW, would have needed to integrate closely with Mobile Payments Solutions.

“When Volkswagen started this division to explore in-car payments, JPMorgan jumped in and bought it as a strategic investment they wanted to scale,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “The idea is that cars could be equipped with payment transponders and could automatically make purchases at gas pumps, charging stations, and drive-thrus. The tech was there, but making it usable required a ton of integration work with the providers who the car companies would buy from. So you have a long strategic cycle, but what killed it was the revenue model, or more specifically the lack of one.” 

Losses Pile Up

Volkswagen Group and its associated brands remained the primary customers, though it onboarded eight merchant clients last year. Despite that progress, the unit posted a €28.8 million loss in 2024.

“JPMorgan invested heavily in the development and integration, but how do they make money on it?” Apgar said. “Automakers could charge for the hardware as part of an option package. But in terms of ongoing revenue, initial thoughts were that consumers may pay a fee for the convenience of embedding payments within their car.”

Another setback was the pandemic, which accelerated the adoption of contactless payment options, reducing the need for in-car payment solutions.

“I go back to the old adage,” Apgar said. “Not everything that can be built should be built.”

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Alibaba is gearing up to supercharge its vast business-to-business ecosystem by tapping JPMorgan’s tokenization infrastructure, laying the groundwork for a new kind of cross-border value network.

The network will center on tokenized fiat currencies that function similarly to stablecoins. According to CBNC, Alibaba is already experimenting with tokenized U.S. dollars and euros, with plans to support additional currencies over time.

Alibaba expects to launch the network by the end of the year, and the system would represent a milestone for tokenization. Given Alibaba’s substantial ecosystem, the platform could ultimately process billions in annual volume.

Participating in a Payment

For Alibaba, the benefits of this system are clear. It would allow the company to move money across borders and between currencies without relying on multiple banks or crypto exchanges.

Although technology has brought businesses and consumers closer together around the world, payments have not kept pace. The current cross-border model still depends on a correspondent banking network, where several banks may be involved in processing a single transaction.

This often results in delays, higher costs, and limited visibility into money movement. These issues have persisted despite efforts by regulators and the launch of various cross-border payment solutions.

The Leading Contender

Digital assets are emerging as one of the leading contenders to streamline this process. Company-issued stablecoins like Circle’s USDC and Tether’s USDT are tied to the value of the U.S. dollar and backed by the issuing company’s reserves. Tokenized deposits operate similarly, except they are issued and backed by financial institutions.

JPMorgan has been active in both tokenization and stablecoin deployments through its Kinexys digital assets brand. Among other projects, the company recently launched its JPM Coin on Coinbase’s Base network—a token built for use by institutional clients.

While it’s not yet clear whether the JPM Coin will play a role in the Alibaba partnership, the launch of the latter’s system represents a step toward broader tokenization adoption in real-world B2B applications.

Alibaba’s business segment has also seen rapid growth in its supplier base. The brand’s number of active suppliers worldwide has grown by 50% year-over-year during the March-October period.

The post Alibaba Taps Tokenization Tech for Cross-Border B2B Payments appeared first on PaymentsJournal.

From transforming member experiences to building a culture of information literacy, data has become a catalyst for innovation at credit unions. New use cases are constantly emerging for organizations willing to explore them, and artificial intelligence will only increase their value.

In a PaymentsJournal Podcast, Jeremiah Lotz, Senior Vice President of Experience Design and Enterprise Data at Velera, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, explored how credit unions are collecting and leveraging data to improve efficiency and better serve their members. 

Data As an Asset

Forward-thinking credit unions view their data not just as a resource, but as a strategic asset—a goldmine of insights into both members and the business itself. While many credit unions have already invested heavily in data, unlocking its full potential requires clarity on what the organization hopes to achieve. The first step is understanding how the institution intends to put that data to work.

“Look at what the data is saying, and how will it help us make decisions, as opposed to just for historical information,” said Lotz. “Once the organization recognizes that there’s an opportunity to use the data to make decisions or drive intelligence, that’s a sign of a mature level of adoption.”

A key driver is executive alignment at the C-suite level, ensuring that the credit union can use its data to grow, engage and retain membership, and ultimately inform decisions. The next step is empowering data teams to suggest use cases, regardless of the division they work in. When non-technical staff can articulate business needs that data can address, it reflects a culture that is ready to move forward.

“It’s a way to be able to say, ‘I have a problem’ or ‘I have an opportunity that maybe data could help me with,’ versus expecting people to say, ‘Hey, I think you’ve got data. Let me see these three fields and see if it does anything for me,’” Lotz said.

Anticipating Member Needs

Credit unions are learning that consumer data isn’t just numbers—it’s a roadmap to a better member experience. By analyzing individual patterns, institutions can spot potential financial challenges or opportunities before they happen. Using predictive insights in this way transforms interactions, moving beyond reactive service to experiences that delight members.

“It doesn’t always have to be super aggressive,” said Lotz. “It can be more about putting something in front of them that might help in a situation, if they so choose.”

At the same time, members expect their data to be used responsibly—but they often worry about privacy. Credit unions can address these concerns by clearly communicating how data usage benefits members, showing that it’s designed to make their financial lives easier and more personalized.  

“Whether it’s coupons I receive or recommendations when I’m shopping online, we know this data collection exists,” said Lotz. “It would be nice to understand that my financial institution is going to use it in a way that’s going to help me, that’s going to protect me or maybe give me opportunities by predicting my behavior.”

Predicting when a member might need a product is just the beginning. Data can also streamline everyday interactions. Instead of asking members to fill out forms, a credit union can provide pre-populated applications or automatically update existing accounts. These anticipatory actions reduce friction and create a tangible, member-first experience that sets the institution apart.

“I have a mortgage with a credit union and it is quite possible for that credit union to predict that each year I need to provide proof that I have homeowners insurance,” said Miller. “This is not a magical data-derived prediction. It’s literally in the system.”

“But to the extent that the credit union would be able to anticipate that this is a need—some document has to be provided and returned. The institution has to take that action proactively, rather than dumping it on me to follow up with. You have the opportunity to turn what might be transactional interactions into wow moments.”

Enlisting the Whole Organization

Data literacy isn’t just about understanding the data—it’s about understanding what lies behind it and how the organization can leverage it. That starts with conversations between data and business teams, which require a shared language across the organization.

“By having that conversation at every level, you’re giving the opportunity for the people who understand the data to start talking with the individuals in the business units and the operations teams,” said Lotz. “Once they start talking about some common problems that they’re facing, they can start to look at data as an asset.”

Identifying ambassadors for the data practice is helpful—individuals who understand how data connects not only to their regular work but also to new opportunities. Considering how to disseminate and distribute data is an important part of bringing non-technical employees into the process. When leadership can put actionable, accessible information into everyone’s hands, it fosters a fully data-literate organization from top to bottom, rather than concentrating knowledge in the hands of a few specialists.

Urgency, Not Emergency

Artificial intelligence has the remarkable ability to uncover patterns and insights within vast amounts of data, but it’s important not to put the cart before the horse. AI should inform and enhance decision-making, not dictate how data is used.

“We have to focus on understanding governance before glamour sometimes,” said Lotz. “We’ve got to make sure we’re focused on responsible enablement of AI. We’re focused on data quality, model transparency and ethical use. Those are non-negotiable things when it comes to AI.”

When applied thoughtfully, AI can power a range of purpose-driven use cases that support members’ well-being. From fraud prevention and personalized experiences to credit risk insights and financial wellness tools, AI works best when it’s focused on initiatives that make sense and deliver real value to members.

“One of the things that a mature governance structure can do is communicate the fact that organizations have to deal with technology like this with urgency,” said Miller. “But it is not an emergency. If we don’t deploy the new tool next week, that is not the end of the world. It is better to do it correctly and in a sustainable, stable method that results in continuous new improvements than it is to get something out there immediately today.

“There’s an opportunity to harness the energy that can come from throughout an organization, with appropriate attitudes toward doing things that are sustainable and lead to long-run change,” he said. “When you have a group of individuals who understand the technology can then start a conversation within the organization, that’s a great opportunity.”

The post The Information Age: How Credit Unions Can Maximize the Impact of Their Data appeared first on PaymentsJournal.

As more consumers feel the impact of holiday spending on their budgets, PayPal is launching its buy now, pay later service in Canada.

Customers will be able to split purchases between $30 to $1,500 into four installments, as long as the merchant is a PayPal partner. One of the goals of the launch is to give consumers another payment option during tough economic times, as many have turned to installment loans to navigate financial quandaries.

However, PayPal is entering a market already served by Affirm, Klarna, and Afterpay, which have established BNPL offerings in Canada. Still, PayPal has managed to achieve approximately 20% quarter-over-quarter volume growth in the highly competitive U.S. market, where these same rivals operate.

A Need for Alternatives

PayPal recently expanded its U.S. offering to let customers make in-store purchases using BNPL—previously available only for e-commerce transactions. To encourage adoption during the holiday season, the company is also offering 5% cash back on all BNPL purchases through the end of the year.

Consumers have shown growing interest in alternative payment methods. PayPal highlighted this in its research, which found that roughly 60% of U.S. consumers are more concerned about holiday spending this year, while over 80% of shoppers who have used or considered BNPL plan to use it for holiday purchases.

A Popular Refuge

BNPL has become a popular lifeline for consumers, largely because these products typically involve low or no fees and often don’t require credit checks.

While concerns persist about potential misuse and the need for stronger regulatory oversight, BNPL loans seem destined to play a substantial role this holiday season. According to Adobe, BNPL purchases on Cyber Monday are projected to reach $1 billion for the first time.

This trend could benefit merchants who view BNPL as a tool to increase average order value. And for Canadian customers, it could enhance cross-border purchasing power, as they’ll now be able to use BNPL at U.S. based-merchants within PayPal’s ecosystem.

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Venmo’s new rewards program Stash lets users earn rewards for activities such as receiving direct deposits or shopping with participating retail partners. However, these rewards don’t apply to the company’s flagship peer-to-peer payments service.

The Venmo Debit Mastercard already offers 1% cash back on purchases made from the card balance and 2% with auto reloads. Stash is designed to encourage customers to keep more funds in their accounts, offering up to 5% cash back for those who receive eligible direct deposits of at least $500.

“Venmo’s new reward plan is not only about increasing spending but about retention,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “Given the rewards enhancers for auto reloads and direct deposits, Venmo is trying to be a primary vehicle for consumer payments.”

A new Stash feature also lets cardholders choose from curated bundles of their favorite brandsto earn up to 5% cash back on Venmo debit card purchases. Users can select from groups of participating brands such as McDonald’s, TikTok Shop, and Uber.

“The personalization of rewards is a key feature of the Venmo merchant bundling,” Danner said. “Venmo isn’t the first to use merchant-funded rewards on a debit card, but the issuers do this because it is a way to fund the card without having to foot a large rewards expense bill on the issuer side.”

Not Applicable to P2P

At this point, there is no reward for making peer-to-peer payments, which remains Venmo’s core offering. According to CoinLaw, Venmo is projected to hold a 61.8% share of U.S. mobile P2P payment users in 2025, with a user base exceeding 100 million customers.

However, Venmo is exploring new ways to expand the Stash ecosystem. The company says consumers will start earning rewards for paying with Venmo at its network of nationwide merchants sometime next year.

Seeking Younger Consumers

Venmo has also been working to build up its debit card offering. CNBC reported last summer that penetration among Venmo users remained in the single digits, compared with 44% of Cash App users.

The move aligns with Venmo’s ongoing strategy to attract younger consumers, who tend to prefer debit cards over credit cards. Earlier this year, Morning Consult’s survey found that 63% of Gen Z had abandoned credit cards in favor of alternatives such as debit cards and cash.

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Although artificial intelligence presents much to be excited about, a substantial technical burden remains in building out the ecosystem necessary for the vision of its biggest cheerleaders. Many companies have made agentic commerce a high priority, but the amount of work left to do is substantial, and fitting this into the modern economy is highly complex.

That’s why Christopher Miller, Lead Analyst in Emerging Payments at Javelin Strategy & Research, advises caution on agentic commerce. In a new report, 2025 Emerging Payments Survey: Agents Enter the Stage, Miller warns that the technology will not be scaling, even within the next year or two. He also thinks that by the time AI reaches maturity, ChatGPT is not likely to remain its standard-bearer.

Be Wary of New Adopters

Many people have fallen for the hype of AI, and Miller has encountered many who think that agentic commerce is already happening at scale.

“That’s not true,” he said. “What is true is that there is consumer interest in using chat-like tools to consider purchases. There is some evidence that they would be willing to complete the purchases through their agents, although that’s much less clear because the raw numbers are very, very small.”

Looking strictly at survey numbers presents problems because current users of agentic commerce are unlikely to be representative of the general population. If a survey of 3,000 people finds that 100 have performed a certain act, those 100 people are, by definition, early adopters and unlikely to represent the behaviors and the trajectories of the rest of the population.

No matter how small the number of agentic commerce users is now, people are showing that they are willing to consider trying it. Even among those who have not used such a tool, 40% f say they might be willing to trust it. That is an early sign that more consumer adoption is coming.

There is also substantial evidence beyond the Javelin survey that consumers are trying agentic commerce tools. There is no doubt that people are downloading and trying these tools. The number of people using them every day and have made them their actual virtual assistant appears small, but many people are using AI sporadically, a couple of times a week or a couple of times a month.

“That’s evidence that they are willing,” Miller said. “Will they use it over time? Will they fully change their behavior? We don’t know. But our data suggests that 40% of those people would be willing to expand their usage. Sometimes when you run surveys like these, you see a substantial portion with a categorical unwillingness to use the technology for some reason, whether it’s lack of comfort or distrust of the companies providing it or whatever. If we have at this point a high degree of willingness even among those who have not yet used, I think that suggests that there’s room to grow.”

A Maturing Industry

There are also many questions about what a more mature AI experience would look like. For most people today, their default interaction with the Internet is to type into a box and get back some sites or suggestions. If their first instinct becomes to look for something in ChatGPT instead of Google, it is a different experience in terms of accessing information about shopping decisions.

“If you never decide that ChatGPT is your first stop to get information, and you continue to go through Google, then this opportunity doesn’t grow to be as big as people think it is,“ Miller said. “That is what’s really up for debate, whether people will, broadly speaking, make that shift. Will it remain a niche? Will it remain something that they do side by side, a little bit of column A, a little bit of column B? We’re looking for insight into that kind of question.

“How quickly that transformation takes place is what tells a merchant, or a payment processor, or a card issuer that this thing is really happening and we have to prioritize getting in on this now. If we cannot participate in that ecosystem, then we will lose the payment activities of those customers.”

Moving Beyond ChatGPT

Even though ChatGPT is the best-known and most-used AI interface right now, Miller thinks that could end as the industry matures. In the early days of the Internet, services like AOL and CompuServe bundled web access with a user interface. Consumers bought the Internet access component from their cable company.

Today, we have a chat interface provided by ChatGPT that may seem to have cracked the code of AI, but that is unlikely to end up being the unique value proposition of this set of technologies. That is not the history of any other kind of transformative technology. This technology enables more than just the ability to type in a line of chat and get back text that tells you answers. Miller thinks the future of agentic commerce could be features that are embedded in other tools.

“It’s possible that some people will want a single access point across all things, but there are so many reasons and so many factors mitigating against that,” he said. “People might say that what they want is a single place to do all of their shopping, but when it comes down to it, maybe they actually prefer a few very particular shops. They might actually trust the insight or suggestion or advice provided by those companies as opposed to from some single big company.

“The delivery of things like these artificial intelligence tools could come from a few stores, maybe Amazon and Walmart and Target. It is unlikely that some single tool will actually know everything about you, will be able to handle all of the types of choices that you would have, and would actually be good at it. To the extent that you are the type of person who will purchase from a single brand, you’re probably not going to go for the generic search result, and you’re not going to use a tool that just tells you whatever the random best one is. You want to know where is the Delta flight, or some other branded thing. That’s the direction something like this is likely to go.”

‘You Will Lose Out’

Some people will try anything new all the time, but for others, new technology has to solve a lot of problems before they’ll even think about learning it. The first pass through AI has not solved a lot of problems. Furthermore, the problems AI has solved might not be of interest to a wide group of people.

But Miller does see that consumer behavior is shifting toward a willingness to use and or trust agents as payment entities.

“That constitutes a capability challenge that you have to meet,” he said. “If you are not changing your technical and business capabilities to recognize that reality, you’re not going to die this year, but you will lose out.”

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As Agentic AI continues to emerge as a force shaping the future of shopping, Microsoft has conducted an experiment to test its effectiveness—running several AI agents through a simulated marketplace. The study found that these agents are susceptible to manipulation and tend to struggle when faced with too many options—much like humans. The results suggest that the technology still has a long way to go before it’s ready for widespread adoption.

Using 100 virtual customers and 300 virtual businesses, the experiment modeled transactions such as ordering food or hiring home improvement services. Each customer had a list of desired items and amenities required for the transaction to be considered satisfactory.

The good news is that both advanced proprietary models and open-source systems outperformed simple baselines, such as randomly selecting or always choosing the cheapest option. GPT-5 was the top-performing agentic model, achieving near-optimal results.

Flummoxed by Complexity

As scenarios grew more complex, Microsoft found that the results became less impressive. Loading the AI agents with more options and search results actually reduced the number of comparisons they made, as the models tended to settle for the first “good enough” option. With the exception of GPT-5 and Gemini-2.5-Flash, the agents ended up contacting only a small fraction of the available businesses. In one case, a model repeatedly reached out to businesses that did not offer the goods or services the customer was seeking.

The AI agents were also vulnerable to manipulation by the very websites they were searching—meaning the same marketing tactics that influence human shoppers also worked on the bots. Microsoft’s conclusion: “Agents should assist, not replace, human decision-making.”

Shoppers Remain Unconvinced

Many have tried or considered using agentic AI, according to Javelin Strategy & Research, but remain unconvinced that it will improve their lives. The Microsoft study suggests AI agents still have significant ground to cover before becoming a natural part of consumers’ routines.

“There’s very strong evidence for consumer interest in using chat like tools to consider purchases,” said Christopher Miller, Javelin’s Lead Analyst in Emerging Payments. “There is some evidence that they would be willing to complete the purchases through their agents, although the raw numbers are very, very small. But if you never decide that ChatGPT is your first stop to get information about stuff, and you continue to go through Google, then this opportunity doesn’t grow to be as big as some people think it will.”

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As payment innovation accelerates, financial institutions are feeling the pressure. Legacy infrastructure, shifting regulation, and rising customer demand for real-time experiences are forcing banks to rethink how they deliver payments.

In response, payments as a service (PaaS) has emerged as the go-to model for cutting through complexity and speeding up transformation. James Wester, Co-Head of Payments for Javelin Strategy & Research, recently hosted a PaymentsJournal webinar that explored the benefits of PaaS and the challenge of choosing the right provider. Joining Wester were Deepak Gupta, EVP Product, Engineering & Services at Volante; Gregory Prince, Director Core Payments Product at Fifth Third Bank; and Alan Ng, Managing Director of Payments Technology Consulting at Accenture.

Removing the Pain Points

The key concept of PaaS is that it provides the technology enabling a bank or other organization to process its payments. The provider is responsible for creating that infrastructure, which could be cloud-based or on-premises but managed by the provider. In any case, PaaS delivers both the payment processing capabilities and the infrastructure, while the bank remains responsible for the business and operations.

“People know what software as a service is,” said Gupta. “Payment as a service is nothing but payment software as a service. At a very simple level, the provider removes all of the pain points which a bank has to worry about.”

For most banks, it does not make sense to build their own payment solutions—especially when providers like Volante have already delivered such services to multiple financial institutions. PaaS has emerged as the model for handling commoditized processing, allowing banks to expand their capacities and take advantage of the cloud.

PaaS presents itself as an alternative to custom payment solutions. When a new version of Oracle or SAP comes out, banks with custom payment processes must conduct a differential analysis to ensure compatibility with existing systems. Furthermore, when a customized payment system is built specifically for a bank’s needs, it misses out on the collective wisdom gained from the experiences of other organizations facing similar payment challenges.

“People said this is not the way software should be done,” said Gupta. “Software should be out-of-the-box. It should be configurable and scalable, and you shouldn’t have to worry about infrastructure. And that’s where software as a service came in.”

Catalysts for Change

The most obvious catalyst driving the shift from legacy technology to payments as a service has been modernization—the push from mainframe environments to something more up to date. The introduction of instant payments has accelerated this trend. Banks that began working with RTP and FedNow payments realized they needed a modern tech stack.

Another driver is ISO 20022 compliance, particularly protocols that create standards for the information sent with each payment. Financial institutions are already on that journey, implementing changes for the Federal Reserve and SWIFT, with the expectation of more industry shifts to come. Much of PaaS is already built on top of that data foundation.

Finally, there’s embedded payments. Fintechs are continously updating consumer experiences as they evolve and move further into real time. That shift becomes increasingly harder to achieve with a legacy tech stack.

The Challenge of Building Your Own

Creating a bespoke payment application presents its own challenges. Banks would rather focus on client relationships than on patching, upgrading, and maintaining their tech stack—but it’s easy for the latter to occupy much of their time.

“Go to any bank today and if you want to start a new project, IT’s book is filled for the next year, if not longer,” said Gupta. “If your head of business goes to IT and says, ‘Hey, when can you guys do it?’ Most often the answer is: ‘We can add it to our pipeline and start it next year.’ But you don’t have the luxury of waiting for two years, because customers are pushing to launch these new offerings.”

In addition, existing systems are not readily scalable. COVID-19 resulted in a surge in digital payments, as consumers shifted away from in-store purchases to online transactions. Systems could not scale quickly, and banks were reluctant to modify them for fear of breaking something. To complicate matters, many of the employees who originally built those systems are no longer available.

“To me and many of my clients, when we were contemplating the concept of payment as a service, that was the starting point,” said Ng. “I always use this metaphor: Do you dry clean your clothes yourself, or do you take them to a dry cleaner?”

Finding a Trusted Partner

For many financial institutions, payments modernization is uncharted territory. That’s why it’s important to choose partners with a proven track record.

“If you go with a vendor who does it for many other banks of different sizes, you’re already getting the world class infrastructure, security, resiliency, and performance, and you’re not paying for any of this,” said Gupta. “This is part of your basic fee, based on a per transaction basis.”

When evaluating providers, don’t just consider the number of customers they serve—look closely at their uptime. Availability should be near 100%, since the system must be accessible at all times. Security is equally important, as it protects proprietary data from compromised or sold on the black market.

Internally, have an honest discussion about which customizations the organization is prepared to support. Too often, financial institutions focus on customization for the sake of ownership. But if the solution effectively addresses the problem at hand, it’s better to embrace it rather than overcomplicate the process.

“There does not need to be 18 million different ways to process a transaction,” said Prince. “Make sure that you’re grounded on the problem that you’re trying to solve and not trying to customize just for the sake of customization. A lot of financial institutions get very passionate about the way they expect something to work because we have built these things around our own deficiencies. Sometimes we stand in the way of our own success.”

A Long and Happy Marriage

While PaaS is a major component in a payment modernization journey, it should not be equated with payment monetization. That expectation needs to be set across the organization—this is not a magic wand.

“We really need to stop thinking about payment modernization as an end goal,” said Wester. “You are not going to reach a point where you are suddenly modernized and that’s it.”

Gupta added: “When you’re choosing a software vendor in the payment space, you’re choosing for the next 10 or 20 years. It’s almost like dating: you can date with multiple vendors, but once you go to PaaS, you’re married. Anytime there’s an issue, you’re going to call the vendor and say, hey, my payment is stuck. What do I do with this?

“Don’t think of PaaS as a cheaper, better, faster option,” he said. “Think of PaaS as somebody you want to spend next 20 years with, because that’s what you’re going to be doing.”

The post Is Your Organization Ready for Payments as a Service? appeared first on PaymentsJournal.

The next iteration in the rapid evolution of artificial intelligence has arrived, and organizations are racing to harness the potential of AI agents to create a dynamic new shopping experience. However, as powerful as agentic commerce can be, the road to adoption won’t be without hiccups—many of which will lead to a surge in disputes.

In a recent PaymentsJournal podcast, Joseph McLean, CEO and Co-Founder of Quavo, and Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, discussed the challenges that can arise in the agentic commerce dispute process, the steps financial institutions can take to prepare, and how disputes can serve as an opportunity to engage and retain customers in the age of agentic commerce.

Navigating Uncharted Waters

Traditionally, as the volume of payments has grown, the number of disputed transactions has remained relatively stable. However, as agentic commerce gains traction, this pattern is unlikely to hold.

This shift raises many questions for organizations attempting to navigate these uncharted waters.

“There is going to be fraud on these transactions; there are going to be mistakes that are made by consumers or by AI,” McLean said. “The regulations aren’t super clear on who is liable in these scenarios when consumers are making purchases. Is it the consumer? Is it the merchant? Is it the issuer? This also opens up new attack vectors for fraudsters, where they can get into the agentic commerce area themselves posing as other people and making purchases.”

In particular, there may be a rise in first-party, or consumer-engaged, fraud. For example, an AI agent might follow its instructions perfectly, yet if the customer is dissatisfied with the outcome, they may still dispute the transaction. Alternatively, a consumer could intentionally make a purchase with the plan to dispute it later—claiming fraud or an AI error.

These situations create grey areas, as liability becomes unclear when a consumer authorizes an agent but doesn’t directly complete the purchase themselves. It’s therefore critical that these issues are resolved before agentic commerce scales further, since confusion and ambiguity could be detrimental to adoption.

“Merchants, payment processors, and card issuers are all going to think about this in terms of liability and consumers are going to think about it in terms of experience,” Miller said. “If they have an experience that doesn’t meet their expectations, that has implications for the growth of this ecosystem.”

“If a consumer doesn’t believe that they’re going to get what they want by delegating authority to choose or to purchase some piece of software that we’re calling an agent right now, they might not use the agent,” he said. “That’s a fundamental limiter on growth here.”

Trusting the Process

To develop a stronger framework around the dispute process, several factors should be considered by financial institutions.

First, FIs will need a mechanism to gauge the consumer’s intent when they instructed and authorized the AI agent.

Given that AI systems can hallucinate or misinterpret instructions, it will be important to verify whether the agent accurately carried out the customer’s request. Understanding consumer intent is also critical because bad actors may attempt to manipulate AI agents—for example, by creating fraudulent websites or impersonating legitimate services to trick AI into making unauthorized transactions.

These challenges also raise broader questions about how to proactively address fraud in an agentic commerce environment.

“When it was a fake website that consumers visited, we could take that head on and teach people what are the ways to recognize a fraudulent website,” Miller said. “If it is your agent that is deceived—if one platform impersonates another within an agentic integration flow—those are entirely outside the sphere of consumer, they can’t do anything about it. It’s interesting to think about not just who is liable, but who will be perceived as having responsibility for solving that problem.”

Issuers, merchants, and agentic AI developers may all need to take on new roles in educating both consumers and AI systems. Considering the potential scope of agentic commerce, an industry consortium approach might also be required to set up comprehensive safeguards.

Regardless of the specific path forward, developing a framework for agentic commerce will likely be necessary sooner rather than later.

“A lot of consumers are using this, and we’re going to see it happen a lot more in 2026 and going forward, but consumers will need to trust what’s happening through the agent,” McLean said. “They will need to trust their merchants, and they will need to trust that their banks can handle it appropriately when something does go wrong.”

Fighting Fire with Fire

To develop this trust, financial institutions can take proactive steps to prepare for the increased volume and complexity of agentic commerce disputes. Historically, many FIs have responded to spikes in fraud or dispute cases by simply adding more personnel to the process. However, this approach is unlikely to be effective in the new paradigm.

“The best way to solve this is going to be pulling in more technology, better solutions that solve the problem end-to-end so that the users at the issuing institutions can spend more time focusing on the complex pieces of the work,” McLean said. “These disputes, they will look very similar, but it’s not going to be just more of the same. It’s going to be much higher volumes that are coming through the door and the complexity of these disputes are certainly going to be different than how they’re used to working through disputes today.”

As financial institutions take stock of the dispute process lifecycle, several important questions will arise. For instance, how will the bank handle communications with the cardholder? How will it manage accounting or reconciliation? And how will institutions handle issuing a new card if one is compromised?

These complex challenges can’t be effectively solved by adding more staff or connecting disparate systems. Doing so often creates siloes, which can lead to delays, errors, and poor experiences for both consumers and merchants.

To address these issues, a comprehensive technology solution that manages the end-to-end dispute lifecycle will be paramount.

“One of the things that we need to look at is fighting fire with fire,” McLean said. “How can we bring in AI and those sorts of technologies into the issuing space to help solve these problems, make faster decisions, augment investigations with better data and better materials to help those solutions work through faster.”

“Making sure resolution times aren’t increasing for consumers, making sure that consumers are made whole, and following all the regulations. There are so many moving parts here that the technology is going to have to solve, especially when we start talking about the first party fraud piece,” he said. “It’s another layer of complexity that we’re going to have to deal with, and an effective dispute technology solution is going to be needed by every issuer to handle this problem.”

A Moment that Matters

As financial institutions search for technology solutions, they should consider platforms that handle the full dispute lifecycle—starting from intake. Platforms like Quavo’s offer a unified data solution to receive and track information, allowing institutions to create audit trails and leverage this data within their fraud systems to fight fraud more proactively.

As disputes surge with the rise of agentic commerce, issuers will no longer need to rely on a patchwork of vendors, technologies, and in-house solutions—unlocking significant efficiency gains and potential revenue improvements.

However, one of the most powerful benefits of a streamlined dispute process is its ability to strengthen customer relationships.

“When a consumer has an issue with their accounts—and largely it’s going to be transaction-related—it can go one of two ways,” McLean said. “It can go very poorly and be a bad experience, where your customer may look to leave your institution—and all the research that we’ve conducted says that absolutely can happen.”

“On the flip side, you can take this into what we’ve always called a moment that matters,” he said. “It’s one of those pieces of banking where you can build real trust and build a much deeper relationship with your account holder.”

The post How FIs Can Prepare for the Surge in Agentic Commerce-Driven Disputes appeared first on PaymentsJournal.

In another sign of open banking’s growing role in crypto, Coinbase and Tink have launched direct bank-to-crypto transfers in Germany.

The new capability lets users move funds instantly from their bank accounts into crypto, authenticating the transaction through their bank’s interface. The underlying account-to-account payment rails are powered by Tink’s infrastructure—acquired by Visa three years ago and now integrated into platforms such as PayPal and Revolut.

The Coinbase integration is currently limited to Germany, but there is potential for broader expansion, as Tink’s network spans multiple European Union countries including Spain, France, and Sweden.

The Open Banking Drive

This collaboration was made possible by the EU’s ongoing drive for open banking, which enables third-party providers to connect with banks through APIs. These connections give consumers greater flexibility to switch financial institutions while allowing banks and credit unions to integrate with a wider array of digital services.

To govern these developments, the EU introduced its revised Payments Services Directive (PSD2)—a regulatory framework designed to secure customer data and increase competitiveness among the region’s banks.

Leveraging Interest

One way banks can deliver greater payments optionality to customers is by supporting cryptocurrencies. After an exceptional year of growth last year, crypto initiatives have become top of mind for nearly every financial institution worldwide.

Coinbase has capitalized on this momentum to forge new partnerships and expand its offerings. It launched a stablecoin acceptance platform for merchants through a collaboration with Shopify and gave app developers the ability to integrate crypto purchases via Apple Pay—streamlining a process that was once complex and costly.

Perhaps more notably, Coinbase recently launches was its x402 payments agentic commerce protocol, a platform which allows APIs, apps, and AI agents to conduct transactions during web interactions with minimal code integration. This opens the door for AI agents to autonomously perform stablecoin transactions.

While these integrations have expanded both Coinbase’s footprint and digital assets adoption, they also—and perhaps more importantly—represent progress toward an API-driven open banking model.

The post Coinbase and Tink Merge Pay-By-Bank and Crypto appeared first on PaymentsJournal.

Much like with generative artificial intelligence, the emergence of agentic AI has been accompanied by substantial hoopla. However, as more organizations race to incorporate the next big thing into their operations, many are struggling to plot the road map to agentic commerce.

As Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research, detailed in the report Making Sense of Agentic Commerce: How Do We Get Started?, businesses and financial institutions can take tangible steps to prepare for agentic commerce. However, depending on the organization, a speedy implementation may not be the best approach.

The Vision Is Real

Agentic commerce has been defined as leveraging an AI agent to automate all aspects of a transaction, including the purchase, with minimal user interaction. However, if this model were implemented, it would create a dramatic shift in the shopping paradigm.

“Depending upon the form that automation takes, it could have substantial impacts on the ways that companies interact with individuals,” Miller said. “This means if you’re interacting with other people’s software instead of them, you have to do different things. You need to build a different type of front door, you need to build a different ecosystem to respond to the needs of agents, and you potentially have to change your advertising models.”

These are important questions, and many organizations are feeling the pressure to provide answers. This pressure has only increased as leading financial services companies like Visa and Mastercard have launched agentic commerce platforms. Additionally, Visa and Google have created protocols designed to be the framework for the future agentic environment.

These launches have prompted many organizations to wonder if, and how, they should proceed with their own agentic commerce initiatives.

“It’s important to say, ‘No, we’re not there,’” Miller said. “There is a vision; the vision is real; the potential impact is not fake, but what is going on this instant is almost nothing—and I can’t overstate that. There are no agents, that is not a thing that exists yet—in terms of a fully capable agent that can do all of this stuff for you. Zero, and not going to happen anytime soon, but there are emerging capabilities that are parts of that vision.”

An Iterative Move

The first step in getting started with agentic commerce is to identify where the technology is in its evolution and map the ways that AI agents could interact with a business’ products.

Currently, AI primarily factors into the shopping experience is by streamlining the search process and providing curated selections. In some instances, the user can even pay for the subsequent purchase within the AI platform.

“You could search in ChatGPT and say, ‘I want to see some shoes,’ and it’ll show you some shoes and then you could click a ‘buy now’ button—but that’s not an agent in anyone’s vision,” Miller said. “That is, architecturally and infrastructurally, an iterative move from a subscribe and save.”

As far as this reality is from the vision of agentic commerce, the current model has many limitations.

For example, Perplexity users can pay through PayPal directly in the AI chat, and ChatGPT users can make purchases at Etsy and Shopify in the app. These partnerships are steps in the right direction, but they also exemplify the barriers to agentic commerce.

“You could buy one thing from one place using a certain card—so there’s a long way to go,” Miller said. “But it gives companies a good way to understand things: What are the capabilities in the market? How are they emerging? What can they actually do? What are they integrated with? What are the limitations?”

