The PaymentsJournal Podcast

As more people choose to bank online, the role of the traditional branch has undergone a transformation. Once the go-to place for every financial need, the branch is now primarily a hub for more complex transactions that can’t be completed digitally or at an ATM.

At the center of this evolution is the interactive teller machine (ITM), which enables customers to connect with a live teller at any time of day, regardless of their distance from a physical branch. In a PaymentsJournal Podcast, Fiserv’s Chris Geganto, Senior Director of Product Strategy, and Craig Demetres, Vice President of ATM Product Management, spoke with James Wester, Co-Head of Payments at Javelin Strategy & Research about how ITMs are driving operational efficiency, lowering costs, and enhancing the customer experience at banks and credit unions across the country.

The financial institution branch is no longer just a place for simple financial transactions. It now serves as a vital connection point between consumers and the FI’s brand, its people, and its promise. Branches blend digital and physical touch points to deliver the kind of seamless customer journey that financial institutions have worked hard to create.

Today’s branches even look different. Instead of a row of teller windows that once felt formal and uninviting, modern branches are open, welcoming spaces designed to foster personal relationships. They’re now tailored to support higher-value transactions rather than routine deposits and withdrawals. 

And while much of banking has shifted online—or to ATMs to a lesser extent—banks and credit unions still need to provide customers with a meaningful, in-person experience.

“We still have a very personal relationship with our bank account, and with our money,” said Wester. “We still want to have a very personal relationship with our bank. Being thoughtful about preparing the branch for that relationship is very important.”

One challenge for every financial institution is balancing automation with empathy. Automation is about being fast and convenient—handling routine, rule-based client interactions quickly, consistently, and accurately. It addresses most of what consumers need from their bank, but it can also feel impersonal.

Empathy sits at the opposite end of the spectrum. It’s thoughtful and personal, building trust and emotional connection, and ultimately deepening the customer’s relationship with the financial institution. It’s also slower and more cumbersome for the consumer, but there are times when it is sorely needed. Filing for a home loan or opening a small business account, for instance, often comes at a critical juncture in a customer’s life.

“Finances really drive the human moments that matter for us,” said Geganto. “When you walk into a branch, you’re freeing your bankers up for those human moments, for those conversations about what matters most in your life.”

Automation doesn’t always have to feel impersonal. With smart design and proactive messaging, banks can provide a seamless handoff to advisors so everyone is working with the same information. While consumers may start with an automated interaction, many will transition to a more personal connection. To keep that experience consistent, FIs must be intentional about embedding empathy into the digital journey that leads to an ITM.

“Although it’s automated, it’s still a personal relationship between the banker and the actual customer itself that directs them to the actual ITM,” said Demetres. “These small credit unions and financial institutions need to make sure that they still have the person there to interact with the customer, whether it be on video or in person.”

An ITM essentially extends the branch experience, expanding service hours and the geographic reach of the branch. It gives consumers the flexibility to conduct transactions on their own schedule, while still providing access to a human when needed.

ITMs also unify the digital and physical channels, bringing channel convergence to life.

“Your brand ethos is coming through that machine because you have trained your universal bankers who are on the other end of that machine in the engagement model that you spent so much time and effort and money to develop,” said Geganto. “It’s being replicated in a digital fashion.”

For any smaller bank or credit union considering an ITM, the first question should be whether the experience can be customized. Can multiple languages be added to support the customer base? Will the voice guidance convey the right tone? Do the visual elements on screen reflect the brand? The automation should feel like a natural extension of the institution, not a generic out-of-the-box solution.

Staffing the ITM is a crucial part of the overall model. The team on the other side of the video must understand that the customer is navigating the system on their own but is seeking guidance. They need to be trained to recognize the types of critical situations that would bring a customer to the ITM, as well as to understand the strategy that the financial institution is deploying.

They also need to monitor the data being collected closely. Reviewing analytics is a necessary part of making sure the strategy is effective and to identify areas for adjustment.

“The banks and credit unions have to make sure they are being efficient while still keeping that human touch,” said Demetres. “They have to see what accounts and transactions are working, while keeping the human involvement.”

ITMs have proven especially beneficial to credit unions and smaller banks that may not have the capacity for a fully staffed branch with extended hours. They can personalize ITMs to their own needs, reinforcing their brand while enhancing the ability to bring a personal touch to customer interactions. Whether a customer needs to complete a simple transaction or a more complex one, whether they require automation or a human touch, an ITM delivers.