Boring, Straightforward, and Infrastructural

Once organizations understand AI agents’ functionalities, they can begin to identify where the technology is headed.

“You can say, ‘I can see where the next stage of that is—we’re going to see an announcement in three months or we’re going to see an announcement in six months,’” Miller said. “Identify where the foreseeable agent capability maturity curve overlaps with those existing capabilities, and those are the places that you want to try to build to.”

This may prove difficult, as the definition of agentic commerce has already been stretched beyond the boundaries in many instances. Organizations will likely have to continue to scrutinize this technology as they map the ways the capabilities intersect with their products.

Additionally, many businesses may find that they have limited use cases for AI agents, or none at all. For those organizations moving forward with agentic commerce, one of the key factors will be to develop a shared language across any agentic capabilities within the business.

In larger organizations, many leaders and teams are likely to be tasked with implementing agentic AI. This means that it will be critical to coordinate agentic commerce projects across the organization to ensure this game-changing technology is deployed in a routine fashion.

“This sounds fancy and new and futuristic, and the reality is it’s mostly crushingly dull,” Miller said. “Automation is not interesting, in and of itself. Agents are just accelerated work, and if it was boring work to start with, it doesn’t become interesting because you automated it. This thing gets handed to people as if it is new and crazy and futuristic, but it must be delivered as something that is boring, straightforward, and infrastructural.”

The Word Agentic

For all the hype around agentic AI, in many ways it is simply a bolt-on, customer-facing layer within the shopping experience.

“The word agentic is doing a lot of work right now,” Miller said. “Agentic is being used to describe this notion of things being done for you, and it is being presented from the perspective of the end of an evolutionary stage where somehow all this stuff magically happens.

“But the software has to tap into other existing infrastructure—there’s no new payment infrastructure. There is payment infrastructure necessary to identify the agent—that bit is new and interesting and challenging—but at the end of the day, there’s a box in a warehouse that has to get on a truck and end up on my front porch, and none of that is new.”

The post How Organizations Can Chart the Course to Agentic Commerce appeared first on PaymentsJournal.

After its appeal was denied by the Supreme Court, Google has finally complied with earlier rulings from the past few years and opened its Google Play app store to third-party payment options. App developers can now process payments outside of Google’s ecosystem and inform users about alternative pricing options.

The move marks the latest chapter in the long-running legal battle between Google and Epic Games, whose flagship product is Fortnite. Epic Games sued Google in 2020, alleging that the company maintained an illegal monopoly through its in-app payment system. Earlier this month, the Supreme Court rejected Google’s final attempt to block a District Court ruling requiring it to open up its app store.

A Wealth of Options

Under its previous policy, Google had long barred developers from directing users to cheaper payment options outside its app store and required most apps to use Google Play Billing. As a result, Google collected a commission on nearly every in-app purchase. For subscription-based models, it typically took a cut of recurring payments as well.

Developers now have more freedom to promote offers and handle in-app payments outside Google’s system. They can inform users about external pricing options and include direct links to external checkout pages within their apps. They can also offer alternative payment methods beyond Google Play Billing, such as credit card, PayPal, or their own payment systems.

The District Court order is set to expire on November 1, 2027, and Google has said it may revise the rules again at that time. The new billing options currently apply only in the U.S.

Following the Apple Ruling

Earlier this year, Apple lost a similar battle with Epic Games and was required to loosen its grip on its App Store. After a U.S. district judge ordered Apple to allow developers to direct users to alternative payment options, the company introduced new hurdles—including a 27% fee on external purchases and warning screens cautioning users about third-party payment links.

That suit was finally settled in May, but the terms imposed on Apple were far less stringent than those Google is now subject to. The main restriction bars Apple from charging commissions or fees on purchases made outside its App Store. Still, Apple continues to seek commissions from Fortnite users, even when their purchases occur outside its platform.

The post Google Opens App Store to Third-Party Payment Systems appeared first on PaymentsJournal.

In a step forward for agentic commerce, PayPal has signed a deal with OpenAI to embed its digital wallet into ChatGPT, enabling users to pay for items they discover through the AI tool. 

Set to launch next year, the offering will encompass the entire shopping experience—from product discovery to checkout. Merchants will be able to make their products discoverable on ChatGPT, while shoppers can use the agentic AI tool to identify suitable items and purchase them on preferred terms. OpenAI has noted that product results will remain organic, not sponsored, and ranked by relevance, meaning shoppers will not necessarily be directed to ChatGPT’s partners.

Consumers will be able to complete purchases through ChatGPT using their PayPal accounts or alternative payment methods such as linked bank accounts and credit cards. PayPal also promises value-added features including fraud protection, package tracking, and dispute resolution.

For sellers, the process will be seamless: merchants will not need to build any integrations or interact directly with OpenAI, as PayPal will handle routing, payments, and all back-office functions.

Building a Payments Process

OpenAI announced earlier this year that it was integrating a payments checkout system into ChatGPT. The collaboration with Spotify enabled users who searched for a product on ChatGPT to view top results with prices, reviews, and links to relevant sites. However, users were still directed to the merchant’s platform to complete their purchase—an extra step that the PayPal offering avoids.

OpenAI’s instant checkout feature, launched in September, lets users confirm their order, shipping, and payment details and complete purchases without leaving ChatGPT. With a single tap, users can buy directly from the search results page.

The Technology Behind It

PayPal will leverage the Agentic Commerce Protocol (ACP), an open-source specification developed by OpenAI in collaboration with Stripe. ACP lets merchants make their products available within AI apps, allowing users to shop via AI agents. The goal of ACP is to create an infrastructure that connects merchants, consumers, and developers, facilitating the integration of AI agents into the shopping experience.

Additionally, the ACP integration will make product catalogs from both small businesses and large retail brands available to PayPal shoppers.

The post PayPal, OpenAI Team Up for Agentic Shopping appeared first on PaymentsJournal.

Over a five-year period, the number of credit card transactions in India has doubled, while the total value of those payments has nearly tripled—even as debit card transactions have declined in both volume and value.

A study by the Reserve Bank of India (RBI) found that credit card transaction volumes increased from roughly 2.1 million in 2019 to around 4.5 million in 2024. Over the same period, debit card transactions fell from approximately 5 million to 1.7 million.

The RBI attributed this divergence to differences in usage. Credit cards are more often used for e-commerce purchases, credit access, and larger purchases, whereas debit cards are primarily used for cash withdrawals and everyday spending.

The Rise of UPI

Although debit cards may be more of a staple payment method, one key factor behind their decline in India is the rise of the Unified Payment Interface (UPI) real-time payments system.

The National Payments Corporation of India (NPCI), which operates UPI, now handles almost half of the world’s digital transactions. Transaction volume on UPI has surpassed that of Visa and Alipay, and the platform continues to expand its global footprint, as evidenced by UPI’s recent expansion into Qatar.

A Payments Mainstay

With real-time payments systems, users can pay-by-bank through their phone without the need for a card. However, this doesn’t spell the end of the debit card.

In fact, several factors have strengthened debit card usage across many regions. First, tough economic conditions have driven credit card debt to record highs, pushing many budget-conscious shoppers back toward debit.

Second, many debit issuers have taken a page from the credit card playbook by offering rewards or cash back. These incentives are mostly funded by merchants who prefer customers use debit over credit to avoid higher interchange fees.

Finally, the surge of fintechs has led to more debit cards in circulation than ever before. PayPal, Venmo, and Cash App have long offered debit products, and buy now, pay later giant Klarna launched a debit card earlier this year.

Add to that the fact that real-time payments in many regions—including the U.S.—have yet to replicate UPI’s success, and it’s clear that debit cards are likely to be a payments mainstay for years to come.

The post As Credit Card Usage in India Has Increased, Debit Card Use Declines appeared first on PaymentsJournal.

Artificial intelligence is poised to shape this year’s holiday shopping season, with both consumers and merchants increasingly relying on it.

According to data from PayPal, more than three-quarters of consumers plan to use AI as a shopping assistant this holiday season. Already, 40% of respondents have used AI for purchases in the past year, with half of them doing so regularly.

The numbers are even higher among younger cohorts: more than half of Gen Z and millennial shoppers have used AI to help with shopping over the past year.

There isn’t a single way that shoppers are using AI. Holiday shoppers report using it for finding the best deals, comparing products, and discovering gift ideas or recommendations—but none of these activities were cited by even half of respondents.

A Vital Tool for Merchants

Separate data from American Express confirms that small businesses are accelerating their adoption of AI, with younger generations once again leading the way. In fact, 72% of Gen Z and millennial small business owners are using AI, compared to 59% of Gen X and baby boomer owners.

Interestingly, older generations are starting to catch up. Among small businesses that began using AI in the past year, more were Gen X and Baby Boomers than Gen Z and millennials.

Over nine in 10 small businesses say that AI helps them make more confident decisions, and a similar proportion report that it improves how they organize data and insights. Nearly three-quarters of small business owners report a positive ROI from their AI investments, with the most common benefits coming from increased employee productivity and reduced errors.

“To the extent that consumer behavior is shifting towards a willingness to use AI as a payment entity, that constitutes a capability challenge that you have to meet,” said Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research. “If you are not changing your technical and business capabilities to recognize that reality, you will lose out.”

The post AI to Transform Holiday Shopping for Consumers and Retailers appeared first on PaymentsJournal.

Master accounts with the U.S. Federal Reserve have traditionally been the sole domain of banks, but Fed Governor Christopher Waller has proposed a new model that could also accommodate fintechs.

At the Fed’s inaugural Payments Innovation Conference, Waller suggested that payment services companies might be able to obtain a payment account, or a “skinny” master account, that would give them access to the services they need.

For example, the account could provide access to the Federal Reserve payment rails while including safeguards such as balance caps, no interest on balances, and no daylight overdraft privileges.

Eliminating the Workaround

These accounts target fintechs that rely on banks’ master accounts to operate payment services. This workaround becomes a pain point as fintechs scale, and it has pushed many companies to seek bank charters of their own.

For example, merchant payments platform Checkout.com was recently granted a bank charter by the state of Georgia. Checkout.com’s main objective was to gain direct access to U.S. card networks like Visa and Mastercard, allowing the company to act as its own acquirer.

Looking for a Green Light

Expanding access has been a primary reason why digital assets companies like Ripple and Circle have applied for bank charters with the Federal Reserve. Ripple has also applied for a master account, which would allow the firm to hold reserves of its RLUSD stablecoin directly with the Federal Reserve, providing an added layer of security.

While Ripple’s master account has not yet been approved, Waller’s remarks could signal a potential path forward for the company and its peers. He emphasized the importance of innovations involving emerging technologies such as stablecoins, tokenization, and artificial intelligence, and highlighted the increasing role of digital assets in traditional finance.

However, any changes to the current model will take time to implement.

“If these ‘payment accounts’ become real, banks and other financial institutions can access Fed rails directly, which has been a friction point for crypto firms since the 2023 bank fiasco,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “It’s not necessarily a green light for every crypto company, but I think it will be good for crypto exchanges and stablecoins—and eventually tokenization.”

“As the optionality for payments continues to grow, the Fed is recognizing that access to these tools needs potential oversight and better plug-in options for FIs,” he said. “It could come with some nuances like no interest on balances or capping balances, but even with those types of guardrails it could be a step in the right direction.”

The post Federal Reserve Governor Posits Master Account Model for Payments Firms appeared first on PaymentsJournal.

FedNow has continued to expand its network of financial institutions since its launch two years ago, and now PNC Bank is joining the real-time payments system.

The platform operated by the U.S. Federal Reserve now includes roughly 1,400 participating financial institutions. However, the addition of PNC is noteworthy—not only because the bank is one of the largest financial institutions in the U.S., but also because it was one of the last remaining holdouts.

JPMorgan Chase and Wells Fargo joined FedNow earlier, while Bank of America, Citigroup, and PNC had been more reluctant to participate. With Citi now on board and Capital One announcing its intention to follow suit, the number of major U.S. banks not participating in the platform continues to shrink.

Considering the Competition

One of the main reasons many banks were slow to adopt FedNow is that they are members of the Clearing House, a consortium of the world’s leading financial institutions. The Clearing House launched the RTP network in 2017, a real-time payments platform competes with FedNow.

Although PNC is a founding member of the Clearing House, the bank’s support for the FedNow system shouldn’t be interpreted as a lack of confidence in the RTP network. In fact, the RTP network recently set a new daily transaction record, processing over 1.8 million transactions, and continues to broaden the range of use cases on its platform.

Joining the FedNow Fold

While FedNow may have roughly the same number of institutions on its platform as RTP—or even more—it has not yet reached the payments volume of the more established network.

However, FedNow has continued to make strides. The system recently raised its transaction limits, first to $1 million and then to $10 million, positioning FedNow to handle high-value transactions like the B2B payments that have gained traction on RTP.

The addition of PNC Bank to the FedNow fold is another vote of confidence in the platform and could signal the future of U.S. real-time payments. As instant payments continue to gain ground, there may be room for both RTP and FedNow to coexist and thrive.

The post PNC Expands Real-Time Payments Footprint by Joining FedNow appeared first on PaymentsJournal.

In its ongoing efforts to make pay-by-bank systems more customer-friendly, Lloyds Bank is unveiling a kiosk that allows consumers to make payments at UK hotels. The system was developed in collaboration with Lolly, a hospitality technology specialist, and will be demonstrated at an Open Banking Expo in London.

The kiosk allows customers to make direct bank-to-bank payments without using cards. When travelers check out of a hotel, they can select the pay-by-bank option, scan a QR code, and complete the payment through their mobile banking app. Funds are transferred to the retailer’s account in real time, potentially reducing transaction times and processing fees.

Selling It to Skeptical Consumers

Pay-by-bank services have been growing in the UK. Stripe’s pay-by-bank service was successful enough there to justify launches in France and Germany earlier this year.

However, there is a sense that these services are being driven more by fintechs than embraced by everyday consumers. Some question whether the benefits of the new technology are compelling enough to encourage widespread adoption. 

“Consumers already have the ability to pay-by-bank when they use their debit card,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “When you pay with your debit card, it takes the money out of your account. What benefit does the consumer get by following extra steps involving a kiosk to accomplish the same end result, namely paying for a purchase using funds they have in their bank account?”

Apgar thinks Lloyds may need to find an additional incentive to spur usage of the new technology, like a discount or a free dessert. The challenge, however, is that the cost to the merchant of providing the incentive could exceed the card fees they are trying to avoid.

Positioning in the Payments Landscape

Nevertheless, the technology may offer other advantages to Lloyds. In August, the bank launched a barcode-based cash deposit tool with a similar structure. This tool essentially allows customers to use their phones to make cash payments.

“From Lloyds’ perspective, they want to be on the frontlines and be viewed as a payments innovator,” said Apgar. “Even if this doesn’t take off, they will be in the front of the line for whatever is next.”

The post Lloyds Unveils Pay-by-Bank Kiosk for Hotels appeared first on PaymentsJournal.

Ant Group and JD.com, among others, had been gearing up to launch stablecoins in Hong Kong, but those plans are now on hold.

The tech giants had intended to move forward after Hong Kong’s legislature passed a stablecoin bill in May. The framework governs fiat-backed stablecoin issuers in Hong Kong, requiring these companies to obtain a license from the Hong Kong Monetary Authority.

Initially, Chinese regulators viewed the program as a springboard to expand the reach of yuan-backed stablecoins, and Hong Kong began accepting applications for stablecoin issuers as recently as August. However, the Financial Times reported that now the People’s Bank of China (PBOC) and Cyberspace Administration of China had instructed Ant Group and JD.com to suspend their stablecoin plans.

Leveraging the Hype

After the passage of the stablecoin bill, concerns were raised about stablecoins’ heightened potential for fraud. Ye Zhiheng, Executive Director of the Intermediaries Division at the Hong Kong Securities and Futures Commission, said that many companies appeared to have leveraged the hype around stablecoins for financial gain.

Zhiheng emphasized that organizations often saw their stock prices soar after posting any stablecoin-related news on social media, such as announcing plans to apply for a license.

Questioning the Coinage

The potential for fraud and manipulation isn’t the sole reason PBOC officials are now suspending Hong Kong stablecoin launches. One of China’s main concerns is the growing influence of private companies in the financial sector, and whether tech firms like Ant Group or JD.com should even have the authority to issue currencies.

Some argue that this should remain the domain of central banks, and that central bank digital currencies (CBDCs) backed by the government would be more regulated and stable than company-issued stablecoins.

China has already made strides in piloting its digital yuan. However, like many CBDCs, the token has yet to gain traction because its use cases are limited and it doesn’t accrue interest like other funds.

Still, China continues to promote the digital yuan as an alternative to stablecoins. For example, regulators recently asked Tencent to reduce WeChat Pay’s substantial mobile payments market share to make room for the digital yuan.

The post China Asks Tech Firms to Suspend Hong Kong Stablecoin Plans appeared first on PaymentsJournal.

As U.S. real-time payments adoption accelerates, the RTP network set a new daily record on October 3, processing 1,808,967 transactions valued at $5.2 billion.

Since its launch eight years ago by the Clearing House—a consortium of leading financial institutions—the RTP network has grown to become the largest instant payments system in the U.S. The platform now averages over 1.3 million payments daily, and RTP reports that over 1,000 financial institutions are participating in the network.

As the network’s footprint has expanded, so have its applications. RTP said its banner October day was driven by a diverse range of use cases, including gig economy payouts, bank transfers, digital wallet loads, and business-to-business payments.

A Successful Strategy

Expanding the use cases for the RTP network has been a top priority for the Clearing House. Businesses have been the most prolific users of the system, though most of these payments have involved consumers as recipients. To attract more B2B transactions, the RTP network increased its transaction limit from $1 million to $10 million last year.

This strategy has been largely successful. Bank of America was among the first financial institutions to support enterprise transactions up to RTP’s new limit, and the bank recently reported that payments exceeding $1 million now account for more than half the total value of U.S. real-time payments it processes for corporate clients.

Some of the primary use cases for these high-value payments include real estate transactions, corporate treasury operations, and portfolio settlements.

Delivering on Expectations

Payouts are also a key use case for real-time payments systems like RTP. Examples include marketplace platforms paying creators or ride-share companies paying drivers. Increasingly, gig workers expect to receive their earnings—regardless of amount—immediately after completing a job.

For merchants, meeting this expectation helps boost retention and engagement among contract workers. Real-time settlement also provides far greater visibility into company liquidity, enabling better cash management and financial planning.

The Bill Pay Use Case

Another growing use case for real-time payments is bill payment. In fact, Truist recently launched a bill pay solution for the RTP network that leverages an alias-based Request-for-Payment platform. This enables the solution to utilize the roughly 150 million existing mobile and email tokens to protect user data.

While this service is available to consumers, large corporate billers are the primary target audience for Truist’s platform. For these organizations, real-time payments offer several advantages—such as immediate acknowledgment of payment receipt, which can dramatically speed up the reconciliation process. In turn, faster access to funds can improve overall liquidity and cash flow management.

Not Ready for Retail

All of these use cases have dynamically expanded the scope of the RTP network. However, there has been much speculation about when real-time payments networks will take on a larger role in the U.S. retail payments landscape—much like Pix and UPI have taken off in Brazil and India, respectively.

Today, the National Payments Corporation of India handles nearly half of the world’s digital transactions, the majority of which flow through its UPI real-time payments system. The roughly 20 billion monthly transactions on UPI not only dwarf RTP, but also surpass leading payments networks like Visa and Alipay.

Several factors have contributed to UPI’s dominance, including support from India’s government and an aggressive expansion strategy. Additionally, many of the economies where real-time payments have surged were previously cash-based, making digital payments a substantial upgrade. In contrast, some have noted that the established financial infrastructure in the U.S. has slowed the adoption of instant payments domestically.

However, an additional obstacle is affecting both RTP and its rival FedNow, limiting their implementation in retail environments. Currently, the networks allow users only to send money, without a request functionality. This limits the scope of these systems because it is often the merchant who initiates the payment request, even when it is the customer who taps their card.

Although RTP and FedNow may not yet be ready for full retail deployment, adoption of both systems is rapidly accelerating. This suggests that new use cases and functionalities are likely to emerge in the near future.

The post RTP Tops Single-Day Record with Over 1.8 Million Transactions appeared first on PaymentsJournal.

A Compass Coffee location in Washington, D.C. became the first store to accept a bitcoin payment using Square’s new point-of-sale system.

Square Bitcoin enables merchants to accept bitcoin payments with zero processing fees and also allows them to convert traditional card sales into bitcoin within the included wallet. Compass Coffee tested Square’s platform and successfully completed transactions from 10 different wallets over the Lightning Network.

These payments were processed using the standard Square device—a mainstay for many small businesses. While the coffee purchase itself may have been small, it represents another meaningful step forward for bitcoin and the broader adoption of digital assets.

“This is super cool, and it lines up with everything we’ve been talking about here at Javelin—Layer 2’s, Lightning Network, and reward programs,” said Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research. “Square continues to be a leader in payments by providing optionality. It’s pretty awesome to see this stuff unfold right in front of us, and I think more companies will follow.”

Gaining Mainstream Traction

For over a decade, there has been ongoing discussion about when bitcoin payments would finally achieve mainstream adoption. One of the concerns surrounding bitcoin and other cryptocurrencies has been their volatility. Yet, despite short-term fluctuations, bitcoin has continued to surge to new heights, largely driven by increased adoption among leading financial institutions.

In addition, broader platforms are emerging to facilitate bitcoin transactions. For example, Walmart-backed OnePay recently added crypto functionality, and PayPal launched a crypto platform enabling merchants to accept payments in over 100 cryptocurrencies while allowing consumers to connect wallets from platforms like Coinbase Wallet, MetaMask, and Kraken.

Copying the Strategy

One of the key factors across these platforms is flexibility. Accepting payments in crypto doesn’t mean merchants are required to hold digital assets. For example, Square’s business owners can choose to either accept crypto payments or hold digital assets as a store of value.

Given bitcoin’s success, the latter option can be a game changer. Many companies have integrated bitcoin investments into their business models—a strategy most notably employed by MicroStrategy, which later rebranded as Strategy.

“There have been dozens of digital asset treasury companies trying to copy Strategy’s strategy hitting the market,” Hugentobler said. “It shows there is a demand for institutions to hold this stuff on their balance sheets—and this process allows for them to do it in a different way.”

The post Square’s Platform Sees First Bitcoin Payment at Coffee Shop appeared first on PaymentsJournal.

As artificial intelligence plays a growing role in purchasing decisions, Visa is launching its Trusted Agent protocol to give merchants more visibility into the process.

In the emerging agentic commerce environment, merchants will need the ability to screen AI agents and filter out bots and bad actors. Visa’s platform was developed to enable exactly that—using agent-specific cryptographic signatures and other unique identifiers.

These identifiers can convey information about an agent’s intent, such as details about the products being sought or evidence of prior interactions between the consumer and merchant. Visa’s system can also determine whether an agent has payment functionality compatible with a merchant’s preferred checkout methods.

The Continued AI Emergence

Visa underscored that this solution was necessitated by the continued rise of AI in retail transactions. The company cited data from Adobe showing that generative AI traffic increased by 4,700% year over year as of July, with most consumers who have used AI reporting that it has improved their shopping experience.

These trends have driven more companies to deploy AI across an array of use cases. For example, Klarna teamed up with Google to leverage its AI models to create personalized visuals and customized marketing campaigns within Klarna’s app.

Shepherding the Agents

Agentic commerce takes this a step further, giving AI agents the power to initiate and complete payments. This has naturally raised concerns about the safety and security of agentic transactions.

In Google’s Agent Payments Protocol (AP2)—another framework designed to shepherd AI agents—safeguards are implemented through the use of mandates. These digital contracts securely verify that an AI agent has followed a user’s instructions, including detailed data about the parameters and timing of a purchase.

Regardless of the specific protocol, security and fraud mitigation controls are necessary for agentic commerce to advance. This presents a challenging task: beyond detecting bots and fraudulent activity, these systems must also minimize false positives—while maintaining full transparency for both consumers and merchants throughout the process.

The post Visa Aims to Safeguard Agentic Commerce Transactions appeared first on PaymentsJournal.

As the race to build the infrastructure for artificial intelligence agents heats up, Klarna has announced support for Google’s open-source Agent Payments Protocol (AP2), a neutral framework designed to connect merchants, consumers, and third-party platforms to enable agent-driven commerce.

AP2 supports multiple payment types, including debit and credit cards, stablecoin transfers, and real-time payments. However, it’s not clear how Klarna’s signature buy now, pay later services will integrate with the framework.

Individualized Shopping

The announcement follows last week’s news of a broader partnership between Klarna and Google Cloud aimed at enhancing personalization across Klarna’s platform. Under the collaboration, Google’s AI models will help create tailored visuals for Klarna’s e-commerce offerings and power customized marketing campaigns.

Personalization and hyper-personalization have been effective use cases for AI, and the technology has seen widespread implementation. With the continued growth of e-commerce and digital payments, companies have more access to consumer shopping and transaction data.

While once the domain of the largest merchants such as Walmart and Amazon, AI-driven personalization tools are now being adopted by smaller merchants to better understand customer preferences and deliver individualized recommendations.

In AI Agents’ Domain

Agentic commerce goes beyond personalized recommendations, placing the entire transaction process within the domain of AI agents. It has become a high priority for many of the world’s largest financial services firms, with both Visa and Mastercard introducing their own versions of the technology.

Google’s AP2 aims to serve as the foundational infrastructure—or rails—of this emerging ecosystem, and the tech giant has made significant progress toward that goal. In addition to Klarna, Google has attracted support from companies including Mastercard, American Express, PayPal, Alipay, Coinbase, Etsy, and Intuit.

Yet despite this momentum, questions remain around the security and liability implications of agentic commerce—particularly when transactions go wrong. There’s also debate over whether consumer demand for AI-driven shopping experiences will be broad enough to justify large-scale investment in the supporting infrastructure.

Still, few doubt that AI will become an increasingly integral part of how people discover, evaluate, and complete purchases.

The post Klarna Leans Further Into Agentic Commerce appeared first on PaymentsJournal.

For years, tech and payments leaders have called for financial institutions to modernize their core banking systems. However, the meteoric rate at which payment technologies have evolved has caused many financial institutions to struggle to identify the optimal components of a modern payment stack.  

In the Unpacking The Modern Payment Stack: What Matters Most for Banks report, Matthew Gaughan, Payments Analyst, and James Wester, Co-Head of Payments at Javelin Strategy & Research, examined the many layers that make up a payment stack and offered financial institutions insights for developing their modernization road map.

The Heartbeat of the New Paradigm

The elements of a modern payment stack are increasingly defined by the technologies that power them. This includes innovations like event-driven architecture and cloud-native infrastructure, but the heartbeat of the new paradigm is the application programming interface (API).

“A modern payment stack should provide the functionality to expose and consume customer-permissioned financial data via standardized restful APIs in a modern payment stack,” Gaughan said. “Banks and financial institutions will utilize these APIs to either build, modify, or launch new products, usually in a more streamlined manner.”

“They might be owned by the bank, or they might be provided by a core banking provider, but they let the bank be more nimble and more able to adjust pricing and use different routing logic and settlement depending on the type of payment rail. It takes a system that was static and makes it more dynamic and able to respond to the emerging payment rails that are on the top of customers’ minds.”

The layers of this modernized system can also be categorized by their function, the vendor ecosystem associated with them, and the value they bring in powering the next generation of payment solutions.

Some of the key characteristics of these technologies are that they are composable, open, and interoperable. This flexibility is critical for banks that are increasingly under pressure to provide instant settlement, and it is one of the elements propelling the emergence of event-driven architecture.

“Event-driven architecture allows banks to respond to real-time triggers and different data flows—as opposed to how it was done in the past, when payments were processed in batches, typically at a much slower pace,” Gaughan said. “It allows the system to asynchronously communicate with all these different systems.

“Batching payments will probably never go away, but this allows for assembling your payment stack in a way that allows for more efficient payments and allows you to respond to emerging types like real-time payments.”

Leading the Charge

Like APIs, cloud computing has been a revolutionary technology for organizations over the past few years, and it is also a critical component of a payment stack. Although many terms are used to describe how cloud technology is deployed, such as cloud-based or cloud-enabled, an optimized payments stack should be cloud-native.

“Cloud-native architecture is built entirely for the cloud, and it’s deployed on a scalable, containerized, and service-oriented infrastructure,” Gaughan said. “Similar to event-driven architecture, I think the through line to all this is to be more dynamic, but it allows banks to better respond to when there’s payment volume spikes across all their different systems.”

This need for adaptable technologies has been driven, in part, by the emergence of real-time payments. Consumers and businesses increasingly expect transactions to settle in real- or near-real-time, 24/7 and 365 days a year. Financial institutions must have technology that allows them to accommodate payments on a rolling basis and provide as seamless a process as possible.

Beyond being cloud-native, banks should also modularly structure their payment stacks, something many legacy core systems could not achieve. Many conventional systems were built using mainframes and monolithic architecture, which is effectively a single large code base for an entire application. This rigid system did not allow for asynchronous communication between disparate systems, even within the same company.

An optimized payment stack is oriented in a composable way that allows different components to be integrated, replaced, or scaled independently. This also makes the system flexible, interoperable, and open.

While creating this type of platform requires many technologies, one of the most important aspects of a modern payment stack is the people who implement it.

“Above all, none of this would be possible without the developers,” Gaughan said. “Banks are becoming more developer-oriented, but this still rings true with payments. Many of those next-generation payment solutions wouldn’t be possible without the developers leading the charge behind them. To create this system, all these layers must be undergirded by a developer-oriented culture.”

Signaling New Opportunities

With so much tech focus, many banking leaders may be inclined to leave payment modernization to their tech teams. However, the benefits of a modernized payments stack can reach much further than a systems upgrade.

“These aren’t just tech things happening in an IT vacuum. They’re directly related to the future business outcomes at these banks,” Gaughan said. “I think making that clear is important, so leaders and decision-makers recognize the benefits of these different parts of the payment technology stack. They’re part of a broader modernization strategy, but they could translate into real returns and help you increase operational efficiency.”

Modern payment stacks can lower costs for institutions because of their ability to scale based on volume. Additionally, they can work in concert with other systems to route payments more efficiently based on certain criteria.

Installing a composable modular core allows a financial institution to handle transactions based on the type of event that is triggered, in the most efficient manner. Once implemented, a streamlined tech stack can have dramatic impacts across the organization.

The operational efficiency gains can be significant, but there can also be key improvements in a bank’s risk and compliance operations. A modern payment stack makes it easier to link fraud, compliance, and risk systems with payments where these processes had previously been siloed.

“APIs can also signal potential growth or revenue opportunities within a business,” Gaughan said. “Banks will monitor the metrics associated, but developers can see which API is getting the most calls and how third-party developers are using them. Banks might be able to further monetize the APIs for other corporate clients or different banking services that are embedded directly into the ecosystems that their partners facilitate.”

Ultimately and Inevitably

Despite the benefits of a modernized payment stack, many financial services leaders have often elected to invest their funds into more customer-facing initiatives. However, an optimized payment stack can have a significant impact on customer retention and growth, especially as real-time payments raise consumer expectations.

“That level of speed and seamlessness in a transaction is becoming table stakes, and banks are going to need to be able to handle this,” Gaughan said. “The banks that modernize their payment stack set themselves up to offer the type of solution that their customers are looking for. It helps banks find their spot as a customer’s primary provider of banking or financial services.”

Many financial institutions have begun to feel the pressure to modernize and are unsure of the next step. However, the benefits of a modern payment stack make moving forward worthwhile.

“Modernization is not about a destination, it’s the journey—which sounds cliché—but these types of investments set you up for the next generation of payment technology, which ultimately and inevitably is going to be something that your customers are expecting of you,” Gaughan said.

The post How Emerging Technologies Are Powering the Modern Payments Stack appeared first on PaymentsJournal.

Leaders from the world’s largest economies developed a roadmap to improve cross-border payments four years ago, but those objectives now appear unlikely to be achieved.

A progress report from the Financial Stability Board (FSB) found that, although many milestones have been reached, the measures taken so far have yet to translate into real-world results. In fact, key performance indicators for cross-border payments have improved only marginally over the past two years.

The FSB noted that Group of 20 (G20) nations are likely to miss their target of making cross-border payments more efficient and transparent by 2027, citing the complexity of coordinating among numerous countries and the challenges involved in modernizing payment infrastructures.

A Longstanding Issue

The improvements achieved so far have been mostly related to speed. The FSB noted progress in the overall speed of wholesale payments and remittances, meaning that those who rely on financial support from family members abroad are now receiving funds more quickly. However, the initial goal set by the G20 leaders was for 75% of wholesale and retail payments to be credited within an hour of being made.

Additionally, the costs of cross-border payments—a longstanding issue—are still too high. One of the original goals set by G20 countries was to reduce the global average cost of retail payments to below 1%.

Unfortunately, not only have cross-border payment costs failed to fall below this threshold, but in some cases, they are actually rising. For example, the FSB reported that peer-to-peer payments in sub-Saharan Africa are the most expensive and the costs have increased to roughly 4% per transaction, up from 3.2% in 2023.

The Final Leg

To address these issues, the FSB called for significant overhauls to many countries’ payment infrastructures. Two of the main challenges with cross-border payments have been selecting the correct payment route at the outset and ensuring the payment reaches the recipient in the final leg of the process.

Regarding the issues in finalizing transactions, the FSB underscored the significant variations across regions. In addition to currency differences, banks often face differing regulatory frameworks, anti-money laundering laws, and Know Your Customer requirements that they must navigate.

The FSB called on regional and local leaders to take practical steps to revamp their domestic processes in alignment with international policies, noting that such reforms could not only improve the cross-border payments experience for citizens but also stimulate economic growth.

The Need for a Standard

There’s also a need for a standardized cross-border payment protocol. Such a standard could go a long way toward reducing complications arising from differing regional regulations while also helping to mitigate fraud risk.

There have been several attempts to build this network, such as the platform developed by global messaging system Swift. Swift’s infrastructure connects the financial institutions in the correspondent banking network with a standardized framework for communication.

Under the correspondent banking model, each bank establishes partnerships with foreign institutions in a complex web that can involve multiple intermediaries. This system, built on convoluted processes, often leads to the delays, high costs, and lack of visibility that have come to define cross-border payments.

Searching for a Solution

While Swift’s network has been instrumental in accelerating the current model, the emergence of new technologies has led many to call for a new paradigm. Some have pointed to digital assets—particularly stablecoins—as a potentially better solution for cross-border payments, since they can be transferred immediately over secure blockchain networks.

Several competing cross-border payment systems have also emerged in recent years. Visa and Mastercard have leveraged their global credit card networks to create networks that are effectively a more efficient version of the correspondent banking system.

Visa Direct and Mastercard Move are connected to financial institutions worldwide, and these networks have the liquidity and foreign exchange capabilities to serve as compelling alternatives for cross-border payments.

There are also networks created by fintechs like PayPal and Circle that link global payments players. For example, PayPal World connects digital payments systems like India’s UPI and China’s WeChat Pay—rather than local financial institutions—through PayPal’s network.

While it is unclear how this fragmented landscape will evolve, relief from cross-border payment inefficiencies doesn’t appear imminent. The FSB noted that, as G20 nations are unlikely to meet their 2027 targets, global leaders will soon have to decide whether to extend the deadline or develop a new strategy.

The post G20 Likely Won’t Meet Goals for Improving Cross-Border Payments appeared first on PaymentsJournal.

As more small businesses feel the pressure to adopt emerging technologies, Square is expanding its offerings with bitcoin payment capabilities and enhanced artificial intelligence tools for merchants.

Square Bitcoin enables merchants to accept bitcoin payments with zero processing fees and also allows them to convert card sales into bitcoin. The service includes a built-in wallet, giving business owners the ability to manage their crypto holdings alongside their other financial activities—all within the same dashboard.

Additionally, Square is upgrading its AI assistant to deliver more targeted insights—such as data on weather, news, and customer reviews. For example, the AI assistant could suggest inventory adjustments for a clothing store based on upcoming weather trends.

Leveraging the Tech

The continued integration of AI into organizations has become a priority for many leaders looking to harness the technology’s potential. Yet even as small businesses increasingly adopted AI, many are still uncertain about how to use it to its fullest advantage.

While business insights and fraud protection are common applications, , one of the most impactful ways merchants can leverage AI is by integrating it into their customer service operations. To that end, Square’s AI solution is built to answer all incoming calls—even during peak hours—streamlining the ordering process and enhancing the customer experience.

The Best of Both Worlds

While Square’s AI platform is designed to deliver efficiency gains, its bitcoin platform is focused on improving the customer experience through greater payment flexibility.

According to Square, the number of U.S. shoppers using cryptocurrency payments is expected to grow by 82% over the next two years. This comes after a banner year for digital assets, during which bitcoin soared to new heights and blockchain technologies became increasingly entrenched in mainstream finance.

While stablecoins have captured much of the limelight in recent months—thanks to high-profile launches and the recent passage of stablecoin-specific legislation in the U.S.—bitcoin continues to hold strong. The flagship cryptocurrency has gained momentum following its inclusion in multiple bitcoin exchange-traded funds (ETFs) in the U.S. and similar investment vehicles abroad.

Despite its success, one of the main criticisms of using bitcoin in retail payments remains its volatility. However, with solutions such as Square’s, business owners can choose to either hold or convert their bitcoin directly within the platform. This flexibility gives merchants the best of both worlds—allowing them to use crypto both as a store of value and as a payment mechanism.

The post Square Adds Bitcoin Payments and Upgrades AI for Small Businesses appeared first on PaymentsJournal.

India’s Unified Payments Interface (UPI) is launching a feature that allows users to approve payments using a fingerprint or facial scan.

Previously, shoppers were required to enter a PIN to authorize transactions. However, the Reserve Bank of India (RBI) has requested an alternative authentication method to make UPI transactions faster and more secure for users of its real-time payments system.

Biometric authentication will be available to users who choose to opt in, and their data will be stored in Aadhaar—a system operated by India’s government.

Benefits and Challenges

The biometric verification movement has gained traction as consumers have grown comfortable with the technology through frequent use on mobile devices. Biometrics can also greatly reduce friction at checkout, streamlining the payment experience.

Beyond convenience, biometric authentication offers the potential to reduce fraud—a key factor driving its launch in UPI. The RBI noted that numerous UPI scams have cropped up to exploit the existing PIN-based authentication system, underscoring the need for stronger security measures.

Despite these advantages, several challenges remain. Consumers must first be made aware of the program and choose to opt in. Additionally, merchants and payment processors need to have the proper infrastructure in place to support biometric transactions.

There are also ongoing concerns about the protection of consumer data. The National Payments Corporation of India (NPCI)—which operates UPI—emphasized that each transaction will be “independently verified by the issuing bank using robust cryptographic checks.”

The NPCI further noted that while creating a PIN for UPI previously required entering debit card details, no card will be needed when opting into the new biometric program.

Moving Beyond Pilots

At this stage, many biometric pilots and projects have been launched around the world, but few have reached widescale implementations.

This is why the UPI launch represents a significant step for biometric authentication in payments. UPI processes roughly 20 billion transactions per month, and the NPCI accounts for nearly half of the world’s payments.

One of the main reasons UPI has grown into such a global powerhouse in just seven years is its relentless drive to introduce new features and functionalities—and to expand into new regions.

The post UPI Is Set to Add Biometric Authentication for Real-Time Payments appeared first on PaymentsJournal.

There’s hardly a discussion about the future—of business, technology, or society—that doesn’t include artificial intelligence. With so much noise surrounding it, some may be tempted to dismiss AI as just hype. Yet, it has the potential to be the transformational innovation it’s promised to be—provided organizations have the right people, processes, and infrastructure in place.

In a recent PaymentsJournal webinar, Nick Botha, Global Payments Sales Manager at Autorek, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed the state of AI in the payments industry, outlined a roadmap for companies still evaluating its role, and shared a new AI-powered playbook for financial institutions.

Two Lessons Ahead

As organizations of all shapes and sizes race to implement AI, many still struggle with too many unknowns. This is especially true in the financial services industry, where highly regulated institutions have concerns about privacy and bias issues that have been identified in AI.

Because of these concerns, many financial institutions have taken a cautious approach toward AI. This has created a new challenge: the fear that the organization is falling behind in implementing one of the most powerful technologies of recent decades.

“It reminds me of when I had to teach my kids algebra in eighth grade,” Wester said. “They came to me, and I was like, ‘I haven’t taken this in forever.’ So, I went online and found their text and I was always about two lessons ahead of them and they thought, ‘Wow, you really know a lot about algebra.’”

“There are a lot of people who claim expertise in this and say, ‘I know a lot about AI,’ but really they’re only about two lessons ahead of us on AI,” he said.

Though many institutions are likely not as far behind the curve as they think, some proven use cases for AI have already begun to emerge.

These include areas like detecting suspicious activity and streamlining onboarding processes like Know Your Customer checks. AI also excels at parsing vast amounts of data, making it highly effective for analyzing payments flows to identify opportunities for reducing fees.

In fact, many organizations are now moving from small-scale pilots to widescale implementations—a shift that is accelerating every day.

“It’s almost a bit of a revolution,” Botha said. “Like the internet revolution of maybe 30 years ago, where it went from a nice-to-have to a must-have. We’re getting to that stage where you see something being applicable to so many different industries in such a short space of time. It’s going to be interesting to see how the payments space adapts and adopts the key benefits of AI.”

The Name of the Game

To illuminate the current payments landscape, Autorek conducted a survey that highlighted a common theme: a persistent overreliance on legacy systems. Roughly 90% of respondents reported that they still depend on spreadsheets in the middle and back office.

“It’s not to say that Excel is not a brilliant tool, of course it is,” Botha said. “It’s just hard to understand how this can be considered an enterprise piece of software for payments operations. The reason I say that is because the name of the game in payments. And payments firms typically make their revenues through transaction volumes.”

“Processing very high volumes of data is really where these firms start to benefit, and working off spreadsheets and legacy systems can have a lot of limitations around scalability and flexibility,” he said.

Another issue is that once many organizations reach the limits of what spreadsheets can accomplish, many create additional processes around them to close the gap. These layers of process upon process only exacerbate functions that are already manual and labor-intensive.

One reason many institutions haven’t scrapped this model entirely is that they often don’t see the value in modernizing middle- and back-office processes.

“Instead of making some investments in the software and finding something that’s a better, more efficient way of doing things, it’s just, ‘Well, let’s solve this problem so we can get this box checked,’” Wester said. “We’ll just put in another process, or we’ll bring in one other person who can now add to that process.”

“We’ve been talking about all of the things that we’re going to invest in on the user experience and the front office for so long, and so much investment goes in there,” he said. “Yet, all of these processes that are underlying all of that and that are so important for payment companies just continue to be done on spreadsheets.”

Taking Practical Steps

Although many financial institutions are lagging in payments modernization and AI adoption, organizations exist at every stage of the journey. For those just beginning, there are concrete steps to move forward.

“It’s definitely not too late to start,” Botha said. “Some of those practical steps would be educating and training resources that you have today on how these things work and where they’re going to benefit your organization. In the future, what we’re going to find is that firms are going to be hiring a lot of individuals that have this experience and expertise, but that doesn’t mean that you can’t start somewhere within your organization.”

“I did see this interview some time ago, whereby they said it’s not going to be AI that replaces people’s jobs, it’s going to be people that know how to use AI that will be replacing people’s jobs,” he said. “That sits true with me.”

In addition to more robust training programs, organizations should explore incremental AI adoption across various parts of the business. Even small integrations can add up quickly, while also giving organizations the chance to fully understand how AI will affect their operations.

Partnering can also add significant value. For many financial services firms, building AI solutions in-house may not be feasible, making it essential to identify vendors and software providers that can deliver impact.

That said, introducing more third parties and systems can create challenges of its own.

“One of the key things that we find, especially with the inclusion of AI, is the interoperability between systems and partners,” Botha said. “When you are partnering, you’re making those investments, and they are typically very large investments. Just make sure that the interoperability between your systems and processes is there.”

“If you’re buying something that’s going to solve one particular issue, but it creates three or four other issues that sit around it because it doesn’t communicate effectively between different systems and processes and different business units—it’s actually going to create more of a headache,” he said.

The Nature of AI

Many well-run financial institutions may not see the value in rushing into AI implementation. While that may not be an issue now, the game-changing potential of artificial intelligence means organizations shouldn’t dismiss it out of hand.

“AI is transformational,” Wester said. “There is a lot that AI is going to do in financial services. One of the things that financial institutions and payment companies really need to do is be deliberate in the way that they’re looking at it. Don’t just dismiss it. Don’t take a wait and see attitude, understand that this is something that’s big.”

“Put together a team of people—put together the leadership team that’s going to say, ‘OK, where can we use this and where can we derive some benefit?’” he said.

Once an organization explores the benefits, it will often find they outweigh any concerns about AI. This makes now the time to take intentional steps toward implementation.

“The key messages over the last probably 18 months have been talks of AI, crypto, stablecoins, etc.,” Botha said. “In the payment space, it’s kind of at its infancy, so don’t feel like you’re terribly far behind. I haven’t seen many firms that are completely driven by AI within the payments space.”

“I don’t think that you would be terribly far behind if you started today, but if you start in 18 months to 24 months you may be, because it might move pretty quickly. That’s the nature of what AI has to offer.”

The post 2026 and Beyond: Charting the AI Roadmap in Payments appeared first on PaymentsJournal.

Colombia’s new instant payment system, Bre-B, is now live—modeled closely on Brazil’s highly successful Pix and developed in part by the same Latin American payments firm, EBANX.

Early results are promising: more than 30 million people have already registered, representing 76% of Colombia’s adult population. The system also has strong federal backing. Soon, Bre-B will be integrated with Cajas de Compensación Familiar (Family Compensation Funds), which provides social benefits and subsidies to Colombian citizens.

A Favorable Economic Landscape

Colombia’s economy is well-positioned for this new payment method. Its digital economy has been growing at double-digit rates since 2019 and is expected to reach $52 billion this year, making it the third-largest Latin American market after Brazil and Mexico. Latin America, more broadly, is receptive to digital payments: according to Beyond Borders, seven out of 10 Latin American adults have made or received payments through digital channels.

Another factor points to Colombia’s potential for success. It has one of the lowest credit card penetration rates in Latin America, with only 18% of adults having access to credit cards. This could give it an advantage similar to Pix in Brazil, which grew from 68% penetration among adults in 2020 to 90% by 2023. By comparison, credit cards account for roughly 40% of Brazil’s payments market.

Compare and Contrast with Pix

Many of Bre-B’s features were inspired by the Pix rollout, starting with user identification through basic keys like phone numbers and emails. Bre-B has already issued over 80 million of these payment keys. Other similar features include QR code payments, mandatory interoperability for instant transfers, and time-based transaction limits to prevent fraud. 

However, there are key differences as well. While Brazil built a single rail between financial institutions to make Pix interoperable, Colombia developed a new ecosystem for Bre-B on top of its existing payments infrastructure. This approach allowed it to connect established account transfer services while also providing flexibility for new integrations in the future.  

Currently, Bre-B supports only peer-to-peer transfers and consumer-to-business payments. The next step will be onboarding government entities like Cajas de Compensación Familiar, allowing citizens to pay taxes and receive government disbursements through Bre-B. Future plans include recurring payments for subscription-based services and batch transfers for payroll and high-volume payments.

The post Colombia’s Instant Payments System Aims for Pix-Like Success appeared first on PaymentsJournal.

Celebrating the holidays is important to many consumers, but it can also be a source of financial stress. To help ease that burden, PayPal is expanding the capabilities of its buy now, pay later program and introducing cash back rewards on BNPL purchases.

The company launched its pay-in-four installment loans five years ago and added monthly payment options a few years later. Until now, these BNPL offerings were limited to e-commerce transactions. Going forward, PayPal will extend the functionality to include in-store purchases made through its installment plans.

As an added incentive, PayPal is offering 5% cash back on all BNPL purchases—both online and in-store—through the end of the year.

Strained to the Brink

One of the biggest challenges facing holiday shoppers this year is the difficult macroeconomic environment, which has stretched many household budgets to the brink. PayPal highlighted research findings showing that roughly 60% of U.S. consumers are more concerned about their holiday spending this year.

As economic pressures mount, shoppers are becoming more strategic with their budgets and payment choices. Many are deciding where to shop based on where their dollar goes the farthest and are paying closer attention to loyalty programs and rewards. Consumers are also becoming more payments-savvy, opting for payment methods that offer the most bang for their buck.

Considering BNPL for the Holidays

As credit card debt hovers near all-time highs, BNPL services have become an attractive alternative. They typically offer minimal or no fees and often don’t require a credit check.

While BNPL products have been a game changer for many consumers, concerns have emerged about the rising amount of BNPL loan debt that is not reflected in consumers’ credit scores. However, leading BNPL providers like Klarna, Affirm, and Afterpay report that delinquencies are rare—with Klarna noting a delinquency rate of less than 1%.

Despite these concerns, BNPL’s flexibility means that consumers are likely to continue using these services, especially as the holidays approach. PayPal’s research also found that over 80% of shoppers who have used or considered BNPL plan to use it for holiday shopping.

The post PayPal Enhances BNPL Products Ahead of the Holidays appeared first on PaymentsJournal.

Artificial intelligence is changing how people work, but its adoption is not the same across every age group. Some generations are already folding AI and agentic tools into their daily routines, while others are only beginning to explore what these systems can do.

Don’t miss another episode of Truth In Data! Click on the red bell in the lower-left of your screen to receive notifications as soon as the episode publishes.

Data for today’s episode is provided by Javelin Strategy & Research’s Report: 2025 Emerging Payments Survey: Agents Enter the Stage

Business Use of AI/Agentic Tools, by Age

• 22% – 18-24 year old users
• 27% – 25-34 year old users
• 31% – 35-44 year old users
• 21% – 45-54 year old users
• 10% – 55-64 year old users
• 4% – 65+ year old users

Source: Javelin Strategy & Research, 2025

About Report

AI tools and agentic systems are still in their early stages, yet Javelin Strategy & Research’s latest North American PaymentsInsights survey offers one of the first clear snapshots of how consumers are engaging with them. Adoption patterns are beginning to emerge, and while today’s tools will continue to evolve, one point stands out: people are already bringing AI into their routines or are willing to try it. Organizations across the payments space can use this momentum to shape smarter strategies and better understand the audiences they want to reach.

This report highlights the most meaningful findings, outlining how individuals use AI in both personal and professional settings and identifying the trends that signal what comes next. It clarifies what matters, filters out distractions, and presents practical steps stakeholders can take during this early growth phase.

The post What Generation Uses AI for Work-Related Tasks? appeared first on PaymentsJournal.

OnePay has made significant enhancements to its services since Walmart took a majority stake in the company, and now the fintech is expanding further by adding crypto trading to its platform.

According to CNBC, OnePay customers will be able to trade bitcoin and ether as early as this year through a partnership with crypto firm Zerohash. While OnePay has not specifically confirmed the details, if users are able to hold bitcoin and ether in the mobile app, it would likely mean they could also convert their crypto holdings and use the funds to make purchases at Walmart or pay off balances.

The addition  of crypto capabilities represents another major milestone for the firm, which was established by Walmart and venture firm Ribbit Capital just four years ago. Since its launch, OnePay has climbed to become the fifth-ranked free finance app on Apple’s App Store, joining the ranks of fintech heavyweights like PayPal, Venmo, and Cash App.

Adding to Its Repertoire

Although the Walmart connection has certainly fueled the platform’s rapid growth, OnePay was built as an independent company from the retailer, with the goal of extending its reach beyond even Walmart’s substantial customer base.

Like many rival fintechs, OnePay has continued to aggressively add services. The company partnered with Synchrony to issue Walmart’s store-branded credit cards after Walmart recently moved on from Capital One.

OnePay also helped Walmart add buy now, pay later (BNPL) through a partnership with Klarna. Altogether, OnePay now offers credit and debit cards, savings accounts, BNPL, a digital wallet, peer-to-peer (P2P) payments, and even wireless plans.

Importing the Concept

This formidable array of services rivals those offered by China’s super apps, Alipay and WeChat Pay. These unified mobile platforms have become one-stop shops for consumers, often extending well beyond financial services to include features like shopping and messaging.

Many fintech firms are now working to bring the super app concept overseas. Klarna, for example, has continued to expand its product suite with offerings like a debit card and wireless plans. Even Bolt, originally known as a merchant checkout solution, has begun to shift into the super app market.

Similarly, PayPal, Venmo, and Cash App have all introduced features that stretch far beyond their trademark P2P payments. While these fintechs may lack the Walmart partnership that OnePay enjoys, they currently operate more established platforms and boast significantly stronger crypto and digital assets capabilities—at least for now.

The post Walmart’s OnePay Adds Crypto Trading to Its Burgeoning Resume appeared first on PaymentsJournal.

Contactless payments have become the norm in the UK, with data showing that more than half of adults now use mobile wallets.

A study from UK Finance found mobile wallet usage for both online and in-store purchases has increased, with roughly 57% of UK adults using them last year—up from 42% in 2023. 

Mobile wallets are also becoming the preferred option for day-to-day, low-value transactions, reflecting a broader shift in consumer payment habits.

Notably, this adoption isn’t confined to younger generations. While usage is highest among younger adults, significant growth is being seen across all age groups.

A Central Role

As mobile devices have become central to the UK payments landscape, mobile banking has surpassed online banking as the most common way to access accounts. Approximately 75% of UK adults used mobile banking last year—often for more than just checking balances, with many conducting a wider range of transactions.

This growing reliance on mobile banking has also contributed to increased usage of the UK’s Faster Payments network, the country’s real-time payments system.

Faster Payments is the second most-used payment method in the UK, though card payments are still the country’s predominant payment method by a wide margin. Card transactions—including debit and credit cards, whether used physically or through mobile wallets—accounted for roughly 64% of all UK transactions, with debit cards leading the way.

The report also highlighted strong growth in buy now, pay later (BNPL) services: one in four UK adults used BNPL last year, up from 14% the year before.

The Central Hub

Digital payment methods—such as real-time payments, BNPL, and contactless transactions—are reshaping the global payments landscape. At the center of this shift are digital and mobile wallets, which serve as the central hub connecting these payment types.

With smartphones nearly ubiquitous and the simplicity of digital wallets, mobile payments are poised for continued growth. Meanwhile, cash usage continues to decline/ For the first time, cash accounted for less than 10% of all payments in the UK, according to the report.

The post Mobile Wallets Are Shaping the UK Payments Landscape appeared first on PaymentsJournal.

Almost without notice, disappearing payments have shifted from novelty to expectation in small business transactions. A traveler arrives at an airport, books a rideshare, and checks into a hotel—never pulling out a wallet or handing over a card. The transaction happens seamlessly, almost invisibly.

The same technology fueling consumer-facing apps is now within reach for small businesses. Research from Worldpay shows that 90% of small businesses consider embedded finance—the integration of financial services, including payments, directly into non-financial offerings—essential to their growth. In a PaymentsJournal podcast, Matt Downs, Group President of Worldpay for Platforms, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, discussed how technological advances are making small business payments both more sophisticated and less visible at the same time.

“Why are payments disappearing?” asked Downs. “Because consumers want ease. They don’t want to see the friction.”

The Sweet Spot

While they may see the benefit of disappearing payments, a small business faces a different reality than an independent contractor driving for a rideshare company. For small businesses, payments cannot simply vanish into the background. They need visibility and control—both to verify that transactions have been completed and to manage cash flow. Likewise, consumers may prefer that payments remain somewhat visible when dealing with small businesses, so they can make more informed choices based on factors like price or payment size. 

The sweet spot is a system where consumer can choose to dip, chip, or use a digital wallet—without having to rethink that decision every time they pay a small business. For the business, it means having access to a payment process that feels sophisticated yet intuitive, flexible yet low-effort to manage. 

“Building a solution that supports all of those elements is very challenging,” said Miller. “You have to be able to support all the way through the design elements and what the interface looks like, all the way back to the seamless handling of the payment processing itself.”

Integrating into New Verticals

The concept of delivering targeted lending within verticals is not new, but it has not yet been fully woven into the consumer experience. For example, a veterinary office may have offered a financing plan in the past, but it likely wasn’t something a customer could access through the same website where they booked their appointment. For the doctor, providing a lending product with fast approval that integrates directly into their existing systems can become a meaningful competitive advantage.

“If you are a vet, the last thing you want to do is evaluate a bunch of different lending programs and take seven sales calls from seven lending programs to evaluate the right one who can integrate the lending product directly to the patient experience,” said Miller. “The market is looking for a solution that meets the needs with a minimum of risk.”

The beauty of a vertical solution is that it is tailored to a business’ individual needs—whether that business is a veterinary practice, a restaurant, or a dry cleaner. To be effective, the software provider must understand the workflow, revenue streams, and nuances of the business, no matter how niche.

Payments have evolved not only by becoming more complex, with more options for both payers and payees, but also by becoming increasingly specialized for the unique requirements of each business type.

“That’s a whole new spin on finance,” said Downs. “Fifteen years ago, there were pretty good payment options out there for retail and restaurants, although they were pretty expensive until the cloud drove the cost down. But that also allowed more entrants to come in and say, ‘Hey, I want to solve use cases for veterinarians or food pop-up trucks.’”

The specialization adds complexity to the process, making an embedded payment solution more of a necessity.

“In an ever-evolving landscape of payment acceptance options, the number of merchants who are actually able to manage that on their own and make decisions to add or not add or build in the integrations is vanishingly small,” said Miller. “The idea that a platform is better situated to manage that complexity and that change is kind of a slam dunk.”

Building Through AI

Artificial intelligence is an important component of these new platforms. It helps companies better understand their customers’ needs and plays a key role in driving technological development.

“It allows room for new entrants to come in and shake up weak software companies that weren’t good at understanding their customers at their core,” said Downs. “It’s going to challenge them. It’s going to have an effect on who the winners and losers are in this space. But in the end, the small businesses and consumers will win because they’re going to get better served.”

Embedding AI directly into products gives merchants access to the insights that can transform a business. While AI requires large amounts of data, integrating it into a platform allows businesses with limited data to benefit from powerful analytics. For example, a small vet clinic may not have enough payment data on its own clients to accurately assess risk profiles—but AI can change that.

While small businesses aspire to be sophisticated payment processers, they also don’t want a separate piece of software for the front office, another for the back office, a standalone banking suite, and so on. This has given rise to the notion of the “everything platform,”—software designed to help companies meet all of their processing needs in one place.

With advancements in AI and technologies that can connect and integrate multiple platforms, the ecosystem is now ripe for embedded payments to support small businesses. Very few merchants are capable of managing their payments independently while deciding which integrations to adopt. Embedded payments allow their processes to remain not only customized but also state-of-the-art.

“We take the heavy lifting, the operations, the payments, the financial underwriting, liability, everything that comes with adding more on,” said Downs. “We take that off the software company with a goal of just making sure it works for businesses and the consumer.”

The post The Invisible Checkout: Embedded Payments Transform Small Business appeared first on PaymentsJournal.

Artificial intelligence has become embedded in the shopping experience, and new collaborations between OpenAI and Stripe are expanding the technology’s role in payments.

First, ChatGPT’s U.S. users can now make Etsy and Shopify purchases directly on the platform. For example, once a shopper engages with the AI interface to explore a product and refine their search, they can confirm shipping details and pay using Apple Pay, Google Pay, Stripe, or a credit card—without ever leaving ChatGPT.

Second, Stripe and OpenAI are working together on an open-source Agentic Commerce Protocol (ACP). The goal is to build the infrastructure that allows merchants, consumers, and developers to integrate AI agents into the shopping journey.

Continued Advancement

These initiatives highlight the ongoing momentum behind the agentic commerce movement, which has picked up steam in recent months. Perplexity announced its Pro subscribers can now pay directly within its chat using PayPal or Venmo, a model similar to the one ChatGPT and Stripe are rolling out.

Meanwhile, Google introduced Agent Payments Protocol (AP2), an open-source protocol designed as a framework to support agentic AI. The framework accomodates multiple payment types, including debit and credit cards, stablecoin transfers, and real-time payments.

Continued Questions

As agentic commerce platforms continue to emerge, questions have risen about the role of AI and AI agents in the e-commerce landscape. The most pressing question is how these platforms are safeguarding against errors and fraud.

In Google’s AP2, for example, the tech giant uses mandates—digital contracts that verify the AI agent has followed its directives—to help protect payment data. In the ChatGPT and Stripe model, Open AI explained that all orders, payments, and fulfillment are managed directly by merchants through their existing systems, with ChatGPT acting only as an intermediary to relay data between users and merchants. 

Beyond security, there are also questions about how these platforms will leverage the data they collect and whether AI models will remain unbiased and natural in their interactions. For example, if a user consults ChatGPT about a particular item, some may wonder whether the chatbot would steer the shopper to Etsy instead of a competing marketplace.

OpenAI addressed this concern in a blog post, noting that product results are organic, not sponsored, and ranked according to relevance for the user. The company also noted it will charge merchants a nominal fee for completed purchases. 

The post OpenAI and Stripe Launch Agentic Commerce Initiatives appeared first on PaymentsJournal.

Global messaging hub Swift has spent decades building a global system for cross-border payments, and now it plans to launch a blockchain-based solution incorporating digital assets.

In collaboration with roughly 30 global financial institutions, Swift is developing a shared digital ledger designed to be interoperable with existing blockchains, including those supporting stablecoins, tokenized deposits, and central bank digital currency (CBDC) transactions.

The platform is envisioned as a secure, real-time record of bank transactions, leveraging smart contracts to enforce compliance. Its ultimate goal is to enable real-time cross-border payments.

Checks and Balances

The costs and inefficiencies of cross-border payments have long been a challenge—one of the key reasons Swift has achieved such a strong global presence. The organization has built a network that connects over 11,000 banks across 200 countries.

By providing a critical layer of communication, Swift helps streamline a cross-border payments model that has traditionally depended on manual checks and balances. While Swift has improved the correspondent banking system, persistent challenges remain. Regulatory nuances, currency conversions, and compliance requirements continue to drive up costs, cause delays, and heighten fraud risks.

A Stronger Solution

Due to these issues, digital assets are increasingly seen as a stronger solution for international transactions. Among them, fiat-based stablecoins have emerged as the leading contender, since most cryptocurrencies are highly volatile, while CBDCs and tokenized deposits have yet to gain meaningful traction .

Blockchain-based stablecoins enable secure transactions, and their decentralized infrastructure allows payments to be sent globally in real time. Another key differentiator is that they don’t require a bank account—unlike many cross-border networks, including Swift’s.

Although Swift’s network is designed to connect with—rather than compete against—stablecoins and existing blockchains, the cross-border payments landscape is becoming increasingly crowded.

For example, PayPal and Circle now offer both stablecoins and cross-border payments networks that connect financial services firms. Additionally, Visa and Mastercard have launched substantial cross-border payments networks that leverage their global presence.

Many banks are also developing their own digital assets solutions with potential cross-border capabilities. This includes JPMorgan Chase, which has considered issuing its own stablecoin and has launched a digital assets division under its Kinexys brand.

Despite this growing competition, Swift hopes to leverage its established network to maintain a prominent role in the ecosystem. The organization is also relying on its many partner banks to drive continued innovation. For example, several banks collaborating on its new blockchain-based system include HSBC, Deutsche Bank, and JPMorgan Chase.

The post Swift Is Creating a Blockchain-Based Platform for Cross-Border Payments appeared first on PaymentsJournal.

As more fintechs expand their digital offerings, Bolt is preparing to launch a platform positioned as an all-in-one super app.

Originally founded as a checkout solution for merchants, the company has faced shortfalls and leadership changes. Now, it is pivoting into the digital wallet space, where it will face stiff competition from leading financial services players.

The super app is set to include digital banking, crypto trading, and peer-to-peer payments, among other features. It will also incorporate agentic commerce powered by an artificial intelligence agent that can shop, make recommendations, and complete purchases on behalf of users. To further drive engagement, the platform will integrate a rewards program directly into the app.

Not a Novel Concept

The super app model is not a novel concept. Platforms like China’s Alipay and WeChat Pay have long offered unified solutions that combine users’ financial lives with non-financial services such as messaging.

Bolt is not alone in its ambitions to bring a similar approach to the rest of the world. Buy now, pay later (BNPL) leader Klarna recently signaled its intentions to beef up its app into an all-encompassing platform. It has steadily added financial services, forged partnerships to extend its footprint, and even launched mobile phone plans in the U.S.

A Fragmented Space

Interestingly, Klarna also recently inked a deal with Bolt to integrated its BNPL service into the websites of merchants using Bolt’s checkout platform, CheckoutOS.

With the super app launch, Bolt now finds itself in direct competition with Klarna—as well as several others. Both PayPal and Block have added substantial features to their platforms aimed at keeping users engaged within their ecosystems.

This creates a challenging competitive environment for Bolt, which has previously struggled to hit its targets and justify its valuation.

“Bolt’s adjusted strategy has it expanding horizontally as a consumer wallet that travels across merchants and will support stablecoins, etc., but the digital wallet space is just as crowded for consumers as the checkout space is for merchants,” Don Apgar, Director of Merchant Payments at Javelin Strategy & Research told PaymentsJournal. “It’s hard to tell whether this is a cohesive strategy or just a larger product roadmap that attempts to justify the $14 billion valuation.”

The post Bolt Makes Bid for Super App Dominance appeared first on PaymentsJournal.

The Swift messaging system has long been a central player in improving international transactions, and the network now has its sights set on streamlining retail payments.

This retail push marks a shift for Swift, which has traditionally been used for larger intrabank or business-to-business payments. After collaborating with roughly 30 banks across 17 countries, Swift is rolling out new rules aimed at ensuring greater transparency and efficiency in retail cross-border payments.

Under the updated guidelines, Swift said retail users will benefit from transactions that are faster than the benchmarks set by Group of 20 (G20) countries, with roughly three-quarters of payments reaching the beneficiary bank in under 10 minutes. The system is also designed to eliminate hidden fees and, where possible, use domestic real-time payments systems to facilitate instant settlement.

The Correspondent Bank Model

There has been a surge in demand for cross-border payments as global communications channels have expanded. However, the process remains largely dominated by the longstanding correspondent banking system, in which banks hash out their own partnerships with overseas counterparts.

These partnerships can involve multiple intermediaries, making transactions in this model a slow and often convoluted process. Adding to the complexity are the manual procedures that define these relationships, which create the opportunities for delays, errors, and fraud.

“There’s a concept called nostro and vostro where you’ve got banks that have pots of cash with one another,” Hugh Thomas, Lead Commercial & Enterprise Payments Analyst at Javelin Strategy & Research, told PaymentsJournal. “The nostro is mine that sits with you, and vostro is yours that sits with me. They just sort of net and pool at the end of every day and figure out, ‘OK, you’ve got this much more vostro with me and I’ve got this much more nostro with you as a consequence of us having done these transactions.’ Those are, in many cases, manual processes.”

In the end, banks in the correspondent banking system must often rely on trust, assuming that each institution in the chain is doing its part.

Getting Payments to the Finish Line

As a messaging network, Swift’s role has been to streamline communication between financial institutions. This has had a significant impact, especially on what Swift describes as the “in-flight” portion of a transaction—though this stage represents only about 20% of the total time for an average cross-border payment.

The bigger challenge lies in the final leg, after the payment exits the Swift network. This stage is far more time-consuming, with roughly 80% of transaction time spent navigating regional nuances like regulations, fees, and domestic infrastructure.

Looking for Alternatives

Although Swift’s new framework could smooth many aspects of the cross-border payments process, many of these issues are likely to persist. This is why there have been many alternatives that have been proposed as cross-border solutions.

Visa and Mastercard have already built robust global networks to support their credit cards, and they are now leveraging these systems to—in effect—create a better version of the correspondent banking system. These platforms, dubbed Visa Direct and Mastercard Move, connect to banks around the world and have the liquidity and foreign exchange capabilities to become a compelling alternative to correspondent banking.

Other contenders for cross-border payments market share are crypto and digital assets, which allow for seamless, secure, and transparent transactions across a blockchain. Due to the lack of volatility, fiat-backed stablecoins such as those offered by Circle and Tether have established a strong use case in cross-border payments.

There are also a growing number of networks that connect domestic infrastructures, such as PayPal World. Instead of connecting financial institutions, this solution connects digital payments systems like India’s UPI and China’s WeChat Pay with PayPal’s ecosystem.

Preserving Its Role

Although there are more cross-border payments systems and solutions than ever, Swift continues to play a critical, well-established role. The network is actively upgrading its platform and, later this year, will require participants to utilize the ISO 20022 protocol, which dramatically increases the amount of data that can accompany payments.

This enhancement could drastically reduce delays cause by incomplete payment instructions and potentially save organizations millions of dollars in costs associated with delayed or failed payments.