“First and foremost, it keeps the human in the loop, because finances are freely personal,” said Geganto. “When you remove the person, finances are just finances. You need the personal touch because it’s about helping them through those life moments. For every consumer you do that with, you’re building trust and transforming them into a brand ambassador for you.”

Demetres added: “The customer needs to know that there’s always somebody there to support them. ‘Oh, I got this now. I’m never going to have to ask somebody how to use an ATM… how to use an ITM going forward.’ That’s a customer for life.”

The post Banking, Reimagined: The Role of ITMs 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.”

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.”

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.”

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.

Customers signing up for new accounts and services can feel frustrated by the hoops they have to go through, assembling information and entering it in complicated, sometimes multiple forms, whether on paper or online. What they may not realize is that the process can be just as frustrating for the people working at financial institutions, or other businesses performing underwriting functions.

Too often, technology forces both consumers and businesses to adapt to outdated onboarding processes rather than the other way around. In a PaymentsJournal Podcast, Penny Townsend, Chief Product Officer at Qualpay, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed how the next generation of onboarding and underwriting procedures could bring greater efficiency and effectiveness for everyone involved.

Onboarding is a financial services company’s first opportunity to build a relationship with its customers, so it’s vital to make the process as painless as possible. Yet too many companies still make it cumbersome. For example:

“When people sign up for a bank account, and want a debit or credit card along with the bank account there are multiple applications they have to fill out,” said Townsend. “If I applied for two or three different services, I likely have to fill in secondary and tertiary applications that don’t copy over the data already fed into it.”

Financial services companies have long been a siloed environment, but many organizations are realizing that by connecting their onboarding processes, they can also streamline their internal systems. For example, it’s possible to combine for a business, a bank account, credit card processing, and ACH transaction processing into one application that flows seamlessly through underwriting.

The key is to templatize the information and present it in a data-driven, no-code way, creating a unified experience across all financial products. The goal should be to shift the effort of customers bending to how the technology, the vendor and the implementation require data to be input to how can we optimize the experience to reduce repetition and breakdown the silos that existing for different financial products. Creating better customer experience and more transparency and integrity in the data used to manage ongoing risk and compliance.

“My team is out there talking to people about how they actually onboard customers,” said Townsend. “Sometimes if some of the data has to change on the application, a new application has to be sent out, creating friction right at the beginning. Some applications are manually underwritten, which means they take the data set, log into the third-party tools, then verify that the data set matches what was on the application. After they’ve done the data verification, they’ll do the physical underwrite, but they’re manually inputting it maybe into two or three different systems for different tracking purposes.

“So if you ask me about how automation helps scale onboarding operations, it’s a game changer,” said Townsend. “Move away from the bespoke applications that people have bought in order to solve problems, and start looking more broadly and more holistically. Ask the question, “how can I delight the consumer when they’re applying for something?” By making the onboarding experience as efficient, effective, and speedy as possible.”

The implications extend beyond onboarding efficiencies. Consolidating multiple workflows into a single system powered by a common dataset not only streamlines operations but also enables businesses to present products together in combinations that align with how consumers prefer to buy them.

“If somebody comes in to open a business DDA, you can ask if they would like to set up merchant services at the same time,” said Apgar. “You’re not making them go through a separate application. And what that does for the customer is that it incorporates multiple products into a single buying decision. With a discrete workflow, after they buy product A, you have to ask, now would you like to buy product B? If you can bundle B with A in the combined onboarding process, that makes the buying decision much easier for the consumer.”

The onboarding application should be able to accommodate a variety of financial service products, treating each application as structured data that can be validated through automated tools. A simple rules-based engine can then provide a clear red light/green light decision on whether to proceed.

The benefits of this approach cascade throughout the organization. As compliance requirements grow more complex, a transparent workflow becomes invaluable. Without technology that consolidates and supports the process, audits are difficult to manage because data is scattered across disparate systems.

This structure also supports risk management throughout the customer lifecycle. Because underwriting data feeds directly into the risk engine within the same platform, all information remains consistent and accessible. If an underwrite needs to be revisited, the data and tools are already integrated. By simplifying the process, organizations can improve quality while reducing expenses.

“We see that a lot in banking from our clients,” said Apgar. “For whichever product the customer requests, the team gathers the underwriting or risk metrics relevant for that product. If the customer wants a different product, they gather additional data from a different database. Measuring compliance and maintaining viability of the customer relationship requires stringing together a whole chain of information that’s not in an essential spot. There’s a ton of room for increased efficiency.”