In parallel, Swift is piloting digital asset transactions on its network, aiming to bridge the gap between decentralized and traditional finance.

Together with initiatives such as its new rules for retail cross-border payments, these developments are likely to reinforce Swift’s role in the global payments landscape. Still, it remains uncertain whether one solution will emerge as the standard for international transactions—or if cross-border payments will continue to be a fragmented market.

The post Swift Develops Rules for Retail Cross-Border Payments appeared first on PaymentsJournal.

The National Payments Corporation of India (NPCI) handles almost half of the world’s digital transactions, primarily through its Unified Payments Interface (UPI) platform, and its reach continues to expand.

According to India Today, there were just over 20 billion UPI transactions in August alone—far surpassing Brazil’s formidable real-time payments system, Pix, which processed roughly 6 billion monthly transactions last year. Overall, UPI now handles more daily transactions than Visa’s global network and China’s Alipay super app.

A key reason for UPI’s rapid growth—considering the platform was only launched in 2018—is the bold strategy implemented by India’s officials. The platform has secured partnerships with leading payments players such as Google and PayPal, while continuously enhancing its functionalities.

Interoperable and Global

UPI is now accepted in various forms in France, United Arab Emirates (UAE), and Singapore, among other countries. The latest expansion comes through a partnership with Qatar National Bank (QNB), enabling UPI acceptance at point-of-sale terminals operated by QNB-acquired merchants.

This partnership means travelers from India—the second-largest group of foreign tourists to Qatar—can pay with UPI at major tourist attractions and Qatar Duty Free outlets, the first merchant to go live on the platform.

While this expansion will likely ease travel-related issues like currency exchange for travelers, the move represents UPI’s ongoing strategy, with the ultimate goal of creating a truly interoperable global payment network, per Ritesh Shukla.

A Muted Reception

Although real-time payments have taken off in regions like India and Brazil, they have received a more muted reception in the United States. Both RTP and FedNow have made strides since their respective inceptions, but still process only a fraction of UPI’s volume.

One of the main hurdles to broader adoption is that the networks are still largely receive-only, meaning they aren’t fully suited for widescale merchant applications. While in India it is common for users to scan QR codes to purchase everyday items using UPI, the use cases for FedNow and RTP have largely been relegated to business-to-business transactions.

The post UPI Strengthens Global Payments Dominance appeared first on PaymentsJournal.

As the subscription model becomes a mainstay of the consumer economy, users are becoming more discerning about what they sign up for. In fact, many are now hesitant to subscribe to a service unless they know they can easily cancel it.

According to research from Chargebee,82% of respondents said they were more likely to subscribe if cancellation were straightforward. In addition, 79% said the ability to pause a subscription was important. And people are using that feature: more than half of respondents reported pausing a subscription at some point—suggesting that consumers are more likely to stay longer if they have the flexibility to step away temporarily.

New Tools for Flexibility

That same appetite for flexibility extends to cost. More than two-thirds of consumers said they would prefer usage-based pricing models for their subscriptions. Nearly as many said they would switch to a hybrid model, such as a flat fee combined with overage credits, if it was offered.

What’s more, the highest-value subscribers are often the ones who want that flexibility the most. Chargebee found that nearly half of respondents fell into a segment it calls “anxious spend optimizers.” These consumers spend more than average, but also question the value they’re receiving and are quick to leave if their needs aren’t being met.

The research also supports the use of personal financial management (PFM) tools, which give subscribers more control and visibility over the services they’re paying for. These tools help consumers track their subscriptions and ultimately deliver the value they’re seeking.

“Everybody can benefit from having that full picture,” said James Wester, Co-Head of Payments at Javelin Strategy & Research said in a PaymentsJournal podcast. “Everybody has a lot of subscriptions, especially now as we start unbundling things like cable and cell service and everything else. Being able to use a tool like that, it does benefit pretty much every consumer.”

Click-to-Cancel Goes Down

Regulatory efforts to make cancellations easier have stalled. Under the Biden administration, the Federal Trade Commission took steps to make subscription cancellation easier with its so-called “click-to-cancel” rule. But, the cable industry, home security companies, and advertisers challenged the FTC in court, arguing that it was trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy.”

In July, a court vacated the rule on technical grounds, and the FTC has not appealed the ruling. That said, as Chargebee’s findings suggest, such a rule may not be as detrimental as the industry groups claim. Many companies have gained subscribers and fostered loyalty by offering a simpler path to cancellation.

The post Subscribers Want Control Before Signing Up appeared first on PaymentsJournal.

The correspondent banking model, which has dominated cross-border payments for years, is—at best—a deeply flawed system. It relies on manual processes, after-the-fact audits, and “trust” in foreign banks’ compliance, despite regulators confirming only 0.0001% of transactions are ever reviewed. And the ability to make a cross-border payment is critically dependent on correspondent banks—their foreign currency reserves and reach. Meanwhile, the rise of new and compelling systems like Mastercard Move and Visa Direct, along with emerging payment types such as stablecoins and real-time payments, while attractive to banks and their customers, have only added further complexity to an already fragmented landscape.

Traditional core banking systems, digital platforms, and supporting infrastructure were never designed to accommodate these new paradigms. As a result, banks remain largely unprepared—not only to manage the heightened risk and compliance obligations they bring, but also to efficiently orchestrate payments across these channels.

Gary Palmer, President and CEO of Payall Payment Systems, told PaymentsJournal that global payments orchestration with specialty intelligence, more than just a global gateway, has become a necessity for financial institutions looking to serve the surging cross-border payments market.

Comprehensive payments orchestration can digitize many labor-intensive processes (not just move money), such as counterparty risk management, real-time transaction monitoring, and multijurisdictional compliance. It can also function as a super switch—an intelligent hub that analyzes payment attributes such as size, commercial activity, or source of funds, B2B vs B2P, desired delivery speed, preferred recipient payment form factor—and routes the payment accordingly. The result? A new paradigm, aligned with new partners, that supports diverse mechanisms used to move funds around the world.

Legacy Bank Systems Weren’t Built for This

When a financial institution enables a transaction from a bank account, it typically delivers the payment across a domestic network. In the U.S., this could mean the ACH network, Fedwire, or even real-time payments systems like RTP or FedNow. These are the networks most core banking systems can interface with, albeit adopting new options like RTP and FedNow isn’t easy for banks or their tech partners.

However, the ways consumers move money from their bank accounts have expanded far beyond simple routing between accounts. For example, funds may now be sent from, or to, an account to a mobile wallet or a digital payments platform—transactions that often fall outside the scope of bank systems, both domestically and internationally.

“How does a bank move money around the world?” Palmer said. “Most financial institutions do this through a correspondent bank, but that introduces complications—different message formats, required data, and rules that must be followed before the payment is handed off to the correspondent bank.”

“The software that exists in core bank systems was never designed for the complexity and ever-changing nature of cross-border payments,” he said.

Another layer of complication in the correspondent banking system is that it relies on the SWIFT global messaging system, where almost all receiving participants are financial institutions.

Yet, since SWIFT delivers messages to member or participating banks for funds delivery to bank accounts, this only reaches 15–30% of the world’s population. Billions of people remain outside, unable to receive funds through banks that use the SWIFT system, they rely on mobile money, digital wallets, or cash to live from day-to-day.

However, each of these payment form factors operates under its own set of rules. Some rules are mandated by regulation, others are imposed by issuers to mitigate risk or fraud, and still others stem from the limitations of the product itself.

“For example, in some jurisdictions, mobile money wallets can’t accept a business-to-business payment; they can only accept a P2P or a retail payment or a remittance,” Palmer said. “Some have minimum payment amounts, some have maximum payment amounts, some have currency restrictions, and they all have different message formats.”

“There’s no such thing as a bank account number when you’re sending money to a mobile money or a digital wallet, so we’re talking about layered complexity and diversity that no bank system was ever built for,” he said.

And even if funds are going to a bank account, if the final leg of the payment journey is a real-time rail or domestic network in the U.S., the bank identifier is the RTN/routing transit number—not the ABA number. Yet for 50 years, every bank in the world has trained customers to ask for the SWIFT code, ABA number, or wire transfer number. But these won’t work for ACH in the U.S. Similar conditions exist elsewhere. How are billions of people retrained? Not possible—software is the key.

A Breakthrough of the Highest Order

As complex as the cross-border environment has become, there have been some recent steps forward. One of the most substantial developments affecting the market has been the emergence of Mastercard Move and Visa Direct—platforms that leverage the global payment rails of these credit card companies.

These solutions fill a gap created by the steady reduction in the number of correspondent banks in recent years. As a result, partnering with one of the remaining institutions has become increasingly costly and time-consuming.

Unfortunately, onboarding is only the first of many challenges facing banks that want to enter the cross-border payments market.

“That’s where you’re talking about issues that are affecting wire transfers, netting and pooling, and figuring out who owes what in what currency,” said Hugh Thomas, Lead Commercial and Enterprise Payments Analyst at Javelin Strategy & Research. “What time did the transaction happen? What were the two currencies doing at that time? Any number of additional layers of complexity that make moving funds back and forth not nearly as seamless as Venmo, or even cash.”

To combat these issues, Visa and Mastercard have leveraged their established infrastructure to create an alternative to correspondent banking.

They are strong competitors because they are already connected to domestic bank transfer rails through their card business. They also hold massive global liquidity across more than 100 different currencies and operate some of the most efficient foreign exchange trading systems.

More importantly, the reach of Visa Direct and Mastercard Move now extends far beyond financial institutions.

“What they have said is, ‘We need to serve everybody on the planet,’” Palmer added. “’This means we’re going to connect this infrastructure not only to the bank transfer rails, but we’re going to connect it to mobile money, digital wallets, and cash disbursement engines.’”

“They say to originating institutions anywhere in the world: ‘You don’t need a correspondent bank, you can connect to us,’” he said. “‘Here are our APIs and operating rules, connect to us and we’ll deliver funds fast to bank accounts, mobile money, digital wallets, and cash.’ This is a breakthrough of the highest order.”

The Promise of Payments Orchestration

Even though Mastercard Move and Visa Direct are game-changing systems for originating institutions, there is a caveat: the institution must be able to connect to these systems. And it’s not just one connection today, Visa and Mastercard offer multiple connection points for different types, routes or other distinctions. 

“They have their own set of APIs. They have their own set of rules that require new software and new capabilities. Before you do that, you need a payment orchestrator who has built the software to comply with the regs, who’s connected into their APIs and is perpetually maintaining that current state of connections because—just like with card issuing and card acquiring—there are periodic changes to the rules and the system, and the participants have to update their software.” 

However, connecting to Mastercard Move and Visa Direct is just one benefit of a robust payments orchestration platform. Payments orchestration consolidates multiple payment types into a single intelligent hub, reducing the need to manage disparate vendors and systems.

This means that payments can be routed intelligently across the safest, most cost-effective channels, creating a better customer experience with less friction.

Leading payments orchestration platforms also incorporate risk controls, fraud defense, and regulatory alignment. Additionally, they provide tools to support counterparty risk management, real-time monitoring, and compliance procedures.

Among all these benefits, one of the most important aspects of payments orchestration is that it brings options. This could mean enabling a new currency, a new recipient form factor, or expanding into a new country. It also gives institutions the freedom to send one-off payments of all sizes and types.

“A payment network that we’re connected to may say, ‘We handle B2B payments, not P2P,’ so it’s the type of payment that needs to be routed,” Palmer said. “Taking a step deeper, some correspondent banks won’t support certain industries. Maybe it’s gaming, maybe it’s chemicals manufacturing, or pharmaceutical manufacturing. Having software logic that allows for the interrogation of the data associated with the originator to make sure that you route it to the partner who supports the payment becomes important.”

Redundancy, Always-On Service

With the global contraction of correspondent banks, financial system instability in some regions, de-banking by correspondent banks of originating institutions, and geopolitical complications, redundancy is another key feature of payments orchestration. It’s not optional—it’s survival. The complex nature of the correspondent banking system means a bank’s relationships will likely shift over time.

“Financial institutions around the world often struggle to secure an American correspondent bank, and the process is costly,” Palmer said. “Even then, many lose those relationships within six to twelve months and must start the process over.”  

“A payment orchestrator like Payall helps address this problem. We can support an institution’s existing correspondent bank relationship while also providing access to alternatives such as Mastercard Move, Visa Direct, or other partners. This creates redundancy and ensures there is always a backup path for payments,” he added.

Such platforms can also enable intelligent switching in cases where a customer prioritizes speed over cost, routing the payment across the network that delivers it the fastest. Alternatively, the size of the payment may determine which rail it should travel on.

Given these complexities in the global payments landscape, building an effective solution from scratch has become nearly impossible. Even connecting to Mastercard Move or Visa Direct can cost a bank millions and take months to implement.

And even then, connections to correspondent banks will still need to be established in many cases. Each of these connections carries cost and time requirements—both of which can be significantly reduced by leveraging a payments orchestration platform.

 “A specialist in global payment orchestration with software built specifically for this purpose delivers significantly greater efficiency and simplicity for the originating institution,” Palmer said. “It’s a superior product that offers redundancy and reaches 90% to 95% of people worldwide.”

“It provides a financially competitive solution with low overhead for risk management and customer service investigations, and it is cost-effective to implement and operate,” he added.

The post Global Payment Orchestration = Redundancy, Options, Profits, Happier Customers appeared first on PaymentsJournal.

In the United States, digital wallets are often associated with big tech firms like Apple and Google. However, the European Union has launched a new program that could not only lay the foundation for government-issued wallets but also be the blueprint for widespread global adoption of digital identification programs.

As Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, detailed in the report Digital ID Adoption Requires Digital ID Acceptance: How Payments Can Lead the Way, the EU digital wallet mandate is one of many forces driving the momentum behind digital IDs. More important, this movement has created a significant opportunity for payment providers to gain traction in a competitive market.

A Good Gauge

In addition to the mandate that governments institute digital wallet and digital ID programs, the European launch has a notable factor. By next year, EU merchants, government agencies, and other organizations will be required to accept digital IDs in daily operations.

This means the EU will soon have a comprehensive program in place.

“That’s a big deal; that suggests the direction,” Miller said. “So far, what that has resulted in is a bunch of pilots that have gone through various processes, because the deadline is 2026, not 2025. They’re working through various questions: How does it work? What are the standards? What are the problems?

“What you’ll have by the end of that is a pretty good body of evidence to look at if you are in some other area of the world—say, the United States—and are interested in seeing what happens when you have widespread availability and widespread acceptance.”

Although the EU’s program will be a compelling case study, it won’t be fully applicable to the United States because U.S. lawmakers aren’t likely to mandate digital ID issuance or acceptance. Still, the EU’s efforts could shape the standards that eventually emerge worldwide.

For instance, a global company may have significant operations in the European Union and the United States. Once it shifts its policies and procedures to accommodate the various formats of EU digital wallets next year, it would likely push for standards to govern its U.S. operations.

Across many industries, but especially in the travel sector, initiatives have increasingly sought to implement global standards. It follows that the technical standards for how digital ID systems operate are likely to converge and create global norms.

“That’s not to say that will happen next year, or that the U.S. will unilaterally adopt the EU standards,” Miller said. “That’s unlikely to be what happens, but the directions that are being chosen (by the EU) are likely to be influential. If you wanted to know what things might look like three to five years down the road in the United States, this is a good gauge.”

U.S. Progress

However, just because the United States isn’t likely to legislate digital ID adoption and acceptance doesn’t mean there hasn’t been substantial progress.

Across a series of reports, Miller has tracked the status of digital identification programs state by state. He found that many states have launched new programs or expanded the functionality of their digital IDs since last year’s report.

The launch process for U.S. digital IDs typically begins with a state-issued mobile app that is then added to the leading wallets such as Apple, Google, and Samsung.

For example, California issued a DMV wallet app several years ago but just this year added the capability for the digital ID to be included in Apple and Google wallets. Similarly, Arizona’s digital ID was compatible with Apple and Samsung wallets but only recently added support for Google.

All told, the report found that nine states expanded their digital ID programs in various forms since last year’s study.

“2025 saw pretty substantial growth, and as I project this forward, I think 2026 is likely to see continued growth at that pace or even a little bit faster,” Miller said. “There are a bunch of programs that were backed up by states dealing with the pandemic and its aftermath, where figuring out your digital ID program was not Job One.

“We’re just reaching the point where states that had lots of discussions are turning those into actual launches. We’ve reached very close to half of all states—that’s not the same thing as saying half of all people—but half of all states at least have issued some form of digital ID.”

Availability, Acceptance, and Adoption

Making digital IDs available is just the first step. As a comparison, the wide-scale adoption of digital IDs is likely to follow a similar path as contactless payments through digital wallets.

The technology that drives tap-to-pay has been around for some time, but for the technology to become ubiquitous took years. Now, the places where Apple Pay or Google Pay aren’t accepted have become the exception rather than the rule.

Digital IDs are at the opposite end of this cycle, where acceptance is the exception. However, over the next two years, most states and people will have a program available to them. This will drive the development and implementation of technologies to facilitate digital ID acceptance at merchants or agencies.

After availability and acceptance comes the final piece of the puzzle: adoption.  Some obstacles stand in the way of adoption, such as building consumer awareness and confidence. For organizations, even if all the tech is available to accept digital IDs at the point of sale, many will wonder if the benefits of digital ID acceptance outweigh the expense.

However, those organizations that take the plunge will have significant advantages, starting with security.

“We think that the acceptance of digital identification is a point-of-sale activity,” Miller said. “You accept it, not always, but oftentimes in conjunction with a purchase. That might be, for example, proof of age when you’re buying age-restricted items, or it could be proof of identity when you are purchasing prescriptions.

“You can imagine a lot of times where you must, in addition to paying for something, also prove that you are the person who is allowed to pay. You can then further layer on top of that the notion of a digital ID plus a payment credential being an even more secure form of that payment credential. That is much further down the road, and people building out the infrastructure that combines these things is further out.”

Payments Can Lead the Way

As organizations develop the technology to incorporate digital IDs, a substantial opportunity emerges for payment companies.

“Payments can lead the way in digital ID acceptance because the infrastructure that is used to capture digital IDs in various transactions is often exactly the same as that which is used to capture tap-to-pay,” Miller said. “In some cases, it may not be exactly the same, but it’s going to need to be integrated with all of the same systems. If you are selling, say, point-of-sale systems, you need to be thinking about adding the capability to accept digital IDs.”

Players in payments have many other considerations as they explore digital ID acceptance. Beyond how a payment type and a digital ID could be integrated together, firms should also explore how they could be integrated with reporting, compliance, or even inventory functions.

Additionally, payment firms will have to consider how the process works at the point of sale, and what training employees will require to ensure compliance with laws and regulations.

The lion’s share of this outreach and education will be left to payment companies. Although state governments will issue digital IDs and merchants will play their part in employee training, building the infrastructure and driving adoption will mostly be beyond their purview.

While this will require additional groundwork for payment providers, the end justifies the means.

“I think that to the extent to which payment firms take the lead in performing that work, they create a market opportunity for themselves, because there will be other non-payment companies that want to try and provide these kind of services as add-ons,” Miller said.

“If you’re a payment company, you can say, ‘Look, this isn’t an add-on, it’s integrated with your system. It’s a feature that is simple to integrate and it’s not adding another company to your portfolio.’ I think that’s the key point.”

The post How Digital ID Acceptance Creates Opportunities in Payments appeared first on PaymentsJournal.

As the federal government nears its deadline for sunsetting paper checks, the U.S. Treasury has begun sending disaster relief payments through FedNow.

The Treasury Department was among the first organizations to go live with FedNow when the service launched two years ago. Now, with the Trump administration’s goal of eliminating paper checks by the end of this month, alternative ways of moving money are essential. Given the urgency of delivering relief as quickly as possible, FEMA checks are a natural fit for the service.

In a prepared statement, Mark Gould, Chief Payments Executive at Federal Reserve Financial Services said: “The ability to receive these types of federal agency disbursements instantly via the FedNow Service will be a game-changer for individuals and businesses, especially in disaster or emergency situations where speed really matters to the recipient.”

The first financial institution to receive an instant disaster relief payment was CB&S Bank in Russellville, AL. A spokesperson for the Fed told PaymentsJournal they could not disclose the timing or amount of the payment, or specify which disaster the funds were intended to address.

Sparking Growth in FedNow

Participation in FedNow will increasingly serve as a key differentiator for financial institutions. Banks that participate will enjoy greater access to emergency funds than those that do not.

To support this transition, the federal government has asked vendors to update their SAM.gov registration with valid bank account information, ensuring that payments are not disrupted as paper checks are phased out. What’s more, individual taxpayers can sign up for Direct Express, a Treasury-sponsored debit card that allows monthly benefit payments to be received electronically.

Getting Up to Speed

The FedNow initiative may help ease some concerns over an administration that has faced criticism for slow disaster relief. Earlier this month, the Associated Press reported that the federal government has been taking more than a month to declare federal disaster areas. By contrast, in the 1990s and early 2000s, it took less than two weeks for a governor’s request for a presidential disaster declaration to be granted.

Local communities have begun taking such matters into their own hands. Earlier this week, the Mississippi River Cities and Towns Initiative, a cooperative of more than 100 river communities from Minnesota to Louisiana, announced a program to deliver assistance to its members within 72 hours of a disaster event.

The post FEMA Moves to FedNow Payments as Government Shifts Away from Paper Checks appeared first on PaymentsJournal.

Artificial intelligence agents’ ability to shop and purchase products on behalf of consumers is set to advance with the launch of Google’s Agent Payments Protocol (AP2).

The protocol is designed as a neutral, open-source framework that enables merchants, consumers, and third-party platforms to leverage the benefits of agentic AI. It supports multiple payment types, including debit and credit cards, stablecoin transfers, and real-time payments.

While giving AI agents full autonomy to shop on users’ behalf may raise concerns, Google is introducing safeguards through the use of mandates—digital contracts that securely verify an AI agent has followed the user’s instructions.

For example, if a user asks an AI agent to buy tickets for the upcoming baseball playoffs, they would sign a mandate detailing the desired price, purchase timing, and other key conditions. The initiator would then sign a separate mandate granting the AI agent authority to complete the transaction once conditions are met.

A Seal of Approval

Although use cases for AI agents continue to emerge, the promise of Google’s protocol would mean little without industry adoption.

On that front, Google has earned a strong seal of approval. It has secured support from credit card giants like Mastercard and American Express, fintechs such as PayPal and Alipay, and crypto companies including Coinbase and MetaMask. Google has also attracted backing from Etsy, Intuit, and Salesforce.

In total, over 60 companies have backed AP2, marking a significant industry-wide collaboration. As with its recent blockchain launch, Google’s goal with AP2 is to provide an open, agnostic framework for the industry.

Building Consumer Confidence

While this backing is noteworthy, questions remain about whether customers will find value in agentic commerce. Mandates can help build consumer confidence in the process, yet AI agents have already been exploited in many cases by bad actors.

In AP2, Google has incorporated safeguards that create an auditable trail, allowing fraudulent transactions to be reviewed. Still, these guardrails may not go far enough to entice consumers to fully hand over control to AI agents.

“Interesting topic and aligns with our recent research on agentic commerce,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Several folks are quoted in this article questioning where liability falls when the agent operates outside its authorized scope: the consumer, the merchant or the card issuer? We took this a level deeper and asked, ‘How does the consumer know who the agent is truly working for? Is the agent delivering the best deal for the consumer or steering the consumer toward purchases where the agent receives a commission from the merchant?’”

“Look no further than the Google search engine where companies pay for placement to appear at the top of the search results, even though they may not be the best answer to what the user was searching for,” he said. “Kudos to Google for taking a leadership role and establishing a framework within which agents can be validated and operate securely, but there are significant business and financial questions that remain for consumers.”

The post Google’s Agentic Commerce Protocol Gets an Array of Backers appeared first on PaymentsJournal.

In a deal that could have far-reaching ramifications for the U.S. financial service industry, Plaid will pay JPMorgan Chase (JPMC) fees to access consumers’ banking data.

Plaid’s aggregation platform connects banks and their customers with third-party services, ranging from peer-to-peer payments and credit score monitoring to crypto trading.

Until now, fintech companies have had unfettered access to banks’ customer data. That will change for Plaid under its updated agreement with JPMC, which establishes a pricing structure for data access and sets clear guidelines for how both parties will protect consumer information.

A Foregone Conclusion

This shift in the financial services paradigm seemed almost inevitable after JPMorgan Chase recently highlighted the increasing number of API requests it receives from fintechs.

JP Morgan Chase reported receiving 1.89 billion requests in a single month, most of them from aggregators. Only a small fraction of these requests were initiated by customers; the rest came from fintechs pulling data for various purposes, including improving their products and marketing.

In addition to the strain on banks’ systems caused by the flood of API calls, JPMorgan Chase has also raised concerns about how some fintechs exploit consumer data. The company noted that opening access to fintechs not only creates potential privacy issues but also exposes banks to increased fraud risks.

The Insights into Why

There has been substantial resistance to both JPMC’s stance on fintechs and its decision to charge fees. The current system—which represents a shift toward the open banking model—has been built on free access to information. Charging fintechs fees could severely hinder many smaller companies’ ability to innovate and compete, potentially leading to greater centralization in the financial services industry.

In an email to PaymentsJournal, Plaid offered insights into why it agreed to pay fees to JPMC. One of the main reasons was continuity—the deal will cement the firm’s long-standing relationship with JPMC and ensure that all of Plaid’s services remain available to the bank’s customers.

While Plaid didn’t provide specifics regarding pricing, it confirmed that there will be no changes to current contracts or pricing as a result of this agreement, and customers won’t face additional fees at this time.

Finally, Plaid emphasized that it still believes consumers deserve the right to freely access and share their own information with whomever they choose. It noted that it will continue advocating for a regulatory framework to be created under Section 1033, even though that rule faces significant challenges.

The post Plaid Agrees to Pay JPMorgan Chase Fees to Access Data appeared first on PaymentsJournal.

Independent Software Vendors (ISVs) and SaaS providers have long viewed healthcare as a rich target for vertical expansion. The market is large, highly regulated, and plagued with inefficiency. Many vendors break into this space by solving one part of the revenue cycle process, such as eligibility checks, claims scrubbing, or denial management. That narrow focus gets them in the door, but it omits the element that connects the cycle from end to end—payments.

Payments are more than a single transaction. It’s the foundation that ties together every part of revenue cycle management (RCM). For vendors already in the RCM space, embedding payments turns a point solution into a growth platform.

Unified Payments = Stronger Revenue

The strain on healthcare finances is clear. Hospitals lose an average of $5 million annually to denied claims, equal to about 5% of net patient revenue.*  Across the industry, providers spent nearly $20 billion in 2022 fighting denials, with more than half of that wasted on claims that ultimately should have been paid.**

At the same time, patient out-of-pocket costs continue to climb, shifting more revenue collection to the front desk, portals, and mobile channels. Healthcare organizations manage much more than co-pays. A hospital, for example, handles reimbursements from payors, vendor invoices for medical supplies, business-to-business transfers with partner organizations, cafeteria and food service transactions, pharmacy sales, and patient payments across dozens of departments.

Payments flow through the entire financial system and addressing only a portion leaves opportunity untapped. Why payments belong in the suite RCM has always been fragmented. One vendor handles eligibility, another automates coding, and a third manages denials. They all approach the same provider from different angles.

Strengthening the Revenue Cycle

An ISV that already plays in this cycle has an immediate opportunity: integrate payments and financial services functionality and deepen the value it delivers to healthcare clients and their patients. Patient and payor payments are a core part of RCM, and they matter enormously to providers. Healthcare organizations also manage vendor invoices, business-to-business transfers, and internal flows such as cafeteria and pharmacy transactions. Together, these represent the full picture of how money moves across the enterprise.

When ISVs address both RCM and the broader payments landscape, they create a more complete solution. Patient and payor collections strengthen the revenue cycle. Vendor and internal payments expand the reach to the entire financial system. The companies that bring these together position themselves as financial partners with staying power. Owning payments creates durability when a platform becomes the rail for money movement, it stops being a feature and starts becoming the foundation of the organization’s financial operations.

Payments are sticky by nature. Once embedded, they are extremely difficult to replace. That durability makes them one of the most powerful levers for long-term growth, extending customer lifetime value and creating room for expansion into adjacent services. This is where the opportunity becomes clear. Providers are looking for partners who can support the entire strategy for how money moves — from patients and payors to vendors and internal services like pharmacy and cafeteria.

The ISV that unifies those flows stops being a point solution. It becomes infrastructure, the layer that healthcare organizations depend on to function.

A Strategic Path Forward

Healthcare providers are under pressure to prove ROI quickly. They care about fewer denials, faster reimbursements, higher collection rates, and more satisfied patients. Payments are the most direct lever that ties technology investment to financial outcomes.

For SaaS companies, leading with payments opens doors to conversations that matter most: how the hospital’s financial system operates and how it can be improved. The path is clear. Start with any part of RCM. Layer in payments. Then expand into becoming the financial foundation for all money flows across the enterprise. That is how ISVs move beyond point solutions and secure their place as long-term partners.

Healthcare’s financial backbone is payments. If a SaaS company can solve even a slice of the revenue cycle, it can also solve payments. Providers are asking for every payment option, from wallets and ACH to buy-now-pay-later and embedded finance. Whoever unifies those flows will not just add value, they will become the infrastructure hospitals rely on.

That is where Elavon comes in. We provide the payment solutions ISVs need to expand into healthcare. By embedding modern payment options into their platforms, SaaS vendors can broaden their offerings, take ownership of provider payment strategies across patients, payors, vendors, and internal services, and position themselves as indispensable. Elavon enables SaaS companies to use payments as the lever for vertical expansion and durable growth in healthcare. Connect with us to learn more.

 *Journal of AHIMA

**ii Fierce Healthcare

The post Expanding Into Healthcare: ISV Growth Through Embedded Payments appeared first on PaymentsJournal.

As the next step in its peer-to-peer (P2P) payments platform, PayPal is launching a feature that enables users to send payment links via text message, email, or direct message.

Within the app, the Links feature lets users enter a payment or request amount and generate a private, one-time link for the transaction. The sender can also add a note before sharing the link through their preferred channel, including chats.

Once the recipient accepts the payment, funds are transferred instantly to their PayPal account. Senders can cancel any requests before they are claimed, and unclaimed links automatically expire after 10 days.

With the Links launch, the fintech aims to attract more customers to its ecosystem.

Increasing Its Focus

Another significant aspect of PayPal Links is that U.S. users will be able to send crypto payments—including bitcoin, and Ethereum—to PayPal and Venmo, as well as other compatible digital wallets. Payments can also be sent using PayPal’s stablecoin, PYUSD, which the company launched two years ago.

Like many of its rivals, PayPal has ramped up its focus on digital assets in recent years. In addition to launching its stablecoin, it also recently introduced its Pay with Crypto service, a platform designed to connect PayPal’s ecosystem with existing crypto wallets from major platforms like Coinbase Wallet, MetaMask, Kraken, and OKX.

The Potential Synergy

One of main drivers behind Pay with Crypto was the need to solve persistent challenges in cross-border payments. To serve the same market, PayPal also launched its own solution: PayPal World.

Through this platform, PayPal and Venmo wallets can connect with global wallets, including India’s Unified Payment Interface (UPI), China’s WeChat Pay, and potentially Latin America’s Mercado Pago.

Although not all of PayPal’s systems are fully integrated yet, Diego Scotti, General Manager, Consumer Group at PayPal underscored the potential synergy between PayPal Links and PayPal World, noting that users could easily share a payment link in conversations with anyone worldwide.

At present, PayPal Links is limited to U.S. users, but the company plans to expand into the UK, Italy, and other markets later this month.

The post PayPal Users Can Send Payments and Requests Via Links appeared first on PaymentsJournal.

Onafriq was built to connect mobile wallets across Africa, and now its customers in the Democratic Republic of Congo (DRC) will also be able to link to Visa’s card network.

The two firms are launching Visa Pay, a cloud-based payments-as-a-service platform that will allow consumers to fund digital wallets via mobile money channels. Powered by Onafriq’s APIs, the platform will effectively connect Visa’s card network to the leading wallets in the DRC, such as M-Pesa, Airtel Money, and Orange Money.

The solution meets strong demand: there are 120 million Visa transactions in the DRC each year. Meanwhile, GSMA Africa projects that the DRC’s mobile payments industry will process $3.85 billion in transaction value this year.

Reach Plus Presence

In a prepared statement, Sophie Kafuti, General Manager of Visa DRC, noted that the partnership “represents our ambition to accelerate financial inclusion in the DRC.”

Financial inclusion has been one of the most powerful benefits of digital and mobile wallets, and a key factor driving their widespread adoption across many regions of the world. In numerous unbanked and underbanked areas, mobile money services often provide the only means for citizens to participate in the increasingly digital economy.

Just the Beginning

In addition to increasing financial inclusion, expansion into Africa aligns with Visa’s global strategy. After the U.S. lagged in passing open banking regulations, Visa shuttered its open banking service in the country.

The open banking model relies on partnerships between lenders and fintechs. Beyond the lack of regulation in the U.S., there has even been talk that some traditional financial institutions could charge fintechs fees for access to customer data. In response, Visa said it would focus its open banking efforts elsewhere, such as in Europe and Latin America.

Africa could also be a prime market for Visa, and the Onafriq partnership could serve as a blueprint for further Visa Pay expansion. Onafriq connects to roughly one billion wallets across 43 nations in Africa, suggesting that the DRC launch could be just the beginning.

The post Visa Connects Card Network to Onafriq’s Mobile Money Infrastructure appeared first on PaymentsJournal.

As open banking and account-to-account payments continue to reshape the payments landscape, more consumers are turning to Pay-By-Bank as a preferred method for completing transactions. This growing adoption reflects shifting priorities in how people manage their money—favoring speed, security, and control over traditional card-based options.

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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Shifting the Balance: How Consumers Are Using Bank Accounts Today

Reported Pay-By-Bank Usage Among Consumers, 2024-2025

• 40% – I have never used pay-by-bank before
• 28% – Recurring bill payments
• 26% – One-time bill payments
• 26% – Online purchases

About Report

Each year, Javelin Strategy & Research analyzes how consumers interact with different payment options, offering a comprehensive view of evolving financial habits. The 2025 survey sheds light on both emerging trends and consistent patterns in consumer payment behavior, helping debit professionals reassess their market outlook and strategic priorities for the year ahead.

While innovation often dominates industry headlines, much of the survey’s data highlights how steady consumer preferences remain over time. The study explores three central areas: how individuals access and use their checking (DDA) accounts, whether interest in real-time payments and other account-linked rails is gaining traction, and how peer-to-peer (P2P) payment activity continues to evolve in share and funding methods.

In an environment shaped by new technologies such as generative AI, agentic commerce, and alternative payment rails, it’s tempting to assume the market is shifting rapidly. Yet, Javelin’s 2025 findings reveal a different story—one of continuity. Despite new tools and innovations, consumers continue to show remarkable consistency in how they choose and execute payments, whether transacting in person, online, or through P2P channels.

The post Top 4 Reasons Consumers Choose Pay-By-Bank appeared first on PaymentsJournal.

The movement to inject agentic artificial intelligence into the shopping experience has taken another step forward.

Mastercard has unveiled updates to its Agent Pay platform while expanding agentic commerce partnerships to drive adoption, including recent collaborations with Stripe, Google, and Ant International’s Antom.

The platform’s reach is also broadening. Mastercard noted that Citi and U.S. Bank Mastercard cardholders will get early access to Agent Pay, with availability extending to all U.S. cardholders by the holiday season. An international rollout will follow soon after.

Driving Organizational Adoption

In addition to the expansion, Mastercard announced new features aimed at driving organizational adoption of Agent Pay. These include a developer toolkit that enables integration of AI agents with Mastercard’s APIs, as well as a consulting service to help issuers, acquirers, and merchants get up to speed.

The company is also introducing insight tokens, designed to protect consumer data while delivering a more personalized experience in the agentic commerce environment. In parallel, Mastercard is working with the FIDO Alliance’s Payments Working Group to develop industry standards for this emerging technology.

The Magic of Agentic Commerce

Implementing standards and protections is key to the broader adoption of agentic commerce. Consumers may feel comfortable consulting AI platforms like ChatGPT or Perplexity during the shopping experience, but entrusting the entire process—including payment—to an AI agent will likely cause some reticence.

Despite these concerns, Craig Vosburg, Chief Services Officer at Mastercard, noted the transformative promise of agentic commerce: “Payments must be native to the agentic experience.”

While stronger infrastructure will no doubt go far towards agentic commerce adoption, another obstacle remains: agentic commerce also requires both consumer awareness and active participation.

“In the product discussion that Visa had when they did their product launch talking about agentic, one of the things that resonated with me was it was one of the products where people said, ‘We are going to have to pull consumers along,’” James Wester, Co-Head of Payments told PaymentsJournal. “‘We are going to have to show them and educate them on the magic of agentic commerce.’”

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After years of gradually increasing the limits on contactless card payments, the UK is now considering removing transaction caps entirely.

The current limit on contactless card payments is £100 ($136), and many transactions still require four-digit PIN authorization. If the Financial Conduct Authority (FCA) moves forward with its proposal, both the cap and the PIN requirement could be eliminated as soon as next year.

According to the BBC, the FCA is considering this change to reduce friction at checkouts and to help consumers cope with rising costs of goods and services. Additionally, the regulator noted that removing transaction limits could drive economic growth in the UK—an objective Prime Minister Keir Starmer set when he called for cuts to the country’s red tape last year.

Gauging the Impacts

It is difficult to gauge the impact that eliminating transaction limits on contactless card payments could have on the UK economy. Although contactless payments have become the predominant payment method in the UK, there has been a growing preference for phone-based payments over cards.

Payments made from digital wallets via phones don’t have a transaction limit in the UK. This is because phones have an extra authentication layer, provided the user enables a PIN or biometric authentication on their device.

Since cards lack these protections, regulators have been concerned about the potential for fraud or theft in contactless payments.

These concerns aren’t unfounded, as evidenced by the series of fraudulent purchases at New York-based convenience store chain Stewart’s Shops. After criminals made numerous sizable transactions with stolen cards, the retailer even shut down its contactless payments system across 350 stores.

Carrying the Burden

While some experts noted that a systemwide shutdown at Stewart’s may have been an overreaction, the rising frequency and sophistication of fraud attacks is well-documented. There have even been cases in which bad actors stole card data, added it to digital wallets, and made contactless payments in-store.

Although fraud is always a concern, the FCA emphasized that card issuers—not consumers—would bear the burden of fraudulent transactions. The regulator also said that many lenders allow their cardholders to set their own transaction limits, an option the FCA expects to become more widely adopted.

The post UK Considers Scrapping Transaction Caps on Contactless Card Payments appeared first on PaymentsJournal.

For the second time in less than a year, the Federal Reserve will raise the transaction limit for its FedNow instant payment system. Starting in November, the cap will increase from $1 million to $10 million. As recently as February, the limit stood at just $500,000.

FedNow’s competitor in instant payments, The Clearing House, raised its RTP network payment limit from $1 million to $10 million at the end of 2024.

According to the Fed, the higher limit reflects both the growing need for speed in the payments landscape and the rising demand from business for higher-value use cases. In addition to million-dollar vendor payments, the Fed cited examples such as corporate treasury and payroll transactions. The higher limit will also benefit high-dollar commercial real estate payments, enabling closings on weekends or outside normal business hours.

Confidence in the System

The higher limit reflects growing confidence  in the system’s security. Since instant payments are generally irrevocable, users need assurance that their multimillion-dollar transactions are protected against fraud and other potential pitfalls.

“Users need to be comfortable that the degree on fraud mitigation is at least on par with wire transfers,” said Hugh Thomas, Lead Analyst of Commercial and Enterprise at Javelin Strategy & Research. “The Fed appears to have confidence that if you apply the stress test in a worst-case scenario, they could rise to that occasion.”

Skyrocketing Growth

Since going live in July 2023, FedNow has experienced a strong growth trajectory. It processed 2.1 million payments in Q2 2025, up 62% from the previous quarter. The average payment exceeded $115,000, resulting in an average daily value of money moved of $2.7 billion—an increase of more than 400% year over year.

Nevertheless, FedNow remains a distant second to RTP, which reported 1.18 million payments per day in Q2, with a total daily value of $481 billion. That’s nearly triple the figure from the previous quarter.

FedNow currently has more than 1,400 participating organizations across all 50 states. In addition to raising its transaction limit, FedNow is actively working to encourage more institutions to enable send capabilities, as the majority of the 1,400 financial institutions on the platform remain receive-only.

The post FedNow Transaction Limit Will Match RTP at $10 Million appeared first on PaymentsJournal.

Ireland’s three largest banks are once again joining forces to develop a rival instant payments app to counter Revolut. The new service, Zippay, will launch early next year and be available to the banks’ five million eligible customers.

AIB, Bank of Ireland, and PTSB are backing the initiative, and other financial institutions—such as credit unions—are being encouraged to join the system as well.

Zippay will allow customers to send, request, and split payments of up to €1,000 per day using their contacts’ mobile numbers. The underlying infrastructure will be developed by Italian payment technology provider Nexi.

Skirting Regulatory Issues

Customers will not need to download a new app to use the service. By integrating it into the banks’ existing apps, the project avoids the regulatory complications that scuttled the previous attempt.

In 2020, the same three banks, together with KBC Bank Ireland, launched a project called Synch to develop a standalone payments app, Yippay. That effort was abandoned in 2023 after KBC Bank Ireland’s closure and additional requirements from the Irish Central Bank, which would have delayed the rollout by at least a year. By relying on the banks’ existing apps, Zippay will not require new approvals.

The initiative mirrors the evolution of payment apps in the U.S. After Venmo’s launch and subsequent acquisition by PayPal, seven major U.S. banks collaborated to create Zelle. The three main Irish banks now hope to replicate that model’s success.

Revolut’s Ambitious Plans

In Ireland, the banks’ fintech competitor is Revolut, which has more than 10 million customers in the UK alone and operates in over 40 countries. It holds a significant share of the local payments market, but that hasn’t been enough to satisfy its ambitions.

Revolut was granted a banking license last year, yet it still hasn’t received approval to operate as a full-fledged financial institution. It’s limited to holding £50,000 in total customer deposits and operates as an e-money entity rather than a bank. This means the fintech’s UK customers aren’t protected by the government’s Financial Services Compensation Scheme, which insures deposits up to £85,000 if a bank fails.

Another potential competitor for Zippay is SEPA Instant, which has been available to consumers in Ireland since January. Developed by the European Commission and European Central Bank of their own solution, SEPA Instant offers cross-border money transfers of up to €100,000 in 10 seconds or less.

The post Irish Banks Announce Payment App to Compete with Revolut appeared first on PaymentsJournal.

After receiving approval from the Reserve Bank of India in June, Amazon has completed its acquisition of fintech Axio in a deal some have valued at $200 million.

Axio had previously facilitated buy now, pay later services in India for Amazon Pay. The fintech will now be a fully owned subsidiary of the world’s largest e-commerce platform.

Founded 12 years ago, Axio has built its portfolio around digital credit and money management offerings for consumers and small businesses. The firm has served roughly 10 million customers to date, which makes the Axio purchase one of Amazon’s largest deals in India.

A primary objective of the acquisition is to increase financial inclusion in one of the world’s most important markets. Mahendra Nerurkar, Vice President of Payments at Amazon, underscored that only 1 in 6 consumers in India has access to financing at checkout and that “growing access to credit is a fundamental priority for Amazon.”

Enhancing the Reach

The acquisition should enhance the reach of Amazon Pay, which has struggled to gain significant traction in India. According to data from the National Payments Corporation of India, Amazon Pay was the ninth-largest service by volume on India’s Unified Payments Interface.

The Axio purchase should also help the company expand Amazon Pay Later, its BNPL service. Separately, Amazon has also secured approvals from the Reserve Bank of India to issue payment wallets and sell insurance policies on its online marketplace in India.

On the Docket

Amazon’s acquisition is part of retailers’ continued entrenchment in financial services. Last year, Walmart became a majority owner of fintech One, which it later rebranded as OnePay. OnePay has been instrumental in the retailer’s new BNPL and credit card offerings and is likely due for a larger role in Walmart’s financial services strategy.

Additionally, Walmart and Amazon have reportedly considered launching brand-specific stablecoins. Launching a stablecoin could have significant impacts for the retailers because it could save Walmart and Amazon billions in transaction fees while enabling instant and transparent payments.

However, this news caused a stir among many financial services firms. If the two largest retailers in the world launched stablecoins, it could divert billions of dollars from the traditional financial system.

There has been no confirmation of the Walmart or Amazon stablecoin plans, which means brand-specific stablecoins aren’t yet visible on the horizon. However, expanding their financial services scope is clearly in play for many of the world’s leading retailers.

The post Amazon Acquires Axio, Expanding Its Financial Services Scope in India appeared first on PaymentsJournal.

Gen Z is the consumer cohort every B2C company is fixated on today. But what sets them apart isn’t just their digital fluency—it’s their insistence on choice. From the syrup in their morning coffee to how they consume entertainment—whether binge-watching, scrolling through short-form clips, or tuning into live-streamed gaming—this generation refuses to settle for a one-size-fits-all approach. And it’s not just about choosing—it’s about choosing the extra. A quick scroll through social media reveals viral “extra-hypes” that capture Gen Z’s appetite for indulgence, whether it’s a smoothie packed with creamy almond milk, organic strawberries, avocado, and sea moss, or 24K gold-coated chicken wings that scream luxury on Instagram.

In a Sea of Payment Choices, Credit Cards Win with Gen Z

When Gen Z pays for whatever is trending, they often reach for a credit card. Despite the relentless wave of new payment innovations, young consumers are embracing the enduring appeal of the card. As of Q4 2023, 84% of credit-active Gen Z consumers in the U.S. held at least one credit card (bankcard)—a sharp increase from 61% of Millennials at the same age a decade earlier. And true to form, when they choose, they choose big. Many Gen Z consumers skip the starter card altogether and go straight for premium products—case in point: the American Express Platinum at $695 per year. As Stephen Squeri, CEO of American Express, put it, “Years ago, we used to target them with a fee-free product.” That was then. Today, Gen Z and Millennials account for 75% of Amex’s new Platinum and Gold consumer accounts.

Customization Over Pre-Packaged Banking

The demand for choice extends beyond luxury purchases—it applies to banking, too. FinTechs like N26 have already caught on, allowing customers to customize their banking experience, selecting from different plans and payment cards. Meanwhile, many traditional banks remain stuck in the past, offering rigid, predefined account packages—a checking account, a banking app, a debit card—with little to no room for customization. If banks want to stay relevant, the future may lie in flexibility. Imagine a world where instead of assigning consumers to pre-set categories, banks allow them to choose their preferred card—a virtual card, a standard plastic card, or an “extra” metal card. Given Gen Z’s clear preference for premium, offering a metal card option isn’t just a gimmick—it’s a strategic move. As Emily Rueth, founder of Vicuse Payments Advisors LLC, notes, “premium metal materials for the physical card … elevates them to status symbols, evoking a sense of exclusivity rather than ubiquity.”

Choice Isn’t Just Consumer-Centric—It’s Profitable

Beyond consumer appeal, offering customization in banking isn’t just about experience—it’s about revenue. Studies show that personalization in banking reduces churn, increases engagement, and can drive annual revenue uplifts of 10%. And let’s not forget: the average U.S. consumer holds four credit cards. With over half of surveyed Americans stating that card design influences what type of card they choose to use on a regular basis, giving customers the option to choose an “extra” card could be the key to securing top-of-wallet status—instead of being just another card buried in the stack. For banks, the message is clear: If Gen Z demands choice, why not give it to them?

The post Gen Z: The Generation That Chooses—And Chooses the Extra appeared first on PaymentsJournal.

Perplexity’s newly launched artificial intelligence web browser, Comet, was previously available only with a $200-per-month subscription or a special invitation, but now PayPal and Venmo users will gain early access.

Much like ChatGPT, Perplexity created a chatbot platform that users can query to receive detailed answers along with source links. Comet incorporates this functionality into a web browser that also includes an AI assistant. According to Ryan Foutty, VP of Business at Perplexity, the AI agent is akin to a “personal shopper and personal assistant all in one.”

The two firms are leveraging an existing partnership, as PayPal recently gave Perplexity users the capability to purchase products and services directly within the platform. This means a user could chat with a Perplexity AI agent about a theme for an upcoming birthday party, then make purchases without leaving the platform.

The Agent Is Everywhere

The PayPal release stopped short of specifying whether this same functionality would exist within Comet, but the agentic commerce model is gaining significant traction. Visa and Mastercard have launched platforms through which AI agents are designed to be virtual personal shoppers.

However, Mastercard’s Agent Pay and Visa’s Intelligent Commerce platforms have the autonomy to make payments.

“In this vision, the agent is everywhere,” Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, told PaymentsJournal. “It’s making your life easier; it’s saving you time; it’s relieving you of the burdens of your side of any transaction. It can find items for you to purchase, it can choose merchants for you to purchase from, and it can select which form of payment you wish to use at any given point in time. There’s a lot behind that vision, and many technical aspects will have to be addressed for a system like that to operate.”

Market and Regulatory Risks

These technical aspects are likely a reason Perplexity and PayPal haven’t unlocked full-blown agentic commerce yet.

However, the partnership could still provide substantial benefits for both companies. In addition to Comet access, PayPal and Venmo users will also receive a free yearlong subscription to Perplexity’s premium tier, Perplexity Pro. The fintech aims to leverage these offers to drive users to its new subscription hub, where they can view, manage, and pay their subscriptions in one place.

These offers will likely draw more users to PayPal’s platform, a feat Perplexity also hopes to achieve, as the AI firm trails ChatGPT and Google’s Gemini significantly. Similarly, the Comet launch pits Perplexity against Google Chrome in what is likely another uphill battle. So far, those odds haven’t deterred Perplexity. The company recently made an ambitious, unsolicited offer to buy Chrome for $34.5 billion, an offer far lower than the leading browser’s valuation.

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After a successful trial run in the United States, Klarna is bringing its debit card to Europe. The move comes amid reports that the buy-now, pay-later giant is also refocusing on the initial public offering it postponed earlier this year.

Since the Klarna Card launched in July, Klarna says 685,000 U.S. customers have signed up for the it. The company’s growing portfolio of card-based products now accounts for 10% of Klarna’s global payment volume.

As a result, Klarna is rolling out its debit card to customers in 10 European nations, including France, Italy, Spain, and Sweden. It plans to expand across markets such as Denmark and Germany in the near future.

The Klarna Card, facilitated by Visa Flexible Credential, allows users to toggle between services such as BNPL, credit, and debit, all with a single card. For BNPL users, the card offers flexible options such as Pay in 3, Pay Later, or longer-term financing for larger purchases.

“The success of the card demonstrates the flexibility that consumers seek in payments,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “The consumer can make the decision to run the transaction as a debit or utilize the BNPL functionality of Klarna. This is a play from the largest BNPL vendor to capture everyday spending typically reserved for traditional debit and credit cards. Both Europe and the U.S. are heavy card users, so I’m expecting success in Europe, particularly where debit cards are strong.” 

Ahead of the IPO

The European launch is the latest aggressive strategic move by Klarna, which also this week unveiled plans for a second attempt at a New York IPO. In April, Klarna postponed its IPO plans over concerns about how the Trump administration’s tariffs would affect global markets.

But now the Swedish fintech has announced a revamped IPO through which it hopes to raise as much as $1.27 billion. That would imply a valuation for the company of $12.5 billion to $14 billion.

A Series of Bold Partnerships

It’s the culmination of a busy year for Klarna, including several partnerships designed to expand the company’s reach and profitability. Some of the highlights:

• February: The company arranged to bring BNPL to JPMorgan’s merchant network.
• March: Klarna brought BNPL options to DoorDash.
• April: It made pay-in-4 options available to American users of eBay after a successful trial in Europe.
• June: Klarna launched a series of mobile phone plans in the United States as part of a “super app” strategy.
• August: It sold off $26 billion in BNPL loans to the student loan servicer Nelnet. 

The post Klarna’s Debit Card Is Headed to Europe appeared first on PaymentsJournal.

When a traveler books a hotel through an online travel agency (OTA) like Expedia, the OTA pays the hotel some or all of the value of the booking, but the OTA may or may not have been paid the full value of the booking by the traveler. The amount the traveler is willing to pay upfront to secure the booking, and the amount the hotel will insist on receiving upfront from the OTA to hold the room, are functions of their perceived potential risks and rewards at the time of booking. By pricing based on certainty of travel, OTAs have become a tool for travelers and travel providers to hedge risk, in part through payment authorization and payment timing.  

This need for variable timing and commitment of funds has created a durable use case for virtual cards as the instrument OTAs use to push funds to travel providers. Their ability to authorize for one amount and settle for another, as well as pay suppliers on day 1, then pay card providers on day 45, allows OTAS to manage final payment amounts automatically and bridge gaps in working capital.

However, as Hugh Thomas, Commercial & Enterprise Lead Analyst at Javelin Strategy & Research, sets out in the report The Virtual Economy: Measuring Buyer Industry Receptiveness to Using Virtual Cards, these sorts of cash management and automation challenges are not unique to online travel agencies, suggesting use cases for virtual cards in B2B payments in many other industries.

In this report, and its companion, The Virtual Economy: Identifying Supplier Industries Receptive to Virtual Cards, Thomas offers perspectives on other industries where virtual cards may be poised for a breakthrough based on factors like cash management, the need for automation, and vendors that already accept cards, setting out a new way for banks and networks to uncover use cases.

Not as Intuitive as Its Predecessors

Early card applications for B2B payments were fairly straightforward. Products like travel and expense (T&E) cards had a clear purpose and use, enabling staff to travel on business without reaching into their own funds. As the notion of spending with a card issued to a company became more broadly accepted, use expanded to indirect spending on things like maintenance, repairs, and operations, areas where purchasing cards, with strict controls on purchase amounts and locations, empowered other employees to pay on behalf of the company without raising purchase orders.

“You’ve got people on your staff that you need to go visit a customer, or you need to pick up some tools and cleaning materials,” Thomas said. “You don’t want them to go out of pocket, you don’t want to spend employee time raising purchase orders, and you’d like to manage those expenses and gain whatever benefit you can gain—from some chunk of whatever the bank itself is gaining by issuing the cards—in the form of things like rebates. So these things are fairly intuitive.”

With the emergence of virtual cards, businesses are now looking at card networks for making all kinds of payments, up to and including direct purchases of goods and supplier payments, leveraging card networks’ ability to message that a transaction is authorized, then later settle it. Cards also allow buyers to pay suppliers faster, then use card cycles to hang on to funds longer before they pay the card provider. Virtual cards also come with controls; such cards have maximum transaction limits, set within the parameters of what the business estimates the purchase order will cost, and virtual card numbers can also be set to work only for a given vendor or vendor industry.

“It’s only good to be used to make payment to that one supplier, conceivably on that day,” Thomas said. “It’s got all the benefits of a card wrapped on top of it, the recourse to charge back if you don’t get what you said you were ordering, and so forth. Now you have a solution that has a bunch of benefits to it, but also a bunch of costs to it where you need to be conscious of where the thing is best applied—and that is not something that’s immediately intuitive.“

Shortening the Payment Cycle

Delving deeper into using virtual cards as purchasing cards uncovers more use cases.

For example, a business may have a vendor it doesn’t plan to work with on a long-term basis. Instead of going through the typical know-your-supplier or know-your-customer checks, the company could simply pay the vendor with a virtual card.

This way, the business doesn’t give the vendor any banking information, avoids creating purchase orders, and eliminates significant costs in the process.

“The business case for cards begins to expand, and as that happens, you come to realize it shortens the payment cycle time and thus begins to get used even more broadly,” Thomas said.

Everyone Has Exigencies

As the B2B use case expands, it becomes clear that virtual cards are not simply an X-that-does-Y product.

To identify some of the best fits for virtual cards, Thomas used the OTA industry as a blueprint. He identified the defining traits of the target market for virtual cards. One characteristic he discovered: a high number of potential vendors.

“There’s a vast number of vendors for any OTA business,” Thomas said. “The number of vendors is basically equal to the number of hotels, car rental companies, airlines, and train companies in the world. Whatever they book, that’s a potential vendor to them, so the numbers are obviously in the millions. High volume seems to be something that drives this use case.”

Another characteristic of virtual card candidates is they require flexible and potentially slow incoming payments or, conversely, high days payable outstanding.

Taking the criteria gleaned from the OTA model into account, Thomas began to focus on the industries where virtual cards could make the most impact. What he found was these were often sectors which have complex supply chains, such as home centers, food manufacturers, or general merchandise stores.

“Another is the healthcare business,” Thomas said. “Healthcare payments have to go through so many different parties, and everybody’s got their own, ‘I want to be paid sooner exigencies’ or ‘I want to pay later exigencies.’ It’s obviously a data intensive payment process in healthcare, so it’s a great tool in that respect.”

Selling Opportunistically

For all the promise of virtual cards, businesses have very few resources they can rely on to guide them through the usage of virtual cards. This was the impetus for the Javelin report—to analyze the landscape and predict where virtual cards might emerge next as a solution.

“In all my time working with banks data, what I found was that the characteristics of suppliers being paid with virtual cards was vastly different from bank to bank,” Thomas said. “There were no two banks that looked alike. Now, if you made that comparison for a T&E product or a purchasing card product, the patterns would be very much largely the same.

Thomas notes that with virtual cards, there are some financial institutions that heavily over-indexed in healthcare, some in auto, others that are heavily indexed in utilities, and still others in OTA.

“That, to me, says there’s no uniformity among the banks for a product where everybody’s product is by and large pretty much the same,” Thomas said. “That suggests this is something that water has just begun to find its level on in terms of use cases for virtual cards—and that it’s being sold opportunistically, rather than with an eye to the typical exigencies of the industry in question

“It says that there just is not a common awareness of where it’s best used and how to determine the circumstances of where it’s best used,” he said.

The post Uncovering the Buyer Industry Opportunities for Virtual Cards appeared first on PaymentsJournal.

The Consumer Financial Protection Bureau is pulling back further from the role it has played in recent years, proposing a rule that would limit its ability to supervise nonbanks. Entities ranging from buy now, pay later services to digital wallets would continue to be exempt from the CFPB’s oversight.

“It is essential that the Bureau focus only on the specific categories of products and services that Congress charged the Bureau with overseeing,” the CFPB’s proposal reads. The CFPB was established by the Consumer Financial Protection Act of 2010, before Venmo, Zelle, and Affirm even existed.

The rule specifically limits the types of businesses the CFPB can regulate. As a result, it expects  to designate fewer entities for supervision. The public is invited to submit comments on the proposal by September 25.

Rolling Back the Agency

This move aligns with the Trump administration’s efforts to roll back the CFPB’s powers. Earlier this month, a federal appeal court allowed the administration to proceed with plans to cut more than 80% of the agency’s workforce and cancel the lease on its headquarters.

The CFPB currently has the legal authority to supervise any nonbank deemed to engage in conduct that poses risks to consumers through financial products or services. The Biden administration sought to expand that authority by issuing a rule that would have covered products and services such as digital wallets and payment apps. In the past, the CFPB has argued that entities such as payment apps, which offer services similar to traditional banks, should be subject to the same consumer protections.

Bringing Tech Giants into the Mix

The CFPB always had the authority to oversee firms engaged in international money transfers, like PayPal and CashApp. The Biden proposals would have made Apple and Google subject to CFPB oversight for the first time.

These proposals aimed to ensure that nonbank financial companies handling more than 5 million transactions per year adhered to the same rules as large banks, credit unions, and other financial institutions already supervised by the CFPB. The principal concerns were mounting consumer complaints regarding difficulties in resolving fraudulent charges or recovering missing balances linked to their payment methods. 

A coalition of tech companies filed suit in January, arguing that the likes of Google Pay and Apple Pay were not actually making payments themselves, but rather facilitating them through credit cards stored on the apps. For now, those arguments appear to have prevailed.

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A gig economy marketplace seeking to pay a creator could soon issue payouts via text message, thanks to a new platform from Visa Direct and messaging commerce company Authvia.

However, the potential applications go far beyond the gig economy. According to Authvia and Visa, the platform could allow organizations across industries to send refunds, payments, incentives, and reimbursements.

The platform expands Authvia’s TXT2PAY functionality to include real-time payouts to Visa cards in select markets. Once a recipient verifies their identity and payment details, they can receive funds by SMS directly to their Visa card.

A Critical Operation

Payouts are the lifeblood of many businesses and a critical operation across countless industries. Yet, they’ve often been deprioritized in favor of payment acceptance—especially as new payment methods have emerged.

In healthcare and insurance, this imbalance has left reimbursements and claims heavily reliant on manual, time-consuming processes.

Many of these payouts are still issued by paper check, which can delay funds for weeks. On top of that, paper checks introduce risk: they can be lost in transit, sent in error, or highly susceptible to fraud.

Where Payouts Are Prevalent

For these reasons, many companies in sectors where payouts are prevalent—including healthcare, insurance, automotive services, and the gig economy—are actively seeking ways to make the process more efficient.

This often means shifting away from checks to real-time payment methods. Not only does this reduce time spent on administrative tasks, but it can also positively impact a company’s brand. For example, a real-time payout to a gig worker could go a long way toward keeping that worker loyal and engaged.

However, there are still risks that come with real-time payments, as faster payment often mean faster fraud. SMS and other messaging protocols have been common attack channels for bad actors. There are already many SMS-based “smishing” scams where criminals attempt to manipulate users into sending their payment data or accepting a fraudulent payout.

Despite these threats, real-time payouts could revitalize many industries. This means platforms like Visa and Authvia’s will likely continue to gain traction.

The post Authvia Adds Visa Direct to Its SMS Payments Platform appeared first on PaymentsJournal.

As concerns grow over the relationships between fintechs and banks, Visa will reportedly shut down its open banking services in the United States.

Open banking relies on third-party relationships, where financial technology companies connect banks to each other and to a range of services. These offerings have become essential to the digital banking experience consumers now expect, including everything from credit score monitoring to peer-to-peer (P2P) payments.

As the operator of one of the largest financial networks in the world, Visa is a natural fit to drive open banking initiatives. Indeed, the company sought to acquire one of the largest U.S. fintechs, Plaid, several years ago. However, the U.S. Department of Justice blocked the deal due to antitrust concerns.

Two years later, Visa acquired Swedish open banking platform Tink, in a move indicative of its new open banking strategy. Visa said that once it shutters its U.S. open banking service, it will focus on high-potential markets such as Europe and Latin America.

A Regulatory-First Approach

These regions have become open banking leaders because they have taken a regulatory-first approach to the model. One key difference between the EU and the U.S. is that European regulators have mandated that their banks share data with third parties for free, while the U.S. has left banks and fintechs to negotiate terms privately.

Until recently, U.S. fintechs were able to receive banking customer data for free, like their European counterparts. However, this could change following the news that JPMorgan Chase has considered charging fintechs fees to access customer data. Shortly after, PNC Financial indicated it may follow suit.

Focusing Efforts Elsewhere

These announcements sent shockwaves through the financial service industry because they could fundamentally reshape how banks and fintechs operate. Many smaller fintechs have warned that paying fees to access customer data could make it difficult for them to sustain their businesses.

Chase and PNC, however, have argued that charging fintechs fees has become a necessity to cover the costs of keeping customer data safe. They point to concerns that fintechs could exploit data for their own purposes, which in turn increases risks for banks—who remain ultimately accountable for safeguarding consumers.

There is still uncertainty around how these fees will be implemented, just as questions linger over open banking regulations in the U.S. After the Consumer Financial Protection Bureau finalized its Section 1033 rules governing open banking last year, the regulations hit an administrative roadblock. A revised version is reportedly in the works.

Until these issues are ironed out, Visa—and likely many of its competitors—will continue to focus its open banking efforts elsewhere.

The post Visa to End Its Open Banking Operations in the U.S. appeared first on PaymentsJournal.

Gift cards are thriving, but they are just one aspect of the booming prepaid industry. For example, many consumers may not realize that when they are reloading their account at Starbucks, Target, or Dunkin Donuts that they are essentially purchasing a digital gift card for self-use.

As Jordan Hirschfield, Director of Prepaid Payments at Javelin Strategy & Research, found in the Javelin Prepaid Consumer Sentiment: 3-Year Trend Highlights report, this is just one of the many trends driving the prepaid industry forward.

The study spotlighted upward trends, downward trends, and stable areas. All provide valuable data points for organizations deciding how they should invest in this segment and how they can better reach their customers.

Digital and Physical Equilibrium

Since the consumer sentiment survey was revamped three years ago, Hirschfield has seen several patterns emerge. One of the most-watched trends in the prepaid industry has been the continued prominence of digital gift cards.

As with digital payments, some have assumed that digital gift cards would eventually dominate their physical counterparts. However, this pattern may not hold true with prepaid.

“What’s interesting with digital and physical is it’s never going to be a flip to digital—it’s going to be an equilibrium,” Hirschfield said. “I think the data over three years is showing that there’s been a lot of stability in terms of the number of physical cards and digital cards in volume.”

Retail gift cards are still skewing toward physical cards. There are roughly 3 to 3.5 physical cards sold per person per year compared with approximately 1.5 digital gift cards.

Although these numbers have been steady, signs point to an upward trajectory for digital gift cards. Notably, there has been a substantial increase in load volume on digital gift cards.

Second, it is likely that the number of digital gift card purchases has been skewed. For example, the Starbucks or Target cards that consumers reload often aren’t reported as prepaid purchases because many individuals don’t consider them to be a gift card, per se.

As these statistics become clearer and funds continue to flow into digital gift cards, there is an increasing likelihood of an even digital-physical split.

“That’s how you’re getting to that equilibrium perspective, and that’s where I’m advising people I speak with—it is not an either-or scenario, it is a combined effort, and you need to be focused on it,” Hirschfield said. “Also, not only how does your physical support itself and your digital support itself, but it’s also how do they support each other? You have to be thinking of physical and digital, and the way it’s trending out over three years is as a 50-50 proposition.”

Self-Use vs. Gift Use

Outside of the digital and physical divide, there is also a growing split between those who buy prepaid products as a gift and those who buy them for self-use.

Some of the most popular segments where consumers buy gift cards for others have not seen substantial growth over the past few years. This includes food service companies, mass merchandisers, and apparel shops.

These industries have been relatively neutral, but that isn’t a negative. All of these segments are already in a strong position, so rapid growth isn’t to be expected.

However, several industries are experiencing growth in the gifting segment.

“Where we saw a lot of growth is in travel and entertainment: so hotels, casinos, resorts, theme parks, and airlines,” Hirschfield said. “That—to me—says, ‘That’s a great gift to give where there is no physical gift alternative.’ You can’t really give someone a hotel room, but you can give them the ability to get a hotel room. You can buy someone an airline ticket, but you don’t know their schedule.”

When it comes to consumers who buy prepaid products for themselves, substantial growth has been seen in the fast-food or quick-service restaurant (QSR) category. Interestingly, there has not been as much growth in the coffee segment, likely because many of the larger chains have already leveraged their prepaid programs.

There has also been growth in purchasing prepaid products for self-use from self-care providers, drugstores, and sporting-goods stores. Another segment that has emerged in the past few years is the online gaming and gambling sector.

“Online gaming, such as your Xbox, that is definitely growing, and that is definitely a self-use category,” Hirschfield said. “People who are gamers, that is part of their identity. But people who aren’t gamers just probably aren’t going to give it as a gift as much and aren’t really interested in it. So, it’s thinking about how do I get my user as a gamer to buy more of my prepaid products. That’s a big thing.”

Buying vs. Receiving

Hirschfield also examined the differences between what consumers want to receive as gifts and what they want to give as gifts—and found very different perspectives on either side of the equation.

“What people want are cash and cash alternatives, leading with gift cards,” Hirschfield said. “The No. 1 thing they want is a general-purpose gift card—your Visa, Mastercard, American Express, or Discover—because it’s accessible anywhere. The No. 2 thing they want—year after year—is cash, because cash is usable pretty much everywhere.”

After general-purpose gift cards and cash, recipients want retailer gift cards. This means that gift cards are the most popular choice for recipients by far. Roughly half of consumers would choose some form of gift card if they had only one choice.

However, there is a significant shift from the gift giver’s perspective. Even though cash is desired by recipients, most givers don’t want to give cash as a gift. Gift buyers also have a stronger preference for retailer-specific cards as opposed to general-purpose gift cards.

“The giver prefers a retailer gift card because they want it to seem a little more personal,” Hirschfield said. “But then the other thing, they still prefer to give actual gifts. They want someone to open something and have that experience. Cash doesn’t give you a gift experience. It’s a case of, ‘Hey, you may just go and buy something that’s a need, not a want.’”

A Positive Secondary Gift Carding Experience

However, this preference for giving physical gifts is opening up a new paradigm in prepaid.