Townsend added: “One of my dreams is to make that experience be as transparent as possible. We want people to make that critical decision the same every single time, so we can see how that decision’s been made and know that that if I send the same data set tomorrow, the same decisions are actually going to be made.”

This is where artificial intelligence shines—culling through large amounts of data to find patterns and detect anomalies. It’s challenging to maintain a complete 360-degree view of the customer relationship as it evolves. At this point, any organization that automates underwriting is going to rely on AI and rules-based engines.

Every business engaged in underwriting must have a policy reflected in the system in use. Too often, that policy is separated from the actual underwriting process, and people get caught out because they’re not truly following it. The next generation of platforms has the opportunity to bring that policy to life.

“When you start to use all of that intelligence and let the actual policy breathe life within the platform, now you get transparency and true predictability,” said Townsend.

It’s common for organizations to fall short by expecting underwriters to know everything about the policy and implement it manually. By shifting these elements to the platform, businesses can build greater transparency and predictability while also giving underwriters more space to focus on judgment-based decisions. When AI is introduced as a component, it not only adds options and flexibility but also enables the development of policies that are more adaptive—policies that better serve both customers and underwriters.

The post How to Streamline the Onboarding Process and Speed Up Underwriting appeared first on PaymentsJournal.

Amid the rise of subscriptions and digital services, consumers are juggling more bills than ever. In fact, the average U.S. household now pays around 10 bills each month—a growing list that can be tricky to track and manage. While more consumers are turning to their financial institution for help managing these responsibilities, many banks have continued to direct their innovation investments elsewhere.

In a recent PaymentsJournal podcast, Shilpi Mittal, Director of Product Management at Fiserv, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed the current state of bill pay, how the service drives customer engagement, and what’s next on the roadmap for bill pay innovation.

Bill pay services have been a staple at banks for decades. Yet, because most financial institutions have robust, well-established processes in place, bill pay is often viewed as a basic, no-frills offering.

“It seems like the state of bill pay is this thing you must offer because people expect it,” Wester said. “But there are so many other ways that people want to pay bills—whether it’s through digital channels or through a third party. Unfortunately, the bill pay product itself is still that basic portal where you go in, you find the company you want to pay, you enter an amount, and it gets paid.”

While nearly every bank provides bill pay, it remains an indispensable service—after all, paying bills is an unavoidable part of life for most consumers. What’s more, the rising cost of many household expenses has driven the total U.S. bill pay market to new heights, now valued at roughly $4.46 trillion annually.

“That’s not just a utility, it’s a massive consumer touchpoint,” Mittal said. “For years, financial institutions have treated bill pay as table stakes. It just was, so it didn’t get prioritized for innovation and that’s a missed opportunity. Bill pay directly impacts digital engagement, trust, and customer privacy.”

A well-optimized bill pay has a strong correlation with customer retention, in part because it fosters regular, ongoing engagement. This consistent interaction creates more opportunities for financial institutions to become embedded in their customers’ daily lives.

Once customers are drawn into a financial institution’s digital ecosystem through bill pay, many naturally explore additional products and services.

“Be it a mortgage, a car loan, or a credit card—whatever it is—that consumers then say: ‘Hey, this is the place I pay my bills; this is also the place I manage my money; this is the place that I trust for my financial services; let me go look and see where I can find other things,’” Wester said.

An improved customer experience is one byproduct of an efficient bill pay service, but there are many other benefits for financial institutions.

“We partnered with a major financial institution to study this and found that customers who actively use bill pay maintain much higher loan balances, grow their deposit balances faster, and bring significantly higher net profit and profit growth compared to those who don’t pay their bills through their bank channel,” Mittal said.

The impacts go beyond financial metrics. Bill payments drive more frequent logins, especially around due dates. This creates a natural moment of engagement—and if the experience is smooth and intuitive, users will keep coming back.

Banks can capitalize on this behavior in several ways. Historically, bill pay has been desktop-first, but in recent years there’s been a strong shift toward mobile payments. A simplified, mobile-first payment flow reduces friction and abandonment, making it essential for every institution—especially those serving younger customers.

“Legacy bill pay systems are missing the mark on how consumers, especially younger generations, manage their money today,” Mittal said. “Millennials and Gen Z use global banking five times more than their parents. They expect speed, convenience, and a frictionless experience. If it’s slow or clunky, they will abandon it.”

Because consumers are juggling more bills than ever, their payments are often scattered over multiple platforms—biller-direct apps, banking portals, and third-party tools. As a result, many are seeking a centralized, intuitive experience that helps them stay on top of their finances.