“That physical gift is an interesting area for the prepaid industry, because many times that turns into a return, and a return turns into a store credit potentially—especially when it’s been a gift and it can’t go back to the original point of purchase,” Hirschfield said. “That store credit then becomes—in essence—another gift card.”

This trend has been increasing as more stores have loosened their return policies. This means there will continue to be opportunities for merchants to leverage this process because there is a pronounced desire among givers to give a physical gift, whereas recipients still want a gift card.

“How you handle a return is important, and not just by giving them a store credit, but maybe it’s a store credit with a bonus promotion and incentive,” Hirschfield said. “The behaviors are all still there—people who utilize gift cards buy more expensive items and spend more than the value of the card. That’s an interesting thing if you are a retailer or a program manager for gift cards.

“Especially in retail gift cards, it’s having that opportunity to say, ‘How do we make this physical item a positive secondary gift carding experience?”

The post Exploring the Trends Driving the Continued Success of Prepaid Products appeared first on PaymentsJournal.

Amid a post-pandemic tourism slowdown, Thailand is launching an 18-month program to test whether crypto payments can help draw more foreign visitors.

Before COVID-19, Thailand welcomed about 39.9 million foreign international arrivals, generating roughly $58.86 billion in revenue. However, Southeast Asia’s second-largest economy has struggled to attract visitors in the subsequent years. Thailand’s state-planning agency recently lowered its 2025 forecast by 10%, to 33 million visitors.

To boost momentum, Thailand is preparing to launch a “TouristDigiPay” program, which will allow foreign tourists to convert cryptocurrencies into Thai baht when making purchases in the country.

The project is a joint effort between Thailand’s Finance Ministry, Anti-Money Laundering Office (AMLO), and Securities and Exchange Commission (SEC), which recently completed a study on how financial innovation and digital assets could foster both economic and tourism growth.

A Welcome Addition

Although crypto conversion will likely be a welcome addition for many tourists, using the system will require some prior planning.

Those who want to utilize TouristDigiPay must open an account with both a crypto firm and an e-money provider, each regulated by the appropriate agencies. These firms must also undergo Know Your Customer and customer due diligence checks as set forth by the AMLO.

To provide additional safeguards, TouristDigiPay will operate in a sandbox environment with monthly spending limits and no direct cash withdrawals. These guardrails are designed to prevent digital assets from being used to directly pay for goods or services. The SEC noted that merchants will receive all payments in baht.

Only foreign tourists who are staying in Thailand temporarily can use the service. Once approved, they will be able to exchange their digital assets for baht and make electronic payments, including those that use QR code scanning.

Relieving Travel Stressors

Being able to complete accurate and secure payments is one of the common stressors for travelers abroad. Offering these visitors a way to pay in the local currency can make an impact. China’s Alipay reported a tenfold increase in foreign tourists after the popular digital wallet announced integration with other wallets in the region.

Digital assets have long been a contender a potential solution to improve cross-border payments because they are decentralized and secure. However, the volatility associated with crypto has hindered it from becoming a more widespread option. Programs like TouristDigiPay address this issue by converting crypto to baht immediately, but it remains to be seen whether they will have enough impact to help turn around Thailand’s tourisms struggles.

The post Thailand Pilots Crypto-to-Baht Conversion to Drive Tourism appeared first on PaymentsJournal.

U.S. travelers will be able to reserve an Airbnb without paying anything up front, giving them more flexibility to adjust their travel plans.

The vacation rental company is launching a “Reserve Now, Pay Later” feature in response to the growing demand for flexible payment options in the travel sector. Airbnb cited data showing that a substantial number of travelers have missed out on properties because they were busy arranging payment plans with other parties.

The feature will apply to properties that have either a flexible or moderate cancellation policy. Flexible cancellation allows travelers to cancel their stay up to 24 hours before check-in, while moderate policies allow for cancellation up to five days before the vacationers’ arrival.

These parameters are important because users must pay the full amount of their booking before the free cancellation period ends. Airbnb noted that it would send its customers a reminder to complete their payment before this period expires.

An Undaunted Desire

Consumers have faced high inflation, challenging interest rates, and lower credit limits in recent years, yet their desire for travel is undaunted.

Data from Enterprise Mobility found that two-thirds of U.S. consumers plan to take at least one overnight leisure trip this summer, with roughly 90% of these trips were projected to be within the U.S.

More Payments to Float

Overall, consumers have become more strategic in their travel planning, just as they have in their payments. The difficult economic environment is one of the main reasons why buy now, pay later (BNPL) options have gained such traction in recent years.

Even though Airbnb added installment loans through Klarna two years ago, the reservation and cancellation process for vacation rentals has given many travelers pause. A study by Outpayce found that more than 70% of respondents would rather book with a travel agency known for secure payment processes.

Giving struggling consumers a more flexible way to reserve travel is likely a positive move for Airbnb, but there are some challenges. Online travel agencies (OTAs) like Airbnb often reserve hotel rooms or airline seats based on partial payments—transactions that already come with significant cancellation risks.

There is also the possibility that more travelers could double-book or submit spam reservations when there is no up-front cost. Since every hotel, airline, and rental car company is a potential partner for OTAs, this could mean Airbnb has significantly more payments to float until check-in.

The post Airbnb Adds “Reserve Now, Pay Later” to Its Repertoire appeared first on PaymentsJournal.

After generating some controversy with its initial announcement, Google has clarified its rules regarding crypto wallets in its app store.

Google Play will require crypto wallet companies in many regions, including the United States and the European Union, to be licensed with their domestic regulators and comply with industry standards.

U.S. wallet providers would need to be recognized by the Financial Crimes Enforcement Network (FinCEN) as a money services business and authorized by with their state as a money transmitter, unless the company is a federally- or state-chartered bank.

UK providers must gain approval from the Financial Conduct Authority (FCA), while EU crypto wallet companies will have to register as a crypto-asset service provider (CASP) under the region’s recently passed Markets in Crypto-Assets (MiCA) framework.

Concerns Over Wallet Rules

There was pushback against this policy from the crypto community because Google initially didn’t clarify whether the rules would apply to both custodial and non-custodial wallets. This prompted some non-custodial wallet providers to question the rules, noting that self-custodial wallets currently don’t require a license under U.S. law.

After these concerns were raised, Google updated its policy to state that non-custodial wallets don’t fall under the purview of the rules, which are set to take effect in October.

The Compliance Tradeoff

There have been a slew of regulatory efforts around digital assets globally, including the MiCA enactment and the passage of the GENIUS Act in the U.S. These efforts have generally been lauded by the crypto community after years of regulatory uncertainty, which many feel has kept digital assets from becoming a mainstream financial product.

While regulatory clarity will likely bring crypto to a larger audience, it will also increase the compliance burden on crypto companies.

For example, there are substantial reporting requirements for firms before they can be registered as a money services business with FinCEN. Crypto wallet companies will have to develop an anti-money laundering plan, create Suspicious Activity Reports (SARs), and perform Know Your Customer (KYC) checks, among other functions.

This means that many crypto firms, which have been built on a decentralized infrastructure, will have to weigh whether inclusion in Google Play is worth the compliance tradeoff.

The post Google Requires Licensing for Crypto Wallet Providers appeared first on PaymentsJournal.

Payments company Thredd is leveraging Mastercard’s network to give its travel agency clients a more efficient way to conduct international transactions.

Online travel agencies (OTAs) such as Expedia or Airbnb face unique payments hurdles due to the nature of the industry. These companies often reserve hotel rooms or airline seats based on partial payments—transactions that carry a substantial risk of changes or cancellations.

These challenges are compounded in global travel, where cross-border payments bring their own complications: higher fees, longer payment settlements, and regulatory roadblocks have been longstanding pain points.

To solve for these issues, Thredd’s platform enables OTAs to make virtual card payments tailored by geography, payment type, or transaction volume. Using product codes facilitated by the Mastercard Wholesale Program (MWP), travel companies can streamline payments and build trust with their global partners.

Challenging Trust

Establishing trust in the travel industry can be a substantial challenge because OTAs have thousands of suppliers—every hotel, airline, cruise line, and rental car company is a potential client.

OTAs also have to build trust with their customers. Global travelers are increasingly concerned about the security of their payments. Data from Outpayce found that more than 70% of respondents prefer to book with travel companies known for secure payment processes.

Struggling to Support

These security concerns are driven by both cross-border complexities and the rising threat of fraud. However, there is another issue for travel companies: the sheer number of payment types that have emerged in recent years. In addition to the many local currencies, there are now real-time payments systems, stablecoins, CBDCs, and other digital payment methods.

This has led to a fragmented cross-border payment landscape, where many consumers have been forced to rely on multiple payment types to make global transactions.

This is also an issue for travel companies. A separate survey from Airwallex and Skift found that travel agencies struggle to support the wide range of payment methods available to their customers. Additionally, many respondents said their profit margins had been impacted by inefficient payment systems—a factor that is driving most travel companies to explore payments modernization.

The post Thredd and Mastercard Launch Custom Cross-Border Payments for Travel appeared first on PaymentsJournal.

Google Pay has rolled out a handful of updates to its Chrome autofill platform, with the most notable being that “pay over time” options now appear beneath credit and debit cards in the menu. This change underscores the idea that buy now, pay later services are becoming a standard payment method.

The biggest immediate winner may be Affirm, which can now be accessed directly through Chrome’s autofill in just a couple of clicks. Google Pay has also added Australian-based Zip to the menu, with plans to support Klarna, Afterpay, and other providers in the near future.

Shoppers who choose to pay over time through the menu are presented with a list of available options and can even proceed with a virtual card generated for each specific purchase. The feature will be automatically activated for merchants, requiring no integration effort on their part.

Affirm Expands Its Presence

Affirm integrated with Google Pay in early 2024, enabling eligible consumers to pay over time with Affirm wherever the Google Pay button is available. With the new options, users selecting Affirm through the autofill feature will first undergo an eligibility check before choosing between biweekly or monthly payment plans.

“This is a great strategic move by Affirm, and really underscores the power of embedded finance in keeping payment options top of mind for consumers,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Although not a digital wallet per se, Google’s autofill has become a popular tool, making it easy for e-commerce shoppers to select stored payment credentials as if held in a wallet. Now consumers can just as easily select an Affirm buy now, pay later option at participating merchants.”

More New Payment Features

The upgrades also introduce features to make payments easier through Google. Google Wallet is adding new options for international money transfers, allowing users to view clear fee and exchange rate details from multiple providers before sending money abroad.

Last year, Chrome’s autofill dropdown began displaying credit card reward details to help shoppers choose the best payment method for each transaction. The latest Google Wallet update expands this feature to cover more than 100 credit cards.

The post Google Integrates Pay Over Time into Its Autofill Menu appeared first on PaymentsJournal.

SoftBank has begun planning an initial public offering in the United States for its Japanese payments app operator, PayPay. The service boasts 70 million users in Japan—more than half the country’s population—but the IPO would enter a crowded U.S. payments app market.

Since its launch in 2018, PayPay has dominated the Japanese market, processing more than 7.8 billion payments in fiscal year 2024. Last year, one in every five cashless payments in Japan—including credit cards and electronic money—was made via PayPay.. In the domestic code payments sector, the company claims two-thirds of the market share in Japan.

The PayPay offering may raise more than $2 billion from investors when it takes place, expected as early as Q4 2025. Analysts estimate the IPO could value the company between $10 billion and $12 billion.

Softbank has stated that it plans to use the funds to expand services, develop cross-border payment solutions, and invest in AI-driven financial products.

Looking for Market Share

It makes sense for Softbank to look at avenues beyond simple payments. That market is already highly competitive in the U.S., with Zelle claiming more than 150 million users and Venmo at 90 million.

“The market is flooded with ways to pay, ranging from merchant wallets to loyalty apps to universal wallets such as Apple Wallet,” said Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research. “With legacy companies such as PayPal offering in-store payments and more recent players such as Affirm and Klarna offering hybrid physical and mobile ways to pay in-store, the mobile payments space is well saturated. Launching another payment app into the fold is going to require some serious value add on behalf of the consumer in the form of targeted merchant rebates, hyper-personalized experiences, and rewards.”

New Partnerships

To that end, Softbank and PayPay have been exploring new fields. Last November, PayPay teamed up with Alipay+, Ant International’s mobile payment offering, to expand its ability to handle cross-border payments for international visitors to Japan.

PayPay also recently partnered with Filipino payment service GCash. Although its services remain concentrated in Japan, PayPay has banking partners all across Asia. Interestingly, last September, SoftBank became the first Japanese company to offer its employees direct salary payments to a digital wallet—PayPay’s digital wallet, naturally.

The post SoftBank Plans to Launch PayPay into Crowded U.S. Market appeared first on PaymentsJournal.

Stripe’s network of businesses will be able to offer their customers in Brazil the option to make Pix payments in Brazilian Reals, with settlements available in the merchant’s domestic currency.

The integration, facilitated by Latin American payments firm EBANX, will be available to both businesses directly integrated with Stripe and those using e-commerce platforms built on Stripe’s infrastructure.

A key use case for the launch is cross-border payments. One of the most effective ways to improve international transactions in Brazil is to offer local payment methods.

This approach can deliver measurable results: data from EBANX shows that merchants who support Pix increased revenue by 16% and grew their customer base by 25% over a six-month period.

Capitalizing Upon Ubiquity

Pix has quickly become the predominant payment method in Brazil since its launch in 2020. The real-time payments system processed over six billion transactions per month last year, and 93% of Brazilian adults say they use Pix.

The main reasons the network has gained traction so rapidly are that it is fee-free and transactions are real-time. These factors have driven the platform to surpass credit cards as the leading payment type in Brazil.

Pix has capitalized on its ubiquity by launching new features like contactless payments, recurring payments, and a buy now, pay later service. These features have increased the platform’s popularity to the point where merchants who want to tap into the Brazilian market must offer Pix capabilities.

Options Are Effective

Reaching more customers in Latin America is one of Stripe’s goals, as Brazil is the largest market in the region. It also represents a shift toward incorporating more real-time payments, after Stripe has been heavily focused on crypto-related ventures in recent months. The company also made significant acquisitions of both stablecoin company Bridge and crypto wallet Privy.

However, the Pix integration isn’t Stripe’s first foray into instant payments—it already  operates its own pay-by-bank platform, which was first launched in the UK before expanding into France and Germany.

While there have been questions about how much traction this platform will gain, certain options have proven effective. Stripe noted that merchants offering at least one additional relevant payment method beyond cards saw average revenue growth of 12%.

The post Stripe Adds Pix Payments Through EBANX Integration appeared first on PaymentsJournal.

The UK’s Financial Conduct Authority (FCA) has introduced rules stipulating that payments firms must keep company funds separate from customer funds.

The FCA cited several instances where fintechs became insolvent, noting that customers were left with an average shortfall of 65% in these cases. The new safeguarding rules are intended to ensure that, if a company fails, customers are more likely to receive a full refund and face fewer delays.

Under the new rules, payments companies are required to conduct annual audits and submit monthly reports. Fintechs must also perform daily checks to ensure adequate resources are safeguarded to protect their customers and must create plans to prevent delays in reimbursement.

Safeguarding Vs. Commingling

The scrutiny of financial technology firms intensified following the failure of Synapse last year. After the fintech’s bankruptcy, it emerged that the company had commingled the funds it was safeguarding for many banking clients.

There was speculation that Synapse had tapped into customer funds to keep the business running after the loss of a critical client. Once the company went under, however, its records offered no clear way to separate individual accounts—leading to roughly $85 million in frozen customer funds.

Tightening Regulations Appropriately

In the aftermath, regulators worldwide pushed for clearer rules governing how fintechs and banks work together. However, JPMorgan Chase has proposed a different approach, suggesting that fintechs be charged fees to access its customers’ data.

This would represent a shift in the U.S. banking paradigm, where fintechs have historically had free access to consumer banking data. Many argue that charging fintechs fees could be a step backward for the open banking model, which is built on third-party connections.

However, the UK has taken a more regulatory-first approach to open banking than the U.S.—one reason why the model has gained more traction in the region.

Although the FCA may be tightening regulations around fintechs, there is still some leeway. The regulator stated that its rules would be adjusted based on the size of the company. For example, the FCA could remove the audit requirement for a fintech holding less than £100,000 in customer funds.

The FCA also noted that the new rules won’t take effect for nine months, giving fintechs enough time to reach compliance.

The post UK Regulator Tightens Rules on Payment Processors appeared first on PaymentsJournal.

For now, Klarna and Afterpay have declined to participate in the new credit scoring model that incorporates consumers’ buy now, pay later (BNPL) loan information.

In contrast, competitor Affirm has been working with FICO to develop two credit score models that include BNPL data. These models aim to give lenders a clearer picture of how leveraged a consumer is with installment loans. Affirm has also begun reporting its loan data to Experian and other credit bureaus earlier this year.

However, according to the Wall Street Journal, Klarna and Afterpay are pushing back on following Affirm’s lead, citing concerns for their customers. The companies said credit bureaus aren’t receiving real-time, accurate data on BNPL loans, which could negatively impact consumers’ creditworthiness.

“A strong differentiator for BNPL products is to be a way for their customers to use a form of credit without having to necessarily rely on the stricter underwriting of a credit card,” said Ben Danner, Senior Credit and Commercial Analyst at Javelin Strategy & Research. “This is built into the fabric of BNPL firms’ marketing strategies.”

“I see two main issues,” he said. “First, Klarna and Afterpay view the current scoring models as built on the legacy of credit cards and these models are not updated to reflect the novelty of BNPL. Second, Klarna and Afterpay want FICO to guarantee that the scoring data will not penalize the scores of their customers.”

Assessing Phantom Debt

Despite these objections, data from FICO showed that the inclusion of BNPL loan data didn’t have widespread impacts on credit scores. Of the loans taken out through Affirm, FICO found that they affected credit scores by roughly 10 points for over 85% of those surveyed.

Separately, Affirm pushed back against the idea that the surge in BNPL lending has created substantial “phantom debt” that isn’t captured by traditional credit scoring models. It stated that BNPL loans amounted to only a fraction of credit card debt and that delinquencies were rare.

A Tough Ask

Considering this data, the decision by Klarna and Afterpay to withhold their data is perplexing—especially in the case of Klarna, which has been expanding its partnerships and services ahead of a potential IPO this year.

For their part, Klarna and Afterpay argue that if each BNPL loan is treated as opening a new credit line, it could quickly affect customers’ creditworthiness. Afterpay stated it would not share data with credit bureaus until it has concrete evidence that doing so wouldn’t negatively impact its customers—a high bar to clear.

“To satisfy that demand, FICO could only use positive behavior in their scoring, which isn’t objective,” Danner said. “If Klarna’s BNPL delinquency rate is below 1% as they report, it is actually better performing than credit cards—so the impact of reporting does not seem as significant as one might think.”

The post Klarna and Afterpay Opt Not to Send BNPL Data to Credit Bureaus appeared first on PaymentsJournal.

Handwave has raised $4.2 million to bring its biometric tech into stores. The startup’s contactless system allows shoppers to leave their phones and wallets in purses and pockets, enabling them to pay, verify their identity, and collect loyalty points simply their palm.

By and large, the company is betting that its palm-scanning tech can eliminate checkout friction.

Palm payments have been around for some time, with the most notable implementation being Amazon One, the biometrics system introduced by Amazon and rolled out in more than 500 Whole Foods stores, as well as other locations. While Amazon’s push has made an impact, the biometric authentication landscape remains fragmented.

“There’s no question we’ve seem a surge in biometrics payments technology in the last 18 months,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Handwave is following Amazon’s lead with palm recognition, in contrast to JPMorgan Payments in the U.S. and Facepay in South Korea who are deploying facial recognition technology for payments.”

A Leading Contender

Initially, palm scanning was not a leading contender to become the biometric of choice, largely due to consumers’ familiarity with fingerprint and facial scans via mobile phones. However, there’s growing evidence that palm biometrics are gaining traction.

Palm scans are highly accurate and, unlike fingerprint scans, they don’t require users to touch the scanner. They are also gaining ground outside of Amazon. China’s tech giant Tencent has led several recent palm payment initiatives, and Poland’s Autopay has piloted its HandGo palm payment system.

Piloting Amid Challenges

There are still many obstacles to bringing biometric payments to brick-and-mortar stores. One of the main challenges is the cost of installing and maintaining scanning equipment at checkout. To mitigate this, Handwave is leveraging a different model to keep transaction costs down.

“Handwave is incorporating pay-by-bank enrollment, enabling them to offer a lower cost of payments to merchants as an incentive to deploy the technology,” Apgar said.

In this model, merchants would pay a transaction fee when they use Handwave’s tech, which the company touts as being lower than the typical transaction fee.

Beyond cost, another challenge with biometric systems is the need for additional consumer buy-in. Consumers must enroll with the merchant or the system and be willing to trust their data to these platforms.

All of these issues help explain why there are a rapidly increasing number of biometric pilots but few large-scale implementations.

This is also applies to Handwave. After three years, the fintech is preparing for market pilots that will deploy its palm-scanning devices at retail stores. It remains to be seen whether the company can gain traction among competing players and biometric formats.

The post Handwave Sharpens Focus on Palm Biometrics in Retail appeared first on PaymentsJournal.

The European Union is working on the third iteration of its regulatory framework governing open banking. Meanwhile, across the Atlantic, open banking rules remain in legislative limbo and have faced pushback from many financial institutions, causing some to speculate whether the model will ever gain traction in the U.S.

At its core, open banking is about unlocking consumer financial data—once the sole domain of banks—for third-party service providers. Using application programming interfaces (APIs) as a bridge, these fintech companies can provide the array of financial services that consumers have come to expect, including everything from mobile banking to peer-to-peer payments.

The demand for these services means that the open banking model is moving forward regardless of whether nations take a regulatory-first or market-driven approach—and likely will for years to come.

Breaking Down Siloes

One of the initial reasons the EU issued its revised Payments Services Directive (PSD2) was to reduce the practice of screen scraping—where non-bank partners copy banking data for use in their own platforms. Because screen scraping is fraught with privacy and fraud concerns, PSD2 dictated the use of APIs as the secure method for connecting banks with third parties.

Another motivation behind the issuance of PSD2 was to enhance competitiveness, both within the region and in relation to foreign banks. In many European countries, a small number of dominant players have long controlled the financial services market—an issue regulators believed open banking could help address.

Leveling the playing field can drive innovation, but it also requires establishing uniform compliance and technology standards across the region. However, years after PSD2 went into effect, fragmentation persists.

France, for example, has implemented a nationwide API standard that consolidates its financial operations around the Systèmes technologiques d’échange et de traitement (STET) clearing house—a protocol developed by the country’s six major banks. In contrast, many other EU countries, such as Spain and the Netherlands, still lack a standardized API format.

To address the gaps in PSD2, EU regulators are already at work on PSD3, which could launch in 2027. Among its goals are breaking down the siloes that still exist across the region, enhancing consumer protections, and fostering innovation. PSD3 is also designed to support the development of a unified EU payments market, simplifying both cross-border and cross-currency transactions.

An Uphill Battle

Along with the EU, Britain has been at the forefront of the open banking movement, and according to a recent whitepaper, the UK government aims to keep it that way. The country’s National Payments Vision manifesto outlined the current issues and proposed solutions within the sector.

One key insight from the research is that open banking is critical to the future of the financial services industry in Britain. Additionally, for open banking to scale and foster competition in the UK, the country must establish a more robust regulatory framework.

Another innovation is real-time payments, a hallmark of the open banking model. UK regulators noted that account-to-account payments should become ubiquitous due to their substantial benefits. Beyond instant settlement, real-time payments offer minimal transaction fees and increased transparency.

For these reasons, real-time payments have rapidly caught on in countries like India and Brazil. However, despite the UK government’s goal to bring real-time payments widespread, it is facing an uphill battle. There were 31.4 billion purchases made by UK-issued debit and credit cards last year, a 4% year-over-year uptick.   

Challenges to the Use Case

The ubiquity of cards and the established financial infrastructure are two of the main reasons why U.S. consumers have been slow to adopt both real-time payments and open banking. After all, many consumers view paying by debit card and ACH as paying by bank, and these payment types are efficient enough that there has been little significant outcry for change.

Still, there has been movement toward real-time payments in recent years. The Clearing House, a consortium of major U.S. banks, launched the RTP Network in 2017. Two years ago, the Federal Reserve launched its FedNow service.

Both networks have made strides since then, as both services have drastically increased the transaction limits on their systems. Due to its longer tenure, RTP is dominating the U.S. real-time payments market, but businesses still account for 80% of the transactions on the RTP network.

There are several reasons why real-time payments haven’t caught on in the U.S consumer market. First, there is currently no way to dispute a real-time payment transaction that appears suspicious or erroneous—a capability most consumers expect.

“That functionality doesn’t exist on RTP and FedNow,” Don Apgar, Director of Merchant Payments at Javelin Strategy & Research told PaymentsJournal. “So, when we talk about use cases, it’s the sender knows the receiver, and the sender and the receiver agree on the amount. The sender agrees that there’s no dispute, and he’s got no claim to the money once it leaves his account. It’s done, and he has zero recourse.”

Another reason why RTP and FedNow are not yet ready for merchants’ use cases is they only allow users to send money.

“There’s no function where you can request money,” Apgar said. “If you walk into my store and tap your debit card, I’m sending a request and saying, ‘Take money out of his account and put it in my account.’ But there’s no way for me to do that. You have to initiate the payment.”

An Uncertain Framework

These limitations are part of the reason real-time payments haven’t flourished in the U.S. However, another major factor is the absence of a comprehensive regulatory framework to govern them.

Last year, the U.S. Consumer Financial Protection Bureau (CFPB) announced its much-anticipated rules to guide open banking. These regulations marked the implementation of Section 1033—a portion of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted after the 2007-2008 financial crisis. This rule had been shelved for over a decade before finally being activated.

The goal of the regulations was to give individuals the freedom to switch financial services companies with the ease of switching a streaming subscription. According to the CFPB, once consumers have the power to shop around for financial products, it will drive financial institutions to innovate and provide better customer service.

Much like PSD2, Section 1033 was designed to protect consumers’ data from bad actors, but it also contained provisions to eliminate junk fees— transactions fees that are sometimes charged by banks and fintechs.

However, a change in presidential administration has called the future of Section 1033 into question, as there is speculation that the CFPB could vacate the rule entirely. Still, it is possible that the CFPB could instead revise Section 1033 and move forward with the rule.

Taking a Step Back

One of the main reasons the future of Section 1033 has been uncertain is the substantial pushback from many leading financial institutions. A central concern among banks is that the rule could exacerbate the compliance burden on financial institutions that are already heavily regulated.

There are also ongoing concerns that unlocking customer banking data could do more harm than good.

Worries about third parties in the financial system intensified after the collapse of fintech Synapse, whose failure to properly document its money flows led to approximately $85 million in frozen customer funds. In the aftermath, many regulators called for stricter oversight of banks’ partnerships with third parties.

“We created these words like neobank, digital-only bank, and fintech bank, but they are really just pass-throughs for various banking aspects,” James Wester, Co-Head of Payments at Javelin Strategy & Research told PaymentsJournal. “We added an entire layer of technology and technologists, oftentimes without considering compliance.”

“However, a bank is a real thing,” he said. “It is a licensed institution that is regulated, and fundamentals like risk mitigation and ledger management should never fall by the wayside.”

The substantial risks banks face drove JPMorgan Chase to consider an action that could reshape the U.S. financial system. It announced plans to charge fintech companies a fee for accessing customer banking data.

Fintechs have thrived in recent years largely due to free access to such data. Imposing fees could cost the industry hundreds of millions of dollars and potentially threaten the viability of many fintech business models.

With or Without Blessing

If Chase moves forward with this plan, it could have significant implications for the open banking model in the U.S. One of the core principles of open banking is that third parties should have free access to consumer data in order to deliver better solutions and drive innovation.

Because of this, there has already been pushback against Chase’s strategy, and the bank could still revise its plans. Chase has stated that its proposed fee structure remains open to negotiation.

This is just one of many challenges that must be ironed out before open banking can become a global reality. However, the digitalization of banking and modernization of payments have raised consumer expectations to the point where most financial institutions can no longer meet demand without third-party support.

This dynamic alone is likely to keep open banking moving forward—with or without regulatory blessing.

The post Whether Market-Led or Directive-Driven, Open Banking Marches On appeared first on PaymentsJournal.

Splitting a peer-to-peer (P2P) payment has traditionally required all participants to be on the same platform, but a new feature from Cash App aims to bridge that gap.

The fintech’s Pools feature enables an organizer to create a shared fund for use cases like buying team uniforms, splitting the check, or funding a group trip. The organizer can set a target amount for the pool, then close it at any time and transfer the funds to their Cash App balance.

This kind of functionality isn’t new to P2P platforms. PayPal launched a money pooling feature last year, and Venmo Groups has offered a similar option for even longer. What sets Cash App Pools part is its flexibility: organizers can invite users both within the Cash App and by sending a link via text to Apple Pay or Google Pay users who don’t have Cash App accounts.

Enticing to the Ecosystem

In an era where many fintechs are striving to become one-stop-shop super apps, some companies are working to keep users within their ecosystem. However, Cash App isn’t chasing immediate revenue growth. Instead, the company is betting that non-users who participate in Pools will be enticed to become active users of the platform.

The launch is also notable as one of the few for Cash App in recent years. During this time, the Block-owned fintech has faced challenges from PayPal and Venmo.

Venmo has seen substantial revenue growth and boasts a highly sought-after customer base of younger adults, which has driven engagement with eBay and JetBlue in recent months.

PayPal has also been on a tear lately, launching platforms that connect major global digital wallets and enable crypto payments at smaller merchants’ checkouts. The company also unveiled its first-ever digital wallet for in-store purchases in Germany and integrated its payments platform with Perplexity’s artificial intelligence chat for AI-powered shopping.

Running Their Financial Life

Meanwhile, the most significant development for Cash App has been the potential addition of Afterpay’s BNPL service. According to CNBC, the Pools launch is part of Block’s effort to revitalize Cash App after a revenue slump.

Despite these struggles, Block still shares some of its competitors’ ambitions.

“We want Cash App to be the financial operating system for the next generation… to essentially be the money app where a customer can run their entire financial life,” said Owen Jennings, Head of Business at Cash App in a statement.

The post Cash App Group Payments to Include Apple and Google Users appeared first on PaymentsJournal.

The UK’s most valuable fintech was granted a banking license a year ago, yet Revolut still hasn’t been given the green light to operate as a fully fledged financial institution.

Instead, Revolut remains in a holding pattern, limited to holding £50,000 in total customer deposits—billions of pounds lower than leading UK banks like Barclays, HSBC, or Santander.

In this mobilization phase, Revolut operates as an e-money unit rather than a bank. This means the fintech’s UK customers aren’t protected by the government’s Financial Services Compensation Scheme, which insures consumers up to £85,000 if their bank goes under.

One of the main reasons Revolut’s evolution has been delayed is the company’s size. Revolut has over 10 million customers in the UK alone and operates in over 40 countries. In contrast, no other organization has ever pursued the UK’s banking license process with more than 500,000 customers.

Getting the Transition Right

In addition to Revolut’s scope, UK regulators have had compliance concerns regarding the fintech. Last year, the company was found to have far more fraud complaints than traditional UK lenders like Barclays. The high incidence of fraud—mostly carried out through automated push payment fraud tactics—called Revolut’s fraud defenses into question.

The combined concerns about scale and compliance measures have made the fintech’s transition into a bank a daunting process for regulators, who are focused on getting the transition right. However, according to CNBC, Revolut still believes it is on track to become a fully regulated bank this year.

Buying Into the Market

The issues that have dogged Revolut’s banking transition have caused it to consider a different tack in the U.S. According to the Financial Times, Revolut could bypass the lengthy banking charter application process by buying its way into the U.S. market.

In this scenario, Revolut would target an inexpensive bank that already holds a U.S. banking license, unlocking a substantial new customer base for the fintech. This is a real possibility for Revolut: the company currently has a $45 billion valuation but is considering a deal that could both substantially increase its valuation and provide the funds needed for global expansion.

The post Revolut Faces Roadblocks on Its Journey from Fintech to Bank appeared first on PaymentsJournal.

Consumers increasingly interact with their phones by using facial recognition software and fingerprint scans. This familiarity—coupled with the technology’s potential for fraud mitigation and friction reduction—has been a driving force behind the movement to implement biometrics at the point of sale.

However, as Christopher Miller, Emerging Payments Analyst at Javelin Strategy & Research, discovered in the report Global Biometric Pilots Help Smooth the Way for U.S. Adoption, the increasing number of biometric pilot programs hasn’t translated into many real-world implementations.

Additionally, because most of these pilots are limited in scope or conducted in markets outside the United States, U.S. organizations must consider many factors before diving into biometric payment initiatives.

The Universe of Payers

One of the reasons biometric programs haven’t been deployed on a wider scale is timing. A pilot that launched late last year could have been a 12-month trial run that hasn’t reached maturity. Even with the trials that are nearing completion, a period will follow when stakeholders will evaluate the data and decide to move forward, pivot to a different project, or scrap biometrics entirely.

This means that the key data point that can be gleaned from biometric pilots is simply that there is an increasing number of them.

“Pull up five full-scale implementations and say, ‘Here are the use cases of how you can make money on this,’” Miller said. “That is—generally speaking—how payment point-of-sale technologies are sold. That’s the deck that would come to a merchant. They would say, ‘If you implement this, we’ve seen a 30% increase in ticket size. It only costs 5% of the ticket, so you’re ahead 25%. It’s a great deal—when would you like to sign?’ In this case, we aren’t there.”

Even as some of the initial data from the pilots trickles in—be it about customer satisfaction or outcomes—the results should be taken with some skepticism. The participants in early-stage trials are a small sample and often aren’t representative of the entire market.

Additionally, organizations shouldn’t bank on results from early pilots that tout biometric tech’s effectiveness at improving back-office functions like fraud reduction or payment acceptance.

“It could turn out that—on widespread adoption—it somehow is easy to defraud the biometric point-of-sale devices that are being tested now,” Miller said. “That doesn’t show up in a small-scale pilot because everybody in the pilot is vetted and screened and you presumably didn’t allow a lot of world-class villains into your pilot.

“So, your universe of payers is not the same. It is a less threatening universe of payers than the real universe of payers, where criminals are able to identify the weak links in a chain. ’”

Things to Iron Out

Although the initial participants in a pilot aren’t always an indicative sample, the limited data available suggests that most consumers are open to wider-scale biometrics adoption.

Additionally, there has been a growing emphasis on biometrics by the leading players in the U.S. market, including Visa, Mastercard, and JPMorganChase. All three companies have initiatives in the works to build a better biometric payment infrastructure.

However, the organizations seeking to move biometrics forward must consider the impacts on all parties—not just consumers but also regulators, merchants, resellers, and payments processors.  

They also must consider aspects such as payment network standards, standardized hardware, and all the components necessary to make biometric payments a reality.

“If you said, ‘Hey, I want to do this,’ and you’ve already made up your mind, it’s not necessarily easy,” Miller said. “If you start to ask questions about, ‘Well, what are the network standards? What happens if the payment is reversed? Who owns it? What’s my risk?’ Those sorts of things are still being ironed out.

“I think it’s also quite reasonable to think that those sorts of issues can be resolved in a satisfactory manner for early adopters over a two- to three-year period. It doesn’t happen in three months, it’s not going to happen by the end of the year, but progress can be made month over month, quarter over quarter, year over year.”

Suited to the Space

In addition to the nuts and bolts, organizations must consider if their space is suited to biometrics. In many cases, the costs and the management of a biometric payments program don’t justify the investment.

However, the technology can make a significant impact in some areas. For example, a consumer making a one-time purchase at a convenience store isn’t likely to engage with the merchant’s biometric payment program. In an entertainment venue or sports arena where there are large crowds, many users could be enticed into participating.

There are also many loyal fans and season ticket holders in this space who have firmly established relationships with their teams and are more than willing to go through the enrollment process.

“If you’re going to go somewhere all the time and it makes sense to you, it’s an easier payoff to say, ‘Will you bother to do this?’” Miller said. “If you are somewhere where you never intend to be there again, it is less likely that you will do it. The arena offers us, I think, a very helpful way of understanding how those experiences might be segmented such that it makes sense to do it here.

“It’s kind of cool for our season ticket holders. It’s part of why their experience is unique and fun and convenient and super awesome. People who just showed up for a concert who are never going to come back again, that’s fine, we’ll take their cards. We don’t need to go through the trouble of establishing them.”

An Uneven Future

Although there are many considerations for future implementations, the increase in biometric pilots means momentum is building to bring the technology to retail environments. However, biometric payments at a merchant’s point of sale aren’t likely to be universal soon.

“What does the future look like?” Miller said. “It looks like uneven adoption. It looks like segmentation based on use case and value. I think we continue to make the argument that the value proposition for biometrics that is rooted in customer experience is likely to be where we’ll see some of the first successful implementations. It’s probably not going to be at the grocery store, because that is full of one-time users.”

However, the accuracy of the technology and its potential for fraud reduction mean biometrics will move beyond trial runs in the next three to five years.

“From the perspective of someone who has a responsibility in the U.S. market—if I have to think about what is it that my team needs to be working on over that time period, this now fits in that timeframe,” Miller said. “The technology is there; it does actually work. You can go look at it and see there are activities underway to find weaknesses, to determine strengths, to do these learnings.

“They’re not quite there right now, but that’s OK, because you’re not talking about doing it right now. You’re thinking, ‘Should I do this in three to five years?’ You have the luxury of time to follow these types of pilots and this space to gather the information that would allow you to say two years from now, ‘OK, in three years, we are going to have biometrics implemented across 20% of our store base for this type of use case.’”

The post Biometric Payments Pilots Are Picking Up, But U.S. Adoption Is Years Away appeared first on PaymentsJournal.

Amid a wave of solutions aiming to close the gaps in cross-border payments, PayPal is launching a platform that integrates with several leading global payments systems.

At launch, PayPal World will partner with India’s Unified Payment Interface (UPI) and China’s WeChat Pay, with plans underway to integrate with Latin American payments platform Mercado Pago.

Through PayPal World, users of PayPal and Venmo can send payments to users of these other systems—even if the recipient doesn’t have a PayPal account. For example, a U.S. traveler in India could pay a local merchant using UPI, or an e-commerce customer with a WeChat Pay wallet could complete a purchase using PayPal.

A Global Payments Powerhouse

The UPI integration alone is significant news, as the instant payments system recently surpassed Visa to become the world’s largest real-time payment system in both transaction volume and the total number of transactions. In less than a decade, UPI has emerged as the dominant payments platform in the world’s most populous country.

While WeChat Pay competes with Alipay for mobile payments dominance in China, it currently serves approximately 1.3 billion users. Mercado Pago, though smaller with an estimated 64 million users, could play a strategic role. An integration involving PayPal, Venmo, UPI, WeChat Pay, and potentially Mercado Pago would create a truly global payments powerhouse.

A Fragmented Landscape

This system could be a gamechanger for cross-border payments, which have long faced challenges like country-specific regulations, high transaction fees, and processing delays. These issues have persisted for decades, even as demand for international payments continues to heat up.

In recent years, a range of solutions—from cryptocurrencies to credit card networks—have emerged, each aiming to address these challenges.

However, rather than solving the problem, these innovations have contributed to  a fragmented landscape. Users often find themselves juggling multiple platforms for different cross-border payment needs. In reality, most would prefer a single, unified solution. If PayPal can successfully integrate these systems—and others—into PayPal World, it could be a significant step toward a one-stop cross-border payments shop.

The post PayPal Cross-Border Payments Platform to Integrate UPI and WeChat Pay appeared first on PaymentsJournal.

Artificial intelligence has been a part of the credit landscape for a while now, but generative AI promises to fully change the game. From the ubiquitous chatbots to enhanced credit scoring to personalized loyalty programs, AI is trained on every aspect of the credit industry.

In From Hype to Impact: How AI Is Transforming Credit, a new report from Javelin Strategy & Research, Ben Danner, Senior Analyst, Credit and Commercial, looks at what changes lie in store for card issuers. “Generative AI is changing the way financial institutions analyze data and is streamlining customer service operations,” Danner said. “But it also comes with considerable risks.”

The Existing Use Cases

The most visible example of AI now is the chatbot, which we can expect to get more intelligent as AI capabilities expand. Instead of a basic chatbot that sends you through a link list or a hierarchical checkbox list, the improved bots will use natural language processing to have more intelligent and human-like responses. The enhanced intelligence comes with some challenges, presenting the prospect of an untamed chatbot going off the guardrails and saying all sorts of strange things to customers.

In the credit scoring and decisioning spaces, AI has been used for a while to work through unstructured data. Generative AI can output new modes of information based on what it’s been learning. But there are potential regulatory hurdles limiting how that data can be used for scoring and decisioning. Credit scoring is tightly regulated, with a variety of laws that have been on the books for years and haven’t caught up with some of the advances in AI tech.

Companies like FICO say they’re not using AI at all right now in their credit scoring. But other companies that provide data to FICO are leveraging AI technology. They are using it to analyze unstructured data, like social media, email, and even tax returns and rental agreements.

“A rental agreement or an invoice might come to you in a PDF, for example,” Danner said. “But if you need to provide that to your credit agency, a human would have to sit there and look through that document, find what you owed and if you paid it on time, and all that. AI can look at those unstructured invoices, aggregate all the data together, and build that profile for you.”

Unstructured data has a lot of promising uses for evaluating creditworthiness. But regulatory concerns have limited its use when it comes to actually constructing a credit score.

Problems to Be Solved

As a rising and rapidly changing technology, AI still has several kinks to be worked out. By now, everyone has become familiar with AI’s problems with hallucinations.

“I used ChatGPT this morning when I was trying to analyze a certain graph,” Danner said. “I asked it to spit me back three sentences on what it thought this graph was about, and it sent me back numbers that were incorrect. I think it interpreted an 8 for a 6 on one of the charts and sent back data that was completely wrong, but it defended it like it was correct. That’s been one problem that’s plaguing data.”

Another concern is the transparency of the model. AI tends to be a black box, which makes explaining how some of the algorithms arrived at their choices difficult. A credit regulator needs to know how the model comes up with its decisions.

“If you can’t explain the result to me, then we can’t use that,” Danner said.  “That’s something all the AI companies are trying to figure out. That’s why there’s all this verticalization of AI and using their own data internally, so that they can fully explain their model. They’re not just going out and getting data from all over.”

Finally, there is algorithmic bias. Training an algorithm from data collected by humans will introduce biases, and those biases will be reflected in the outputs from the algorithm. A study from Lehigh University looked at racial disparities in large languages models and found these disparities persisting in mortgage underwriting.

“It’s perpetuating these social inequalities,” Danner said. “The banking industry’s been trying to correct those mistakes, especially in credit. Those are things that need to be solved for with these models before a wider application.”

Personalizing Loyalty and Rewards

Credit card companies have also begun incorporating AI into their rewards programs. Much of the data they’re using is derived from transactions. Every time a shopper swipes a credit card, the issuer is collecting that data, then using it to offer different merchant rewards.

For example, Chase has its Chase Offers platform built into its mobile app. Every swipe builds another piece of a huge transaction history. AI has the ability to take a large data set like that, with thousands and thousands of transactions, and personalize it to just one individual.

“Let’s say I know Ben likes to buy coffee in the mornings at 8 a.m.,” Danner said. “Should we present some type of offer to him at 7:45?  If a human had to do that, you would have to hire a whole team of people to sit there and figure all that out. We can now have AI analyze all that transaction data. That’s an opportunity for card issuers that are historically sitting on millions of data points but don’t have a good way to analyze or leverage that information.”

The Next Steps

The new agentic AI shopping models will make the world even more complicated. We will soon have AI agents making payments on behalf of customers. Consumers will eventually figure out how to use that system to find the best deal for hotels, for example, but issuers will also use it to garner more usage from their cardholders.

“Visa gave us a little bit of a hint into their how their AI analytics is going to work,” Danner said. “They presented a picture of a cellphone with a person requesting a hotel, saying, ‘Could you find me the best hotel in the area?’ And it popped back and said, ‘Sure, would you like to add your card to this?’”

The post Smart Cards: How AI Is Changing the Credit Industry appeared first on PaymentsJournal.

After law enforcement agencies identified illegal activity, stablecoin issuer Tether froze $85,877 worth of its flagship USDT coin.

The freeze followed a user’s report that their Binance account has been hacked and their USDT was drained. However, this freeze is relatively small compared to the firm’s recent larger-scale actions.

In June, Tether froze $700 million in USDT across 112 wallets after U.S. authorities requested an intervention. To date, Tether says it has frozen over $2.5 billion in USDT after working with global authorities to identify illicit activity.

These freezes address one of the most long-standing concerns with digital assets: their potential for misuse in money laundering and fraud.

“Tether’s ability to track transactions and freeze USDT linked to illicit activity sets it apart from traditional fiat and decentralized assets,” Paolo Ardoino, CEO of Tether, noted in a blog post. “We take our responsibility to combat financial crime seriously and will continue working closely with global law enforcement agencies.”

The Foundational Tenets

The ability to identify and freeze funds at the smart contract level sets stablecoins apart from cryptocurrencies like Bitcoin and Ethereum. One of the foundational tenets of these digital assets is that they are decentralized and free from government oversight.

Privacy concerns have been one of the main reasons why stablecoins are often favored over government-issued central bank digital currencies (CBDCs). For example, critics of the digital euro said that the CBDC could be used to surveil the region’s citizens, an assertion denied by the European Central Bank.

Control and Visibility

Interest in CBDCs has continued to wane in most countries. In the U.S., legislation that would ban the Federal Reserve from issuing a CBDC has moved forward—even as the nation’s first stablecoin regulations have been signed into law.

However, stablecoin issuers’ ability to monitor and control their coins raises concerns about privacy. These concerns are amplified as a wave of new stablecoins are expected to enter the market. Retailers like Walmart and Amazon, tech giant Meta, and leading U.S. banks like JPMorgan Chase, Bank of America, and Citi have all announced plans to launch their own stablecoins.

As these products roll out, questions will persist about how these organizations will enforce the usage of their stablecoins—and how they will protect users’ data.

The post Tether Freeze Raises Stablecoin Centralization Concerns appeared first on PaymentsJournal.

As financial institutions face increasing compliance pressures, Nasdaq Verafin has introduced a platform that applies agentic artificial intelligence to assist with certain anti-money laundering (AML) processes.

Verafin, known for its cloud-based financial crime management solutions, recently unveiled its Agentic AI Workforce platform. The platform leverages AI agents to automate common compliance tasks with minimal human oversight. Two key focus areas are sanctions screening and enhanced due diligence (EDD) reviews.

Verafin’s Digital Sanctions Analyst is designed to help financial institutions manage false positive alerts—a persistent challenge in traditional fraud detection systems that often overwhelm compliance teams with manual checks.

The platform also addresses another resource-intensive area: periodic EDD reviews. Its AI agents are built to assess and close low-risk cases automatically, allowing compliance staff to concentrate on higher-risk accounts.

Significant Tech Resources

Technology-based solutions for fraud mitigation and compliance have become essential, as bad actors now have significant tech resources at their disposal.

For example, security firm Okta found that cybercriminals have exploited Vercel’s v0 generative AI tool to create full-scale phishing websites from simple prompts. It has been used to create convincing clones of sign-in pages for brands like Microsoft 365—sites that can be created in seconds.

Cybercriminals have also begun deploying AI agents. Symantec recently reported how OpenAI’s Operator agent could be used to carry out a phishing attack from start to finish.

A Double-Edged Sword

While AI can be a powerful tool for bad actors, it can be just as powerful in the hands of organizations.

A recent study from the Bank for International Settlements (BIS) and the Bank of England found that AI models are highly effective for fraud detection—particularly in identifying novel patterns of financial crime. BIS reported that AI outperformed traditional fraud defenses by roughly 26% in detecting suspicious activity.

Although AI’s potential applications come with inherent risks, financial institutions often see it as a double-edged sword. Still, with rising fraud and compliance pressures, increased AI investment seems all but inevitable.

The post Nasdaq Verafin Deploys AI Agents for AML Compliance appeared first on PaymentsJournal.

Wyoming—often at the forefront of crypto innovation—has piloted its Wyoming Stablecoin (WYST) with help from blockchain firm Hashfire.

Hashfire’s platform was built to bring agreements and contracts on-chain. The goal of the WYST trial was to automate vendor agreement approvals and enable real-time payments—a process that would normally take 45 days.

According to Coindesk, Wyoming officials have indicated they could launch the stablecoin as soon as this month and plan to move forward with broader use cases for WYST later this quarter.

Not Jumping on the Bandwagon

There have been a slew of stablecoins announced in recent months, largely due to the imminent passage of the GENIUS Act, a landmark U.S. bill designed to establish a regulatory framework for stablecoins.

However, Wyoming is not merely jumping on the bandwagon. The state announced its plans to launch a stablecoin nearly a year ago.

“Wyoming has been the leading state in crypto acceptance, and it is attempting to maintain that lead,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, told PaymentsJournal. “Their stance on crypto is akin to that of Switzerland—they fully support it and they have passed roughly 30 laws to help push innovation while still protecting consumers.”

Making Crypto Advances

While Wyoming has been an early mover in the digital assets space, several other states and cities have made advances of their own. For example, New York State recently proposed a law that would allow residents to use bitcoin, ether, and other cryptocurrencies to pay fines, taxes, and penalties.

Both Colorado and Utah have accepted cryptocurrencies for tax payments for years, and Louisiana recently became the first state to accept crypto payments for all state services. Additionally, Detroit will accept crypto for tax and fee payments—making it the largest U.S. city to do so.

Although these entities haven’t yet matched Wyoming’s progress, more government agencies are likely to explore digital assets. If the WYST trials are any indication, digital assets have the potential to transform often-onerous government payment process into a streamlined, real-time operation.

The post Wyoming Trials Stablecoin for Contractor Payments appeared first on PaymentsJournal.

In the latest convergence of artificial intelligence and payments, OpenAI will integrate a payments checkout system into ChatGPT.

Earlier this year, ChatGPT and Shopify partnered to upgrade the shopping feature within the AI platform. The collaboration enabled users who search for a product on ChatGPT to see the top results with prices, reviews, and links to relevant sites. However, to buy the product, users were still directed to the merchant’s platform.

According to Reuters, consumers will soon be able to complete their purchases directly on ChatGPT. Open AI is working with Shopify and other brands to develop the system and negotiate rates, as merchants fulfilling orders through ChatGPT would pay a commission to OpenAI.

Growing Payments Integrations

This integration reflects a growing trend of AI chatbots and agents being empowered to perform transactions. Perplexity recently announced that its Perplexity Pro subscribers would be able to make payments directly within its AI interface.

This functionality is enabled by PayPal, with both PayPal and Venmo payment methods supported. The goal is to give Perplexity users the ability to make one-click payments once they’ve selected their preferred product through the AI platform.

The Rush Toward Agentic Commerce

Taking this model a step further, both Visa and Mastercard have rolled out agentic commerce platforms designed to make AI agents into full-scale shopping assistants. Mastercard’s Agent Pay and Visa’s Intelligent Commerce platforms are built to handle every aspect of a transaction—including payment—with little customer interaction.

However, giving AI this level of control has raised concerns, particularly around the technology’s potential for inaccuracies and hallucinations. These risks are somewhat mitigated in the Perplexity and ChatGPT models, where the final payment decision still rests with the user.

Nonetheless, privacy and security concerns remain across all these scenarios, as bad actors could exploit these still-nascent AI models in various ways. Still, for all the valid concerns, the rush toward agentic commerce doesn’t appear likely to lose momentum.

“Skepticism is warranted, but this is happening,” James Wester, Co-Head of Payments at Javelin Strategy & Research told PaymentsJournal. “If we are saying, ‘I can’t imagine why somebody would do something,’ that shows the limits of our imagination, not the limits of where this is going to go.”

“Approaching this with an open mind and understanding that there is going to be an entire industry of developers, systems integrators, and folks that are going to be aimed at this (is important),” he said. “It’s understanding that this is bigger and important, and we need to understand that in the context of our entire industry, as opposed to just saying this seems like a lot of hype.”

The post OpenAI to Add Payments Checkout in ChatGPT appeared first on PaymentsJournal.

As U.S. lawmakers inch closer to passing stablecoin legislation, Citigroup is reportedly exploring the possibility of issuing its own stablecoin.

In a post-earnings call, Jane Fraser, CEO of Citigroup, said the institution is also evaluating key aspects of digital assets, including stablecoin reserve management, fiat and digital currency on- and off-ramps, and crypto custodial services.

This growing interest in digital asset technologies reflects a larger trend in the U.S. financial services industry. JPMorgan Chase and Bank of America have both signaled plans to deepen their involvement with stablecoins, with JPMorgan pursuing several initiatives through its Kinexys digital assets division.

Stablecoins have dominated the limelight in recent months, with industry leaders like Walmart, Amazon, and Meta openly considering launching their own stablecoins. However, fiat-backed tokens are more than just a passing fad—they have the potential to revolutionize finance, particularly in areas like cross-border payments.

Lost in the Hoopla

Amid the stablecoin hype, the broader integration of digital asset technologies into mainstream finance often gets overlooked. Blockchain—the underlying technology behind digital assets, including stablecoins—has applications that go well beyond cryptocurrency.

With its secure, transparent framework, blockchain offers an ideal foundation for artificial intelligence. AI has struggled with inefficiencies, often due to reliance on incomplete data repositories and a lack of transparency around its decision-making. Blockchain can mitigate both issues: its records are immutable, and its processes are fully transparent.

A Trend That Will Continue

Blockchain can also serve as the foundation for tokenizing real-world assets. For example, a property deed could be digitized and placed on-chain, making often complex property transactions secure, transparent, and near-instant.

For these reasons, many investment firms, such as Citadel and BlackRock, have explored the tokenization of stocks and bonds.

However, according to Citi’s Fraser, one of the strongest areas of opportunity for Citi lies in tokenized deposits. Tokenized deposits can offer the same speedy settlement and low fees as stablecoins, but within a regulated banking environment. This is one of the reasons tokenization initiatives have been taken up by organizations like the Bank of England and the Bank for International Settlements (BIS).

“I think tokenized deposits will be a big focus for financial institutions because private lending has grown immensely, just in the last year,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research told PaymentsJournal. “More banks are putting assets like HELOCs and personal loans on chain, and it is much faster and more transparent for banks and consumers.”

“It’s a trend that’s going to continue—companies are going to continue to put funds and assets on-chain,” he said.

The post Citi Considers Stablecoin, but Is More Active in Tokenized Deposits appeared first on PaymentsJournal.

As fintech continues to reshape global finance, both startups and established players are learning that innovation often outpaces regulation. With no universal set of standards, this regulatory lag becomes even more pronounced. Companies expanding internationally need to navigate complex payment regulations that govern customer identification processes, data security measures, and operational authorization requirements. 

We define regulatory arbitrage as the practice of establishing financial and technological operations in jurisdictions with lower regulatory barriers. The diversity of financial regulations worldwide creates both obstacles and opportunities, as companies leverage regulatory arbitrage by selecting jurisdictions and infrastructure configurations based on regulatory advantages.

Building financial systems in fintech requires designing solutions with compliance in mind. Organizations that engage in regulatory arbitrage strategically can expand more rapidly while establishing sustainable operations.

KYC and Identity Standards

Globally expansion begins with managing substantial variations in Know Your Customer (KYC) regulations. Different jurisdictions impose different standards, requiring fintech companies to work with diverse data points. For instance, U.S. fintech companies use credit bureau data alongside public records to verify identities, whereas companies in India must integrate with the government-issued biometric ID system, Aadhaar, for onboarding. In the EU, the eIDAS regulation adds another layer of compliance by enhancing digital signature security and identity validation procedures. 

Companies need to create separate onboarding processes for each region, leading to parallel systems that meet local laws but increase engineering complexity and affect the user experience. 

For example, an international retailer based in Europe paying sellers in the U.S. for cross-border sales might have a relatively simpler onboarding flow requiring only bank account or wallet details and tax information. However, payments to suppliers in China typically require additional checks, including verification of seller identity, business legitimacy, AML compliance, and submission of KYC documentation.

Regulatory compliance burdens often shift to fintech providers or even the importing customers. In the China example, fintechs may need to collect extensive documentation—such as itemized invoices and payment declaration forms—for transactions to clear. In South Africa, customers buying international products (as importers of record) must provide their South African National ID to ensure they stay within their annual import quotas.

Balancing Innovation and Regulation

The implementation of regulatory sandboxes by various countries aims to simplify compliance requirements while fostering technological innovation. These testing frameworks allows fintech companies to trial their products within controlled environments subject to fewer regulatory restrictions. The UK’s Financial Conduct Authority initiated this practice, prompting regulators like Singapore’s MAS and the Central Bank of Bahrain to adopt similar models. In Singapore, the sandbox enabled fintech companies to pilot cross-border remittance services before securing full licenses—accelerating market entry while ensuring legal compliance. 

The South African Reserve Bank’s (SARB) Financial Surveillance department (FinSurv) administers a regulatory sandbox that allows select fintechs to innovate with the goal of simplifying regulatory reporting. Ozow, a South African fintech, recently took part in this initiative and successfully demonstrated a scalable cross-border solution. This solution enables international retailers such as Shein and Temu to pay sellers outside of South Africa directly into their bank accounts for retail imports—a significant improvement over the previous reliance on costly international credit or debit card transactions with added foreign transaction fees.

But sandboxes aren’t infallible. Several fintech companies have expressed disappointment over their restrictive nature. For example, GoPay’s transition from sandbox participation to full licensing in Indonesia took more than 18 months, hindering its ability to expand operations despite strong market demand. 

Security vs. Speed in Global Fintech

The ongoing trade-off between security and speed remains one of the greatest continuous challenges fintech companies face when expanding across borders.

Data localization laws impose complex barriers to operations in different international markets. The EU’s GDPR, alongside India’s data sovereignty laws, requires payment data to be stored within national borders. As a result, fintech companies must deploy multiple regional infrastructure systems, increasing costs and reducing operational performance. 

Some fintech payment operations have opted to route transactions through countries with less stringent regulatory frameworks. Within Europe, Ireland and Lithuania have emerged as major hubs due to their open regulatory environments and streamlined licensing procedures. Companies leverage licenses from these jurisdictions to process European transactions with greater flexibility and reduced compliance delays.

However, real-time payment systems—which enables fast transfers to customers—introduce  increased security risks by shortening the window for compliance reviews. The legal framework in certain regions compound these risks. For instance, in Kenya, transactions via M-Pesa become irrevocable once received unless the recipient consents to reversal. 

Real-time payment systems including Brazil’s Pix and India’s UPI have transformed local transactions through rapid processing and reliable service. By contrast, most cross-border transactions still move through correspondent banking networks, which offer slower yet regulator-endorsed, highly secure transaction pathways. 

Each region presents its own distinct security risks. In Europe, PSD2’s Strong Customer Authentication (SCA) requirements help financial institutions reduce fraud activities. Meanwhile, in Latin America, fintech companies face prevalent threats like account takeovers and phishing attacks—necessitating adaptive security models that respond quickly to evolving regional threats.

Turning Regulatory Complexity into Competitive Advantage

Cultural expectations add another layer of complexity. Users in some countries will tolerate delayed payment processing if it includes strong anti-fraud measures. In contrast, users in the United States and Southeast Asia expect payments to be faster than real-time—anything slower feels broken. MENA users often prefer transacting via wallet apps like STC Pay, presenting payment providers and fintechs with added regulatory and technical complexity, as wallet infrastructures are not standardized like card networks. Fintech companies need to adapt their UX and infrastructure to meet user expectations and regulatory requirements, striking a delicate balance between performance and perception.

Expanding fintech businesses across borders now requires more than product innovation—it requires sophisticated legal engineering. The regulatory frameworks governing global payments demand strategic foresight. Every expansion decision involves regulatory and technical negotiation. Companies must tailor KYC protocols and manage fragmented data infrastructures, balancing speed with security. Those that navigate regulatory arbitrage while preserving user trust will gain more than just market entry. Building adaptable systems on resilient infrastructure positions companies to succeed in a shifting global environment. The future competitive edge for fintech will hinge not just on speed, but on making compliance a core pillar of global growth.

The post Navigating Global Fintech Regulations Through Strategic Regulatory Arbitrage appeared first on PaymentsJournal.

Fintechs like PayPal and Block may soon have to pay for access to banking customers’ data if JPMorgan Chase proceeds with plans to impose access fees.

Financial technology firms have been central in the digital banking zeitgeist, with many banks and credit unions partnering with third parties to offer services ranging from credit score monitoring to crypto transactions. While many fintechs have thrived in this ecosystem, much of their success has hinged on one key factor: free access to customer data.

According to Bloomberg, Chase recently distributed pricing sheets to data aggregators—companies like Plaid that connect banks with fintechs—detailing how it plans to charge for data access. The fees would vary based on how the fintechs use of the customer data, with higher charged for those involved in payments processing.

A Significant Step Back

Charging fintechs fees that could potentially amount to hundreds of millions of dollars may have dramatic impacts on the U.S. financial services industry—and could be seen as a significant setback for the open banking model in the U.S.

One of the foundational concepts of open banking is that third-party providers have unfettered access to consumer data. The objective is to give customers transparency into how their data is used and to allow them to switch banks as easily as they switch subscriptions.

Because this paradigm gives customers more freedom, it should also spur greater innovation among financial institutions. Critics of JPMorgan’s proposed fee structure have said it could hinder fintechs’ ability to compete and stifle innovation.

Scrutinizing Partnerships

On the flip slide, JPMorgan Chase CEO Jamie Dimon has previously voiced concerns about how fintechs use customer data. One of the main criticisms of the open banking model is that relinquishing data to third parties significantly increases risks for the highly regulated financial institutions who are ultimately accountable for protecting their customers.

These concerns came to a head after the failure of Synapse, which resulted in approximately $85 million in frozen customer funds. Following this collapse, many regulators voiced concerns about the role of fintechs in the financial industry, prompting calls for tigher regulations around these partnerships.

The U.S. Consumer Financial Protection Bureau (CFPB) recently finalized its rules governing open banking under Section 1033 of the Dodd-Frank act, giving consumers more freedom and requiring banks to share data with another lender or financial services provider at no cost.

However, the future of Section 1033 remains uncertain. In the absence of regulation, many of the largest banks are proactively scrutinizing their fintech partnerships. For its part, Chase has said it has no issue with sharing data with fintechs—as long as the process is performed properly— and that its fees are still up for negotiation.

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A federal appeals court has blocked a “click-to-cancel” subscription rule issued by the Federal Trade Commission during the final months of the Biden administration.

The rule, which was scheduled to take effect next week, aimed to make it easier for consumers to cancel unwanted subscriptions and memberships. Under the rule, businesses would have been required to obtain consent from customers before charging for memberships or auto-renewals. They also would have had to disclose when free trials or promotional offers end and ensure that canceling a recurring subscription is as simple as signing up for one.

The U.S. Court of Appeals for the Eighth Circuit said that the FTC made a procedural error when it established the rule. A preliminary regulatory analysis is required for rules with an annual impact on the U.S. economy exceeding $100 million, and the FTC had not completed one in this case.

One estimate puts the value of the subscription economy at more than half a trillion dollars this year. It stands to reason that any tweaks to that model would have an impact of at least $100 million.

Will the FTC Accept the Ruling?

The FTC declined to comment on the outcome, but the court’s decision aligns closely with many of the Trump administration’s regulatory policies, which have generally favored granting significant leeway to businesses.

When the rule was first introduced, industry groups pushed back forcefully. The cable industry, home security companies, and advertisers joined forces to challenge it in court, arguing the FTC was trying to “regulate consumer contracts for all companies in all industries and across all sectors of the economy.” Given the strong opposition—and the recent court ruling—the FTC may be unlikely to pursue the matter further.

The Framework for the Rule

The rule was derived from the FTC’s Negative Option Rule and aimed at curbing deceptive recurring billing tactics, including friction-laden opt-out processes, obscure cancellation policies, and automatically renewing subscriptions without explicit consumer consent.

Under the Biden administration, the FTC also undertook a series of enforcement actions under the Restore Online Shoppers’ Confidence Act. This law has been used to pursue organizations accused of extracting unwarranted payments and violating subscribers’ rights.

In 2023, the FTC filed a complaint alleging that Amazon enrolled millions of consumers into its Prime service without their consent and made it intentionally difficult to cancel the service. The FTC is currently preparing for a trial in the Amazon case, which is expected to take place next year.

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As more crypto firms make inroads into mainstream finance, Ripple is applying for a banking license with the U.S. Office of the Comptroller of the Currency (OCC).

Although the company is best known for its XRP cryptocurrency and ledger, Ripple launched a stablecoin, RLUSD, last year. If the banking license is approved, the firm would be subject to federal and state oversight, and the New York Department of Financial Services would regulate RLUSD.

Ripple’s application comes just days after Circle submitted its own request for a bank charter. If approved, Circle would establish a new entity—the First National Digital Currency Bank, N.A. With charters in place, Circle and Ripple could potentially offer tailored services to institutional clients in the future, including tokenization of real-world assets.

Ripple’s leadership also confirmed the company has applied for a Master Account with the Federal Reserve. If granted, this would allow Ripple to hold RLUSD reserves directly with the Fed, providing its stablecoin with an added layer of security.

Moving to Capitalize

Both Circle and Ripple are moving quickly to capitalize on the recent passage of the GENIUS act, which establishes a regulatory framework for U.S. stablecoins.

The legislation has driven a surge in stablecoin interest in recent months. Major retailers like Walmart and Amazon, along with tech giant Meta, are among the many players considering the launch of their own brand-specific stablecoins.

Financial services provider Fiserv has also unveiled plans to launch a compliance-geared stablecoin designed for use by its network of financial institutions.

Between Checking and Crypto

As more traditional players explore stablecoins, crypto companies are expanding into mainstream financial services. For example, crypto exchange Kraken announced it is launching a P2P payments app that could potentially compete with fintechs like PayPal and Venmo.

Meanwhile, new platforms are emerging to bridge the gap between checking and crypto accounts. Ripple unveiled plans to develop a cross-border payments solution in Europe through a partnership with OpenPayd, which provides the infrastructure to move certain regional fiat currencies into RLUSD—and vice versa.

Similarly, Circle plans to roll out Circle Payment Network, a cross-border system designed to facilitate bank transfers between USDC and fiat.

These launches underscore the continued push of crypto companies into the heart of traditional financial services—a trend likely to accelerate as regulatory clarity improves in the U.S.

The post Ripple Seeks U.S. Bank Charter to Expand Footprint appeared first on PaymentsJournal.

With the federal government’s self-imposed September 30 deadline to eliminate paper checks approaching, several organizations are stepping in to both support the initiative and potentially position themselves for new business opportunities. Nacha—which runs the ACH payment network—and Early Warning, parent company of Zelle, have submitted comments in support of the executive order, as well as a consortium of banking associations.

Executive Order 14247, titled “Modernizing Payments To and From America’s Bank Account,” outlines a full transition to electronic payments for all federal disbursements. It states that the federal government will cease issuing paper checks for benefits, intragovernmental transfers, vendor payments, and tax refunds—and will stop accepting paper checks for payments—as soon as practicable.

Nacha’s Argument

Nacha’s support letter emphasized that transitioning away from checks is a matter of policy, not technical readiness. The organization noted that anyone writing a check to the federal government must have a bank account, and therefore could make an electronic payment instead. Nacha also urged Treasury to minimize hardship exceptions that would require the continued issuance of paper checks.

Last year, the Treasury Department originated more than 1.86 billion ACH payments totaling more than $8.5 trillion. In the same period, the federal government issued approximately 36 million paper checks. Nacha pointed out that if the Treasury Department had used ACH payments in place of those checks, the federal government would have saved more than $68 million.

Nacha also recommended that the Treasury shorten its ACH credit settlement times to align with standard ACH timing in the private sector.

Zelle Offers Its Services

Early Warning Services’ comments emphasized that transitioning away from paper checks would strengthen the government’s capabilities to detect improper payments and prevent fraud. Early Warning’s letter also positions Zelle as a viable replacement service for government payments.

The company notes that Treasury checks are 16 times more likely than digital payments to be reported as lost or stolen, returned undeliverable, or altered. In contrast, more than 99.95% of all Zelle transactions are completed without any reported incidents of scam or fraud. Since 2021, Early Warning has been working with the Treasury, which has used its Verify Account solution to help prevent an estimated 179,000 improper payments across various government agencies.

Finally, The Bank Policy Institute, The Clearing House Association, and the Consumer Bankers Association jointly filed a letter supporting the executive order, describing the effort as “a critical opportunity to modernize America’s payment infrastructure, reduce fraud, and increase financial security for American taxpayers.”

The post Nacha, Early Warning Urge Government Away from Paper Checks appeared first on PaymentsJournal.

Following last month’s agreement with artificial intelligence firm Palantir, Bolt has signed a new deal with Klarna to integrate flexible payments into its checkout platform.