“They’re just not looking for alerts, they want proactive nudges, predictive reminders, and instant confirmations,” Mittal said. “It’s about peace of mind. American families pay $14 billion in late fees. That’s not just a financial hit, it’s a stress multiplier. That is why behavioral insights are so critical. It’s about giving people control and reducing anxiety. When you integrate those into the experience, engagement follows. Consumers feel supported, not just served.”

These concerns can quickly mount up. For example, missing a credit card payment can damage a consumer’s credit score, which in turn may hinder their ability to secure an auto loan or mortgage—or raise their borrowing costs.

That’s why more consumers are turning to their banks for help in keeping their financial lives on track. While most banks already offer tools that can provide this support, those tools are often underutilized.

“We now have all this data with these accounts,” Wester said. “This goes all the way back to the idea that the bank is the center of a person’s financial life. We have all this information and we can now begin to start putting in those predictive and proactive reminders. It can be small things, like the ability to know that you can access your paycheck sooner. Those are the types of things that consumers want to see and are responding to.”

“Also, it’s not just getting access to your pay sooner, it’s then being able to pay those bills knowing that you have a due date coming up,” he said. “Being able to apply those deposits to paying those bills, that’s all possible now. But that’s the stuff that we are just not seeing in the way these tools are being built.”

Several factors are reshaping the bill pay paradigm. One key driver is the emergence of real-time payments rails—such as FedNow and RTP—which have raised expectations for instant settlement.

“For the longest time, we argued that consumers don’t really care that much about settlement so long as they know that their payment is being recognized,” Wester said. “In other words, if I go to a third-party biller and I say, ‘I am paying you, please don’t cut off my cable or my cellphone,’ that was sufficient. What we are beginning to see now from consumers is that it’s not just the recognition of the payment, but when is it hitting the account?”

As consumers become more aware of concepts like cash flow and liquidity, this growing financial literacy will further accelerate demand for real-time payment options.

“FedNow is still in the very early stages, but when you look at all the real-time payment networks as a whole, it’s surfacing the need for bringing instant payments to bill pay and aligning it better with consumer expectations,” Mittal said. “I’m hoping it will help speed the process up, primarily from the biller’s perspective.”

“There must be biller adoption of real-time payments in bill pay, which is going to be the longest tail,” she said. “It’s going to take us several years to bring everybody onto this journey.”

Along with advances in payments infrastructure, there have also been substantial breakthroughs in bill payments platforms. For example, Fiserv’s CheckFree Next is designed as a one-stop bill pay solution for consumers using mobile devices.

The platform recently introduced a processing model that streamlines payment flows and enables real-time bill payments. It also allows small and medium-sized businesses to use virtual cards in place of paper checks. Additionally, consumers can pay bills with credit cards on the platform—offering greater flexibility and the opportunity to earn rewards.

“Here is where it gets really interesting,” Mittal said. “We are integrating Zelle, bill pay, transfers and other payment solutions into a single, intelligent, comprehensive payments offering. It’s dynamic, consumer-aware, and designed to meet people where they are. Imagine a system that knows your due dates, nudges you proactively, and helps you plan around your paycheck—all in one place.”

“Our vision is to transform bill pay from a chore into a smart financial assistant,” she said. “Bill pay isn’t just about paying bills, it’s about creating meaningful, recurring touch points that build trust, drive engagement, and ultimately grow value for both the customer and the institution.”

The post Why Bill Pay Is an Underutilized Touchpoint for Financial Institutions appeared first on PaymentsJournal.

In just the first half of the year, ACH payment volume grew by 5.5% on a daily average basis, reaching roughly 17.25 billion payments. The growth is even more pronounced in terms of dollar value, with the ACH Network processing $45 trillion in the first half of 2025—a 6.8% increase compared to the same period last year.

In a recent PaymentsJournal podcast, Michael Herd, Executive Vice President of ACH Network Administration at Nacha, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, examined the state of ACH, the payment types that are driving growth, and the future of the pay-by-bank.

According to Nacha, the ACH Network is experiencing substantial momentum and is on track to add two billion payments in 2025.

The persistent growth signals that the ACH Network is poised to maintain its upward trajectory.

“When I look at the metrics and consider ACH, quite often you’re just looking for general growth,” Riley said. “I look at the total volume of payments and that was solidly up, and the dollar value was significantly up. When you compare that to debit volumes in the U.S.—which only grew by 1%—it’s really significant. I see everything hitting on all cylinders.”

This shift is especially notable because it’s spread across multiple payment types.