The partnership will place Klarna’s payments technology front and center on the websites of merchants using Bolt’s CheckoutOS. Once the integration goes live in the U.S. later this year, Bolt’s customers will be able to offer Klarna’s buy now, pay later (BNPL) services to their customer without any additional legwork.

While Klarna is best known for its BNPL loans, Bolt CEO and co-founder Ryan Breslow told Techcrunch that the partnership is not just about BNPL. The two companies plan to collaborate on building a new model for flexible payments that extends beyond traditional BNPL offerings.

“We know that Klarna has launched an aggressive partner strategy, and they have integrated with basically anyone who aggregates merchants—like Bolt and others,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “Bolt says that this Klarna integration will be special—like no other—but stops short of the details on what Bolt would do to accomplish that.”

You Can Afford This

Expanding its footprint—both beyond BNPL and outside its native Europe—has been a key objective for Klarna in recent months. The company recently launched a debit card and unveiled ambitious plans to become a super app, much like China’s Alipay and WeChat Pay, aiming to handle all aspects of customers’ lives.

However, BNPL loans remain the company’s bread and butter. While these are popular with consumers, their impact on merchants is still uncertain.

“We know from research data that BNPL offerings perform much better when they are integrated at the merchant level and displayed on the product page in e-commerce,” Apgar said. “The idea is that when the consumer is looking at the item and deciding if they can afford it, you want the BNPL offer to be right there saying, ‘Yes! you can afford this.’”

“Displaying BNPL on the checkout page as a payment option is a convenience for consumers, but it doesn’t help the merchant drive conversion, because the shopper has already made the decision to buy the product, hence the reason they are on the checkout page,” he said.

A Significant Partnership

Regardless of the implications for merchants, the Klarna partnership is significant for Bolt, which has grappled with leadership turnover and funding shortfalls in recent years.

Breslow stepped down in 2022 amid allegations that he inflated metrics and misled investors. He later returned as CEO under renewed controversy—this time tied to an ultimatum issued to Bolt shareholders and an ambitious goal to raise $450 million and hit a $14 billion valuation.

While it appears Bolt did not secure that funding, the company gained momentum by signing a deal with Palantir to launch an AI-powered checkout solution that customizes the shopping experience based on consumer behavior.

Like Klarna, Bolt has also expressed plans to evolve into an all-encompassing financial services platform for consumers. The partnerships with Klarna and Palantir mark meaningful progress for the fintech, but the company’s long-term outlook remains uncertain.

“Since Bolt is a checkout solution—and even though they claim to be powering their checkout product with AI from industry leader Palantir—it’s not clear how their addition of Klarna as a payment option is going to drive additional value for their merchants compared with other BNPL offerings,” Apgar said. “Competition in the checkout space is heating up, especially with Paze getting aggressive this year in soliciting merchants to integrate to its checkout platform.”

“Bolt’s adjusted strategy has it expanding horizontally as a consumer wallet that travels across merchants and will support stablecoins, etc., but the digital wallet space is just as crowded for consumers as the checkout space is for merchants,” he said. “It’s hard to tell whether this isa cohesive strategy or just a larger product roadmap that attempts to justify the $14 billion valuation.”

The post What the Klarna Deal Means for Checkout Platform Bolt appeared first on PaymentsJournal.

For years, many businesses proclaimed they would never transition their payments to SaaS. Even as everything else moved to the cloud, financial professionals remained adamant that payment services and data would stay in-house. The data was considered highly sensitive, and few were willing to risk storing it outside their walls.

But the benefits of Payments-as-a-Service (PaaS) have upended that thinking. More organizations are now realizing that leveraging external providers is transforming their payment structures—both for today and the future. In a Payments Journal Podcast, Mike Vigue, Head of Product at Finastra, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed how Payments-as-a-Service can give organizations of all sizes access to the latest technology, enhancing resilience and agility while enabling mid-market clients to compete with much larger institutions.

Staying Ahead of the Curve

Payment modernization is often viewed as a destination—a point at which payment operations will eventually arrive. In reality, there is no endpoint. Technology, regulations, and customer expectations will continue to evolve. Future changes will require systems that are not monolithic, but agile—enabling developers to build solutions that have yet to be conceived.

While the exact direction of change is uncertain, it’s clear that tomorrow’s requirements will call for systems that are more modern. That means being cloud-native, API-first, and event-driven.

According to Vigue, organizations that aren’t allocating 20% to 25% of their roadmap to maintaining modern infrastructure and technology risk falling behind. And the further they fall, the harder it becomes to develop new features. Staying modern enables technology to do more—and to do it faster.

Changing on the Fly

Nobody has the luxury of stopping time for a year and a half to develop a new platform. PaaS offers modular solutions like microservices that allow teams to modernize one piece of the application at a time and isolate service failures from bringing the entire application down. The process involves extracting a particular payment rail out of the platform, developing it in a new modernized way, and then integrating it back into the existing infrastructure—until the team has time to update the rest.

“When I talk to certain customers, particularly about ACH for example, they’re nervous,” Vigue said. “How can you take a bank that’s doing like 300 million ACH transactions a year off of an application that’s been in their business for 15 years, runs off a mainframe and put it on some modern system without bringing the bank to its knees?”

“ACH is 50 years old and it’s kind of been neglected, because banks all have the same technology,” he said. “There’s not a lot of difference in what you get from functionality there. But you can differentiate your services by modernizing them. We’re going to see some changes coming, particularly in 2026. For example, there’s an upcoming mandate from Nacha to do fraud scans against ACH payments. I heard a quote recently that 44% of banks are thinking about looking at their ACH infrastructure over the next 18 months.” ¹

According to Wester, the goal is to reach a point where you can start anticipating some of the changes. “Some of those changes are going to be things that you think that you already do well now,” Wester said. “It’s not just about being prepared to do whatever is coming down the pike, it’s also about how you can improve things you’ve been doing for a very long time.”

These newer tools can result in a more modernized and responsive infrastructure, as the systems are built on today’s architecture rather than that of 15 to 20 years ago. While legacy applications currently offer more functionality, AI can help them catch up and modernize their technology faster.

Resilience and Agility

One key benefit of PaaS is resilience—keeping the payment system operational no matter what happens. Even the best payments application is useless if no one can log into it. Requirements have become so stringent that some clearing systems are now expected to be down for a maximum of two minutes per month. Meeting this standard requires a comprehensive business continuity and disaster recovery plan.

“I previously worked at a different organization that had a third party doing our payment processing for us, and their bank went under,” said Vigue. “That was one thing I’d never really thought about from a disaster recovery plan. Because we were in the accounts payable automation space, we couldn’t send the payments that our customers needed to pay their vendors.”

Another critical element of Payments-as-a-Service is agility. The payments industry is undergoing rapid transformation, from the ISO 20022 changeover to new real-time payment schemes. Banks that want to compete effectively must be agile in this environment. Monolithic applications within legacy infrastructure that take a year to deliver a few enhancements simply won’t be good enough. PaaS enables banks to isolate and modernize specific payment rails—such as real-time or cross-border systems—without overhauling the entire platform. This approach not only accelerates time to market but also allows institutions to position those capabilities alongside offerings from major players, creating a competitive edge.

Building Toward the Future

It’s critical to work with a vendor that has a well thought-out roadmap—one that clearly outlines where the process is headed and how it will evolve over time. A strong partner provides support as new technologies emerge and the payments landscape continues to change.

Roadmaps are essential. Many consist of ideas under consideration, but forward-thinking vendors go further. They’re willing to say, “This is where we’re going, this is what will be happening, and this is what we’re building toward.” That level of clarity allows customers to confidently invest in the process, knowing both what the vendor will be supporting and how they will be supported. The result is that even mid-market organizations gain cost effective access to the sort of technology they would struggle to deliver themselves, positiong them strongly alongside the major players.

“We talk about people adopting Payments-as-a-Service, but frankly, I don’t think some of them are going to have a choice in the future,” said Vigue. “The idea that this is something that you can put off or think about later—no. If you’re not already thinking about where you’re going to be from a modernization standpoint, you’re already behind.

“That’s where Finastra comes into play,” said Vigue. “First and foremost, it’s the people that we have and the credibility we bring by knowing what it’s like to be in their shoes, having done it so many different times. It’s less about the product and more about the ability to get an organization from where it is today to where they want to be in the future.”

¹Source: Celent Dimensions Corporate Banking Survey 2025 (n:227)

The post Don’t Just React to What’s Next in Payments—Anticipate It appeared first on PaymentsJournal.

Interoperability has long been a goal for payment systems, which are often siloed and operate in parallel. In addition to increasing efficiency and boosting digital payment adoption, data from the International Monetary Fund (IMF) shows that an interoperable ecosystem stimulates commerce, reduces transaction costs, and expands access to credit.

The Growing Retail Digital Payments: The Value of Interoperability study highlights data from India’s Unified Payments Interface (UPI)—an interoperable platform that has become the world’s largest retail fast payment system. Unlike closed-loop systems, UPI enables seamless transactions between users of different payment providers.

Supporting Digital Payments Adoption

Unsurprisingly, interoperability plays a key role in driving digital payment adoption. Enabling different payment apps to work seamlessly with one another expands the reach of digital payments by giving users the freedom to choose their preferred app. The IMF encourages other countries seeking to reduce reliance on cash transactions to prioritize interoperable payment systems.

“Regions where interoperability increased by more indeed saw a significant increase in adoption of digital payments, both in absolute terms and relative to cash,” the study concluded.

But the benefits don’t stop there. Allowing users to access payment methods through multiple apps lowers barriers to entry and paves the way for more innovative offerings in the payments ecosystem. Interoperability also incentivizes existing providers to enhance the quality of their services as a means of retaining users.

Contrast with Traditional Fintechs

Interoperability has long been a challenge for payment systems in many countries, including the U.S., because different rails operate on separate systems. If a U.S. company wants to send a real-time payment, the sending institution might be set up for FedNow, while the receiving one might default to ACH.

The IMF study compared UPI transactions with data covering all transactions from an unnamed major fintech firm. This provider processed payments over a closed network, where both parties had to use the same wallet app. Researchers then analyzed users’ app choices after their first experience with digital payments.

The report noted: “After sampling both, users increasingly chose the interoperable UPI system over the closed-loop alternative. Crucially, transactions that would not be possible without interoperability—those where the sender and recipient use different apps—were a substantial part of this growth.”

The kicker? The fintech soon decided to join UPI.

The post IMF Study Highlights Benefits of Interoperability in Payments Innovation appeared first on PaymentsJournal.

Kraken, one of the world’s largest crypto exchanges, is continuing its expansion into mainstream financial services with the launch of its peer-to-peer (P2P) payments app.

The platform, dubbed Krak, allows users to send cross-border P2P payments in both fiat and crypto. The Krak app features an attached spend account and an earnings account that offers yield generation on more than 20 digital assets.

The app puts Kraken in competition with well-established P2P players like Venmo and Cash App. In addition to their substantial customer bases, both Venmo and Cash App support crypto transactions to varying degrees.

However, Kraken’s roots in digital assets mean Krak will offer a much wider crypto scope. Users will be able to send and request payments using 300 different assets, including both crypto and local currencies.

A Tough One to Crack

Kraken’s P2P launch marks the next step in the exchange’s broader push into mainstream financial services. The company recently introduced a debit card for its UK and European customers, allowing them to spend crypto assets at millions of merchant checkouts.

While building a more comprehensive financial ecosystem is a logical step for Kraken, it’s still unclear whether the exchange’s customers have a strong appetite for crypto-based payments—whether through a debit card or P2P app.

“It’s been a tough one to crack,” Joel Hugentobler, Cryptocurrency Analyst at Javelin Strategy & Research, told PaymentsJournal. “A debit card, just like with other remittances, makes more sense when you use something that’s less volatile, like a stablecoin.”

“Accounts debited are great when you have crypto that has increased in value, but once the value of those tokens decreases, they don’t want to use the debit card,” he said. “Time will tell if they’ve cracked it, but I think they need to leverage something less volatile.”

Intent on Addition

Regardless of the traction these efforts gain, more crypto firms appear intent on adding conventional financial services. Stablecoin issuer Circle recently announced it is launching a cross-border payments network designed to connect financial institutions around the world.

International transactions were also the focus of Sling Money’s new P2P payment rail, built to serve as a bridge between local payment systems like ACH and stablecoins.  

Similarly, Kraken has several products in mind for Krak. According to Reuters, Kraken plans to add physical and virtual cards, as well as loan products, to the platform soon.

The post Kraken Moves Beyond Crypto with P2P App appeared first on PaymentsJournal.

PayPal has signed agreements with two major NCAA conferences, the Big Ten and the Big 12, to allow student-athletes to receive compensation through its platform.

According to CBS Sports, PayPal will pay the Big 12 nearly $100 million over five years. No comparable figure was reported for the Big Ten, but given it is a more prestigious conference with more schools, the amount is likely higher.

The company also noted that students at some colleges will have the option to pay their tuition using PayPal. This is separate from the issue of athlete compensation, as most athletes receiving money from a college are likely on scholarship. However, it gives PayPal added leverage in encouraging colleges to begin accepting PayPal for tuition payments.

Visibility at the National Level

This move positions PayPal as a national rival to Visa and Mastercard in the payments space. When a Big Ten school like Ohio State lands a top recruit, instead of the traditional giant cardboard check, they can now present the athlete with an oversized debit card featuring the PayPal logo.

“When Alex Criss took over as CEO of PayPal, he was given a mandate to restore the brand to a leadership position in financial services,” said Don Apgar, Director of Merchant Payments at Javelin Strategy & Research. “This is a page out of the Visa and Mastercard playbook, using high-profile sponsorships like this to elevate the brand and drive awareness.”

PayPal had been pursuing college football partnerships since last year, when it tried to buy the naming rights for the Big 12. Venmo, a subsidiary of PayPal, will serve as the presenting partner of the Big Ten’s Rivalry Series and as an official partner of the Big 12’s championship events.

More Conferences to Come?

The announcement followed a court settlement two weeks ago that, for the first time, allowed schools to compensate student-athletes. Under the agreement, individual schools may distribute up to $20.5 million to current athletes over the next year, along with up to $2.8 billion in back pay to former players. Most of that money is expected to go to football and basketball players, who generate the most revenue in college sports.

Big 12 Commissioner Brett Yormark told CNBC’s “Squawk Box” that he expects other conferences will soon partner with PayPal as well. The Southeastern Conference and the Atlantic Coast Conference remain the only two college football power conferences yet to join.

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The debit card may be the workhorse of payment methods, but that hasn’t kept the product behind the scenes. In fact, debit has become the product du jour, with recent releases from fintech heavyweights like Venmo and Klarna. There have even been debit card launches by companies as diverse as Wyndham Hotels and Kraken crypto exchange.

As Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research, found in the report Consumer Debit Payment Choice: Understanding Debit Card User Preferences, macroeconomic conditions, emerging features, and new players are likely to keep debit cards top of mind for years to come.

A Balancing Act

Though debit cards may be largely unchanged as a product, the way consumers use them has become more strategic. Inflation and interest rates have combined to put consumers under immense pressure in recent years, and supply chain issues and tariff concerns have added to their worries.

In years past, consumers tended to use debit cards for items like groceries or gas and credit cards for larger purchases. However, the tough macroeconomic environment is shifting behaviors.

“With fluctuation in prices and mostly rising prices, we’ve seen some consumers have to switch from debit to credit cards to pay for goods that they used to pay for every day with debit cards, mostly out of necessity,” Tavilla said. “There is a segment who don’t have the funds readily available, so therefore they have to resort to using credit, whether it’s to pay bills or to put dinner on the table.”

Conversely, another consumer segment has been forced to shift from credit to debit.

Credit card debt has hit historic highs, and annual percentage rates have been elevated. This mounting debt has caused many consumers to explore other payment types, such as buy now, pay later (BNPL) plans, but it has also caused more families to budget more strictly, live within their means, and rely on debit cards.

In some cases, consumers don’t have any other recourse. In response to the pressure on consumers, many credit card issuers have tightened their lending standards to mitigate the risk of default. This means some consumers can’t secure the credit lines that were available a few years ago.

Shouldering the Rewards Load

Merchants have also played a role in driving consumers to debit. Retailers have long considered credit card interchange fees to be a burden on their businesses, and many have steered their customers toward alternative payment types.

However, credit cards continue to be the dominant U.S. payment method, in part because consumers are attracted to the rewards and incentives. Historically, debit cards haven’t been able to compete with the array of travel and dining rewards that credit card issuers provide.

This is changing. There has been an increasing trend of debit card providers offering rewards. While these may not be as extensive as credit card rewards, the gap between the two is narrowing.

“In our study, we see that over 40% of debit card users say that they have cash back,” Tavilla said. “I was wondering: If there are only a handful of issuers that are offering debit cashback rewards where are these 40% of consumers getting cash back? What I found is these are often merchant-funded cashback rewards.”

For example, a merchant-specific reward could be that a user gets 5% cash back if they use their debit card at Lululemon.

This model differs from the credit card rewards model, in which issuers fund their rewards programs with the revenue they receive from interchange. Because the debit interchange has been so low, it hasn’t been profitable for issuers to offer cashback rewards.

As merchants shoulder the rewards load, it will likely cut into their profits to return revenue with cashback offers, but these incentives could pay off in the long run.

“It makes sense because often the cost associated with debit cards for merchants is less than credit card transactions, so merchants would have an incentive to offer discounts,” Tavilla said. “There is an incentive for the merchants to pass those along to consumers to influence them to use debit over credit.”

Becoming More Debit-esque

Influencing customers, particularly younger generations, is one of the main reasons for the recent flood of debit card launches.

Peer-to-peer companies like PayPal, Venmo, and Cash App have provided debit products for years, but Venmo has sweetened its debit card rewards with15% cash back at retailers Sephora, Walmart, Lyft, McDonald’s, and Walgreens.

Additionally, many prepaid solutions are expanding to become more debit-esque, including features by which users can load funds onto the cards through cash or check deposits and check balances in a mobile app or on a website.

Finally, BNPL companies have also offered more financial products as they seek to expand their footprint, as evidenced by Klarna’s recent debit card launch.

In all these instances, fintech companies are reaching out beyond their roots with the goal of becoming full-service financial providers.

“I think we’ll see more diversification of debit products; it seems like there’s lots of crossover,” Tavilla said. “It’s a good strategic move, especially with younger consumers. Gen Z and Millennials are used to using debit cards, P2P payments, BNPL and other digital payments.”

A One-Stop-Shop Mentality

Many Gen Z consumers are digital natives who established relationships with fintechs like Venmo and Cash App early on. Gen Z is also a heavy user of BNPL, so it is a sensible step for those firms to try to capture more market share with younger users.

“I think it’s a practical and good strategy to expand and build upon those products and try to get consumers to adopt and cross-sell other products,” Tavilla said. “I think with that generation, they’re more open to using nontraditional bank products like Chime, Dave, Venmo, and Cash App.

“In their mind, it’s like a one-stop shop where previously these options might not have been available. You would just go to the bank to do a certain type of transaction or certain institutions offer a specific product, and that’s who you would go to, whereas nowadays with digital technology, it’s easier to offer a broader variety. Consumers tend to think in the super app or one-stop-shop type of mentality.”

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To further foster innovation within the UK’s strong open banking ecosystem, Mastercard has developed a sandbox where financial institutions can experiment with the latest instant payments technology.

The sandbox gives banks access to Mastercard’s fifth generation account-to-account (A2A) real-time payments infrastructure. Within this environment, UK financial institutions can test payment use cases across retail, peer-to-peer (P2P), and B2B transactions.

For example, the sandbox will enable institutions to implement a “5-leg credit transfer,” allowing a consumer to make a real-time payment at a merchant with the retailer receiving instant confirmation.

Far Richer Data

According to Mastercard, the merchant and their financial institution would also receive richer data from these transactions, as the sandbox will adhere to the ISO 20022 format.

This messaging protocol was designed as an international standard for the payments ecosystem, supporting efficient and transparent cross-border payments in both consumer and commercial applications.

ISO 20022 compliance will become even more critical in the coming months, because one of the world’s leading cross-border payments systems, SWIFT, has mandated ISO 20022 adoption by November.

Big Tech Sandboxes

While there are benefits to ISO 20022 adoption, many financial institutions—especially small- to mid-tier banks—have yet to achieve compliance. Beyond the costs associated with upgrading, a key reason for hesitation is concern around risk and fraud.

This is where the sandbox model can provide value for highly regulated financial institutions looking to adopt emerging technologies. For example, artificial intelligence has become one of the most transformative technologies in recent years. Yet, many financial institutions worry it could make errors or jeopardize sensitive customer data.

In response, Nvidia launched its own sandbox, allowing UK banks to experiment with AI and uncover use cases in a controlled setting. This approach helps financial institutions stay competitive while minimizing exposure to risk.

Such environments are equally critical in the context of real-time payments, where faster transactions often come with increased fraud risk. Unlike regulated institutions, bad actors aren’t bound by compliance regulations and tend to adopt new technologies faster than financial institutions—an issue that big-tech-built sandboxes have been developed to mitigate.

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More banks will soon have an avenue to capitalize on crypto, as Fiserv rolls out a digital assets platform and stablecoin that will be available to its customers.

The stablecoin, FIUSD, along with the platform, will be accessible to banks and credit unions by the end of the year. This move is expected to dramatically increase the number of financial institutions that can offer crypto services.

FIUSD will be built on infrastructure provided by stablecoin leaders Paxos and Circle, and will initially be issued on the Solana blockchain. Solana has become the blockchain of choice for financial institutions due to its speed and lower transaction costs compared to Ethereum.

Laster this year, Solana is slated to receive a major upgrade that will not only outpace competing blockchains, but also surpass the speed of the well-established payment rails built by Visa and Mastercard.

Combining Global Reach

With this foray into digital assets, Fiserv hopes to build interoperability with other stablecoins. The company has already unveiled its partnership with PayPal to integrate FIUSD with PYUSD, PayPal’s stablecoin.

PYUSD has been around for two years, and one of its main features is that it’s issued by a payments company—not a crypto company—with a global customer base. Fiserv noted that combining the global reach of Fiserv and PayPal would accelerate the adoption of both companies’ stablecoins.

Actively Expanding Use Cases

While banks and credit unions have increasingly viewed digital assets as a powerful opportunity, compliance concerns have kept many financial institutions on the outside looking in.

A key feature of FIUSD is that it’s built with a compliance-first approach. Fiserv said FIUSD gives financial institutions full control and enables compliance through the company’s existing fraud monitoring, risk management, and settlement systems.

The company also hopes to bring more digital asset offerings to its platform in the future. Tokenization is another technology that financial institutions have incorporated over the past few years—for many of the same reasons stablecoins have gained traction.

Tokenization of real-world assets simplifies transactions that are time-consuming, risky, and expensive for banks. Fiserv is exploring the use of deposit tokens to maintain the benefits of stablecoins in the institutional environment and is in discussions about partnerships to expand use cases.

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After bringing Shopify on board, Coinbase will roll out its stablecoin acceptance platform to merchants at scale.

The platform, dubbed Coinbase Payments, provides the infrastructure where merchants can receive payments in Circle’s USDC. It runs on Coinbase’s layer-2 network, Base, and supports hundreds of wallets, including MetaMask, Phantom, and Coinbase Wallet.

On the back end, the solution is designed to handle standard merchant operations such as refunds and subscriptions, leveraging Coinbase’s APIs.

Benefits and Rewards

Shopify is already live on Coinbase Payments, a partnership which brings stablecoin payments to a wide array of merchants and creators. While stablecoin acceptance gives customers another way to pay how they prefer, it also offers substantial benefits to merchants.

Stablecoin payments are borderless, secure, nearly instant, and free from the transaction fees typically associated with credit cards. These advantages are part of the reason why the two largest retailers in the world—Amazon and Walmart—have considered launching brand-specific stablecoins.

In addition to reducing transaction costs—which could translates to billions of dollars in savings for major retailers—there is also the potential for merchants to offer incentives for using branded coins. Coinbase hopes to bring this capability to Coinbase Payments by adding support for programmable rewards to the platform soon.

The Deluge of Stablecoins

The deluge of stablecoin-centric launches in recent months shows no sign of slowing—especially now that the U.S. has reached a key milestone. The Senate recently passed the GENIUS Act, a bipartisan bill aimed at establishing a regulatory framework for stablecoins in the U.S.

This marks the first time such legislation has moved forward at the federal level. However, the Act still faces obstacles: The U.S. House of Representatives must pass it, and lawmakers may need to reconcile it with its own STABLE Act.

Despite differences between these two bills, the development represents a significant step forward for the digital assets industry. The lack of regulatory clarity has long drawn criticism,  and more certainty provide a tailwind for the already accelerating stablecoin market.

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The super app concept has seen great success in China with Alipay and WeChat Pay, and Klarna aims to follow a similar blueprint.

Best known for its buy now, pay later (BNPL) products, the company has been steadily expanding its offerings. Its latest move is the launch of mobile phone plans in the U.S. featuring unlimited data, calls, and texts.

In an interview with CNBC, Klarna CEO Sebastian Siemiatkowski said that the company’s ultimate objective is to create a platform that can handle every aspect of a user’s financial lifeand many non-financial services.

Concerns Around Closed Ecosystems

The super app model allows users to handle everything from payments and messaging to shopping—all within a single, one-stop platform. While Ant Group’s Alipay and Tencent’s WeChat Pay have built massive ecosystems for their users, there have also been concerns.

In fact, when Alibaba began accepting payments from WeChat Pay on its e-commerce platforms, many viewed it as a sign that the super app concept was losing steam. The model has been criticized because it creates closed platforms that can stifle growth, especially in tough economic conditions.

Cutting the Clutter

Another obstacle for Klarna is it has tried the super app approach before, with mixed results. According to Siemiatkowski, the differentiator now is that the company has more advanced artificial intelligence technology.

The AI-powered platform can cut through the clutter in the crowded super app ecosystem and personalize the user experience. The goal is for the platform to become a digital financial assistant—much like the AI agents in Visa and Mastercard’s agentic commerce solutions—that can guide users through their everyday banking needs.

For example, if Klarna’s app determines the user is paying too much for their smartphone plan, the platform could offer suggestions for other solutions and facilitate the switch to a new provider.

Regardless of whether the super app takes off, Klarna’s mobile phone offering is designed to strengthen its position in the U.S. As is its recent plans for a debit card. These are all efforts that should further serve to drive the company beyond its BNPL roots.

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As more organizations consider branded stablecoins, a recent JPMorgan Chase trademark application has fueled speculation that the bank is gearing up for a stablecoin launch.

The document filed with the U.S. Patent and Trademark Office seeks to trademark JPMD, which has been considered to stand for JPMorgan Dollar. The application states that the bank is pursuing this trademark to carry out crypto and digital assets services such as trading, transfers, and payment processing.

Although JPMorgan Chase has not yet confirmed anything, many in the crypto industry quickly took the filing as a sign that a stablecoin is on the way from the largest bank in the United States.

A Strong Proponent

This isn’t a stretch. JPMorgan Chase has been an early adopter and strong proponent for digital assets technologies. The institution launched one of the world’s first bank-operated blockchains, Onyx—a platform later rebranded to Kinexys—to bring technologies like blockchain and tokenization to mainstream financial services.

The platform’s crypto payment settlement system, JPM Coin, is a cryptocurrency that banks use to perform foreign exchange conversions on the blockchain. One of the initial use cases for the crypto, which was also rebranded as Kinexys Digital Payments, was to facilitate USD to euro conversions.

More recently, Kinexys signed a deal with India’s Axis Bank to allow the bank’s enterprise clients to send and receive USD transfers both domestically and cross-border in real-time.

A Solo Stablecoin

JPMorgan has strong digital assets underpinnings, but recent indications were that the bank wasn’t pursuing a solo stablecoin. In fact, The Wall Street Journal reported that Citi, Chase, Bank of America, and Wells Fargo were considering issuing a joint stablecoin.

Whether or not JPMorgan decides to go at it alone, it seems clear that major financial institutions around the world are destined to enter the roughly $250 billion stablecoin market. This trend is spreading outside of the financial services industry. Walmart and Amazon recently signaled that they are considering brand-specific stablecoin launches of their own.

This news raised concerns that stablecoin payments to the two largest retailers in the world could remove significant volume from the traditional financial system, which is likely a reason that banks are working toward stablecoins of their own.

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Walmart has Sparky; Amazon has Rufus. These AI-powered shopping assistants have begun to take a more prominent place in the e-commerce apps of the world’s largest retailers. Although chatbots have been an early use case for artificial intelligence, they are just the beginning of how merchants can leverage this powerful technology.

As Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, found in the report AI in the Payments Ecosystem merchant use cases for artificial intelligence  cover such areas as transaction routing and regulatory compliance. However, merchants also must consider risks as they race to implement AI.

Fraud, Compliance, and AML

Along with customer service, one of the most frequent implementations of AI has been in fraud detection. Artificial intelligence can dig through vast amounts of data and identify patterns and red flags. This capability is especially applicable in card-not-present environments like e-commerce.

Although AI excels at parsing data, fine-tuning can be done in how models analyze their findings and present conclusions. If AI has too much autonomy in fraud response, unintended consequences can occur.

“Sometimes a decision is very obvious, but in cases where it’s not, if you’re not restrictive enough, you’re going to take a fraudulent transaction,” Apgar said. “If you’re overly restrictive, you’re going to alienate a good customer who was trying to make a legitimate purchase.”

Despite these issues, artificial intelligence has the potential to supercharge the fraud defenses of not only merchants but also the payment processors that serve them.

Another area where AI can make an impact at the processor level is in compliance. Payment processors have been increasingly held responsible for anti-money-laundering (AML) monitoring.

In this use case, AI can ensure that processors are compliant by verifying that a merchant account is legitimate. Artificial intelligence can scour the internet and provide troves of data that help processors vet their customers.

“AML is a little trickier because of the amount of data,” Apgar said. “A lot of banks and processors are having trouble with this because just simply the volumes of data that have to be analyzed to be able to detect these patterns. In today’s compliance environment, whether or not those rules continue to be enforced as vigorously as they were in the previous administration is unclear, but that doesn’t mean that AI won’t have a role in that going forward.”

Routing the Transaction

Another operational area where AI will play a larger role is transaction routing. As more payment types have become available, organizations have increasingly explored payment orchestration efforts. Selecting the most efficient payment method can dramatically cut costs and improve the customer experience.

However, determining the right path for sending a payment can be complex, especially when cross-border elements come into play.

Today, many of these platforms are rules-based, whereby the user will program rules to define the process. Some degree of adaptive learning and machine learning still comes into play, but adaptive learning is limited because it can handle only cases that it has seen before. The model understands that when a certain event occurs, a certain result was obtained.

As more variables are introduced, adaptive learning is likely to struggle.

“Machine learning is based on experience with transactions that share similar attributes, but the first time that transaction comes in the door and a transaction with those attributes has never been seen before, how do you make that decision?” Apgar said. “That’s where AI comes in. AI is able to handle broader amounts of data beyond the task at hand, which is how do I route this transaction?”

Pushing the Envelope

Though artificial intelligence can provide efficiency gains throughout an organization, the promise of AI means that it will continue to be implemented in customer-facing situations.

“If you think of AI like a search engine on steroids, it’s extremely useful,” Apgar said. “It creates a lot of efficiencies—especially for merchants—where customers come to the site and say, ‘Hey, I need help finding this; I have a question about that.’ It can bring them right to the point in the FAQ, and some small percentage of inquiries still go to a live operator.”

Although AI has been successful in many chat use cases, some organizations will want to push the envelope.

In fact, some of the world’s most dominant financial companies have already given the technology a larger role. Visa and Mastercard have rolled out platforms built to harness agentic AI. In this model, AI agents can shop and make purchases with little customer interaction.

To some consumers, it would be a substantial boon to simply give AI a general direction—find a 25^th anniversary gift for my wife, for example—and have an agent do all the legwork and make the purchase. However, many customers would be hesitant to give AI the reins due to the tech’s potential to make a mistake, spend too much, or disclose private data to the wrong party.

For these reasons, merchants still must maintain a buffer around any public-facing AI initiatives.

“You never want AI right now to be in the critical path of anything, because AI is found to make mistakes,” Apgar said. “It hallucinates, as they say—it makes up stuff that’s not there. You want to be able to leverage the efficiencies of AI, but you never want it to create a point of failure in a workflow.

“It’s easy to fall into that trap where, as in the chatbot example, ‘AI is handling 80% of the inquiries—what if we just didn’t have staff?’ True, but you’re never going to get to 100%, at least not in today’s technology. At some point in the future, you will, but not now. So you always want to have that backstop, and it’s the same thing if you look at the operational side.”

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The two largest retailers in the world are considering stablecoin launches—moves that could shift a significant volume of transactions away from the traditional financial system.

The Wall Street Journal reports that both companies are exploring this strategy as they eye the potential passage of the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act—a law designed to provide a regulatory framework for stablecoin transactions.

A brand-specific stablecoin could save Amazon and Walmart billions in transaction fees while enabling instant and transparent payments. Th impact could be especially pronounced in cross-border payments, where global retailers often face high fees and delays.

However, there are also concerns that widespread adoption of stablecoin payments could divert billions from the traditional banking system. So far, neither Walmart nor Amazon have confirmed their stablecoin ambitions yet.

Not Alone in Their Ambitions

The retail giants aren’t alone in these ambitions, as the WSJ also noted that travel company Expedia Group and many major airlines have considered stablecoins of their own.

Meta is also working with stablecoin companies to launch its own stablecoin, with cross-border payments as a primary use case. For example, an Instagram creator could receive an international payment in Meta’s stablecoin and bypass delays, fees, and regulatory barriers.

Getting into the Game

Although there are concerns that these stablecoin launches could detract from financial players, more traditional banks are getting into the game themselves. France’s Societe Generale became the first regulated bank to launch its own stablecoin with a euro-backed offering a few years ago, and it now plans to follow this up with a USD-backed stablecoin.

There have also been reports that major U.S. banks like Citi, Chase, Bank of America, and Wells Fargo are considering issuing a joint stablecoin. These financial institutions are enticed by a $250 billion market that already includes a stablecoin from PayPal, and will likely soon include one from Stripe.

Many companies that aren’t launching their own stablecoin are still working to accept coins issued by Tether and Circle. Most recently, e-commerce marketplace Shopify said it would accept Circle’s USDC through a partnership with Coinbase.

According to Shopify, the reason why it is adding this functionality is because stablecoins provide a secure and efficient protocol that can be accepted by the company’s global base of creators.

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