First, there are Same Day ACH payments—transactions that clear and settle on the same day they’re initiated. Volume rose by 15% year-over-year in Q2, putting this format on track to reach 1.3 billion same-day payments this year.

“The second area I wanted to call out are business-to-business payments,” Herd said. “B2B volume on the ACH Network increased by over 10%, and this is a long-standing trend in ACH. While there are still pockets of check payments that are in use in the B2B space, I think it’s also clear by now that ACH is the predominant payment method in B2B. They tend to be much larger dollar payments and so that boosts the dollar volume that is moving through the ACH.”

The third area seeing increased activity is consumer payments, which were up nearly 6% year-over-year.

Together, these three segments have significantly expanded overall ACH volume and reinforced its role in the broader payments landscape.

“It’s something that’s really been built into the economy,” Riley said. “When I think of myself as a consumer working professionally since 1980, I don’t think I’ve seen a physical paycheck since then. One way or another, I’m probably doing seven or eight in or out transactions on ACH just personally in a month, so I can imagine how those numbers stand out.”

Within each of these segments, new use cases for ACH are continually emerging.

For example, in the B2B payments space, ACH is gaining traction in healthcare claim payments—transactions made by health insurance payers to medical providers like hospitals, doctors, and dental practices. This area has seen a year-over-year increase of 10% in ACH usage.

“I think there’s a pretty clear use case and benefits there for medical providers to get paid electronically, instead of waiting for a check to arrive in the mail,” Herd said. “I think that’s a clear benefit where even a standard ACH is a much faster payment than that check that will follow at some future date. We’re seeing strong growth there in that B2B vertical.”

On the consumer side, the growing popularity of subscription-based services has led to broader adoption of ACH for recurring payments, including bill payments and donations.

Consumers also frequently rely on ACH for account transfers, both one-time and recurring. The rise of online bank accounts, digital wallets, and other fintech solutions has further fueled the use of ACH for these types of transfers.

Collectively, these segments and use cases also present strong opportunities for the continued growth and adoption of Same Day ACH.

“We’re still seeing good growth in Same Day ACH across all the major ACH use cases,” Herd said. “That includes Direct Deposit of payroll and other consumer disbursements. It also includes consumer payments to businesses and other kinds of account transfers, and B2B payments.”

Amid this adoption, a significant development will impact the ACH Network this year: an executive order signed in March instructing the U.S. Treasury to eliminate paper check disbursements. With limited exceptions, the order directs a full transition to electronic payments for federal disbursements by Sept. 30, 2025, to the extent permitted by law.

“It’s been a long time coming,” Herd said. “We should see additional migration of some volume of federal government check payments to ACH. Financial institutions should be assisting existing account holders that still receive federal government checks with options on how to enroll to receive those payments by Direct Deposit.”

“One other lesson is that with no checks, there can be no check fraud,” he said. “That’s been a driving reason for the federal government to pursue this policy—paper checks have become probably the single largest source of fraud committed within the space of federal government payments.”

Another major factor influencing the ACH Network is the growing adoption of pay-by-bank and open banking technologies. In this emerging model, consumers no longer need to manually enter their routing and account numbers for each transaction. Instead, they simply authorize a business or organization to securely access their banking information directly from their financial institution.

“That should make enrollment for ACH easier and more seamless to the consumer, particularly in an all-digital or a mobile-first environment,” Herd said. “Many younger generations of consumers who’ve never had a checkbook don’t know what those routing and account numbers are.”

“This is a method that should overcome that barrier to being able to enroll to use ACH payments, so we’re going to see that continue to expand,” he said. “Nacha currently has a work group that is looking at potential benefits and risks of using pay-by-bank in the marketplace.”

The transition from paper checks to digital payments has long been a topic of discussion in payments circles, with the shift unfolding over several decades. However, there are signs that this momentum is now accelerating.

“In the federal government space, it’s been official policy to mandate the use of electronic payments since 1999,” Herd said. “In fact, one of my first assignments when I joined Nacha was to participate in the in the campaign around EFT ‘99 use. Without getting into all the dirty laundry, it’s taken a long time to get to the point where just about 99% plus of federal benefit payments are made using Direct Deposit or Direct Express card.”

“There’s that last mile to go to get as close to 100% as possible, so it’s exciting to think that may actually happen,” he said.

The post Exploring the Factors Driving Continued ACH Growth appeared first on PaymentsJournal.

The passage of the GENIUS Act in the U.S. has brought stablecoin interest to a fever pitch in recent months. However, even as more of the world’s leading organizations consider launching stablecoin, the use cases for these fiat-backed assets are still being unlocked.

In a recent PaymentsJournal podcast, Nabil Manji, SVP, Head of Fintech Growth and Financial Partnerships at Worldpay, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, highlighted payouts as one of the most intriguing applications for stablecoins—a model that could offer dramatic benefits for merchants.

In addition to regulatory clarity in the U.S., there has been global momentum toward more transparent digital asset regulations. For example, the European Union recently passed its Markets in Crypto-Assets (MiCA) legislation.

This improved regulated environment has made the space more attractive for both traditional financial institutions and corporates to explore digital assets. These organizations are considering stablecoins for several reasons, including payments, corporate treasury management, and yield generation.

The combination of regulatory clarity and institutional interest has dovetailed with broader payments trends to bring stablecoins into the spotlight.

“What I think makes the timing almost a perfect storm in a positive way is in many markets around the world, we’ve had domestic real-time payments,” Manji said. “The big outlier has been the U.S., where up until recently with RTP and FedNow, there hasn’t been relatively ubiquitous real-time payments.”

“Very quickly, the world’s largest economy and the participants in it, are going to grow accustomed to having real-time payments for domestic use cases through those payment rails,” he said.

In addition to the surge in real-time payments, cross-border e-commerce has continued to grow significantly, driven by factors like marketplace shopping, the gig economy, and social media commerce.

Consumers increasingly expect these trends—real-time payments and cross-border transactions—to converge, and they don’t understand why an adequate solution isn’t yet available.

Stablecoins are among the leading contenders to fill this gap because transactions are instant, efficient, and borderless. While their surface-level utility as a digital representation of the U.S. dollar is a game-changer, it’s only the beginning of what the technology can do.

“It’s becoming clearer, even to savvy payment folks, that it is different from what we have had in the past,” Wester said. “That was one of the misconceptions for a while, it was ‘Don’t we already do something like that?’ Well, not really. Once you begin to understand what stablecoins can do in terms of being a programmable digital bearer instrument, that idea becomes very powerful, and people begin to explore what they can do with it.”

While payment acceptance has traditionally taken precedence, payouts are at the heart of many merchants’ business models. These companies are searching for ways to make real-time, inexpensive payouts to beneficiaries, which could include employees, vendors, customers or other third parties.

These payouts are often high-frequency and low-value—such as those a marketplace might make to its sellers or a gig company to its workers. They could also include an airline reimbursing a passenger for disrupted travel plans, or an online gaming company paying out winnings to a user.

Often, these merchants need to make payout in a relatively high number of currencies and geographies. Additionally, many of the best candidates for stablecoin payouts serve unique customer bases.

“You layer on top of that the type of customers of theirs that would want to receive a stablecoin instead of fiat currency,” Manji said. “Then you layer on top the recipients that are in places like countries that have volatile currencies, or countries that the population is underbanked or unbanked.”

“Also, populations where they’ve got a relatively young age skew and people that want something like a stablecoin, because they’re comfortable with investing and generating yield on a stablecoin or operating something like a crypto wallet,” he said. “Those are the two lenses where this makes sense to offer to customers.”

Though stablecoin payouts may seem like a no-brainer given the regulatory environment and consumer familiarity, many merchants are still concerned about the implications of adopting cryptocurrency for payouts.

“One of the problems with payments people is we’re fascinated with payments, thinking everybody else is fascinated with payments too, and they’re not,” Wester said. “They just want to make sure that their money moves. We started talking about blockchain, digital assets, cryptos, stablecoins and how cool it is from a technology standpoint. All they did was look at it and say, ‘Wait, how are payments done? This sounds complex.’”

However, advancements in technology have made global payouts using stablecoins virtually indistinguishable from payouts in fiat currencies.

For example, on Worldpay’s platform, a merchant can fund their account in various fiat currencies. They can then initiate a payout request via an API call or by uploading a batch file containing hundreds or thousands of payments requests. Alternatively, they can log into the online portal to submit a one-off manual payment.

Regardless of the method, the payment instruction determines which currency should be deducted from the merchant’s account and which currency should be paid out to the recipient.

“For example, they may say, ‘Use some of my USD balance that I funded you to payout one of my marketplace sellers in Turkish lira,” Manji said. “We have connections in our platform to payout in over 130 currencies in over 180 markets, of which approximately 80 are on real-time payment rails. We can, in most cases, execute a relatively instantaneous payout to a beneficiary in countries covering most of the world’s GDP.”

The addition of stablecoin payouts to the platform means that Circle’s USDC has essentially become the 131st payout currency—making the adoption of stablecoin payouts as simple as the click of a button.

“There’s no new integration; there’s no new platform; there’s no new logic,” Manji said. “All we’ve done is in the field in the API where you put the destination currency, instead of putting something like Turkish lira or Argentinian peso, you just put USDC. Instead of sending us an international bank account number or a routing number and account number, you send us a wallet address and we take care of it from there.”

“So, the merchant doesn’t need any crypto wallet,” he said. “They don’t need to hold USDC. They don’t need to touch USDC. They don’t need to know what chain the customer’s wallet is on. They don’t need to screen the wallet. We take care of all of that for them.”

This functionality can be a game-changer for merchants, but it is just the beginning of the road for stablecoins. Once organizations become accustomed to stablecoin payouts, they will begin to recognize other benefits, such as the ability to automatically execute transactions.

“The people who seem to light up the most when you talk about programmability are corporate treasurers,” Wester said. “They’re like, ‘I can do a lot of stuff that right now is either a manual process or an inefficient process.’ I think that is going to be an area where we’re going to see a lot of development.”

The recent surge of stablecoin-related news has led some to wonder when the hype might fade. However, the efficiencies and capabilities of stablecoins are likely to keep them at the forefront of the financial services industry for many years to come.

“There is this increasing interest from traditional financial institutions, from the payment ecosystem, from our clients, and from consumers to start using stablecoins in a meaningful way,” Manji said. “I think there’s this real interest now—across the spectrum—that’s giving us a lot of excitement in terms of how we’re thinking about the space and how we want to invest.”

The post Amid Surging Stablecoin Use Cases, Payouts Stand Out appeared first on PaymentsJournal.

One of the most effective tools in the fight against cybercrime is information sharing—particularly through anonymized consortium data signals—a practice increasingly referred to as cyber fusion. Despite its promise, many institutions remain wary of collaborating in this way, often even within their own organizations.

Greater cooperation—through shared data and interoperable fraud, anti-money laundering, and cyber tools—not only enhances the ability to detect and prevent financial crime, but also delivers measurable benefits to the bottom line.

In a PaymentsJournal Podcast, Teresa Walsh, an intelligence professional with over 20 years experience in both the government and financial services sector, and Tracy Goldberg, Director of Cybersecurity at Javelin Strategy & Research, spoke about the advantages of adopting cyber fusion and the key barriers that keep financial institutions from pursuing it more widely.

The financial industry is notorious for operating in silos, with people focused myopically on their own teams’ responsibilities—often without considering how one function impacts another. As organizations network and build stronger internal connections, it becomes clear that no single group holds the complete picture. Combating cybercriminals effectively requires consolidating information and fostering collaboration across functions.

Companies approach cyber fusion in different ways. In some cases, it involves integration within the information security department—bringing together not only the cyber threat intelligence team but also incident responders, forensic teams, AML teams, and Financial Intelligence Units. Each of these groups plays a role in the broader effort.

“First you have to understand what exactly you’re fusing,” said Walsh. “I see an increasingly prominent blurring of lines between what we would define as cybercrime versus nation-state or cyber espionage attacks. We need to get outside the box a little bit and realize that whether it’s a scam that’s impacted a consumer or a phishing attack that has compromised an employee, all of this ties together. The sooner we can connect those dots and share information across these different industries, the better off we’re going to be long-term.”

Cyber fusion can start within the organization by cross-sharing information and tools across departments such as AML, communications, and HR. From there, the effort can expand to include cross-industry collaboration and broader information sharing. Cyber fusion should remain fluid. There’s no way to predict what the landscape will look like in five years, so it’s essential to develop a strategy that allows for adaptability and agility.

Intelligence needs to be integrated into the process, supporting decision-makers at all levels. It shouldn’t be produced for its own sake—it must serve a clear purpose.

“You’re trying to deliver intelligence to help people looking at expanding out into a new country or deciding whether or not the technology stack that they currently have is good enough, and you’re helping them make those decisions,” said Walsh. “They need objective intelligence that’s not just about the technical ones and zeros. Most risk equations are going to talk about the threat that’s out there.”

“There’s a certain threat actor, there’s a certain tool that they’re using, and it could present a risk to your company,” she said. “What is that and how much exposure do you have? Risk managers need to have good intelligence to help them understand that threat. Analysts try to bring to the table a good understanding of that threat intelligence landscape, helping risk managers decide whether we’re doing well, and if not, how can we do better?”

Cyber risk goes beyond technology; it also involves the human element, where individuals can be psychologically manipulated. Sourcing threat intelligence experts may require thinking outside the box, including those with backgrounds in psychology or behavioral analysis. Technology has its limits, especially as many risks stem from socially engineered attacks, such as phishing texts or direct communication through social media.

“The threat intel community has been thinking along these lines for a long time, but it has to get back to the decision-makers,” said Goldberg. “It’s going to be a cultural change from the top down, and we have to get buy-in from all of these players to move in a direction where cyber fusion can be successful.”

Most industries could benefit from creating a cyber fusion by connecting cyber teams with other internal departments. Valuable insights often emerge from stepping out of isolated workflows and engaging in open dialogue across teams. Understanding what others are working on, how different efforts intersect, and where collaboration can enhance outcomes is key to strengthening cybersecurity efforts.

“Whether it’s a small group of internal people or peer organizations that would be considered competitive to your company, you’re all basically trying to do the same function,” said Walsh. “Some of these threats are not just targeting you, they’re probably targeting a lot of different companies just like you as well. If we want to fight cyber criminals that are trying to steal information or extort money from your companies, we need to work together. We all have pieces of the puzzle, but also it helps people just on a psychological level to know that they’re not alone.”

Sometimes the job can feel overwhelming, and it helps to connect with someone who has already been through it—or is navigating it right now. Even someone in another department might be working through the other side of the same challenge. As Walsh noted, don’t hesitate to reach out and start a conversation.

“Once everybody starts bringing all that knowledge together, whether it’s actual intelligence or just even the best practice of how to do the job, it crowdsources all of this information together,” said Walsh. “You’re no longer just an army of one trying to figure it out by yourself. You have the capabilities of a strong network around you. I’m always going to be the champion of consortiums, whether they’re official, unofficial, big or small.”

Transactional data can be anonymized to help these consortiums function. Some players in the space—whether on the payment side or within digital banking platforms—have access to significant amounts of data and can observe transactions across multiple organizations. Anonymizing this information could support the formation of a consortium that brings all of these players together in a trusted environment.

The trust factor remains one of the biggest challenges. Many financial institutions are hesitant to share data due to concerns about overexposure or violating data-sharing regulations. If they do share data, there’s a risk of repercussions from law enforcement or regulatory agencies, potentially resulting in fines or other penalties.

“We have to get outside some of that thinking and ask vendors to step up to the plate and help with some of this consortium data sharing,” said Goldberg. “That’s where we need to have conversations with the regulators. When you talk to regulators, they’re surprised that people are hesitant about sharing different types of threats. That’s where clarity is needed, especially when we’re going cross-sector because the financial regulator, for instance, is not going to tell a telco what to do.

Walsh added: “We need more open conversations to make sure that we’re not putting roadblocks in front of ourselves, because the bad guys definitely aren’t. If we keep putting roadblock after roadblock in front of ourselves and taking a risk-averse approach of why we shouldn’t be working together, they’re going to be able to get away with what they’re already getting away with, which is billions of dollars worth of cybercrime.”

The post Share and Share Alike: The Promise of Cyber Fusion appeared first on PaymentsJournal.

Many organizations treat their reconciliation and reporting as mere check-the-box activities, investing only the bare minimum to remain compliant. However, companies that deprioritize these critical back-office functions risk being caught unprepared when faced with a more stringent regulatory environment.

In a recent PaymentsJournal podcast, Roger Binks, Chief Commercial Officer at Kani, and James Wester, Co-Head of Payments at Javelin Strategy & Research, explored the current state of the back office, the challenges organizations face, and how businesses can modernize their reconciliation and reporting functions amid regulatory headwinds.

Research from Kani found notable trends among payment leaders. Just over a quarter of respondents said their firms were using fully automated tools, while many still relied on spreadsheet-based solutions for this complex process.

Nearly two-thirds of respondents also reported frequent data errors during reconciliation—errors that are expected to become more expensive and time-consuming as compliance requirements increase.

“The regulatory environment is becoming way more prescriptive than it ever has been,” Binks said. “Reconciliation reporting outputs not only have to be consistent, but they have to be traceable. If you’re having a manual process in there, the workarounds that you have to put in place to make that traceability consistent is really tough.”

“In the UK, the FCA is extending operational resilience requirements into payments,” he said. “What this means is daily reconciliations, real-time controls, and clearly documented processes are going to be mandatory. They’re going to be the sort of baseline of everyone’s business.”

As compliance tasks continue to grow, they add pressure to already strained operations. The report found that roughly 80% of respondents often miss reporting deadlines.

These difficulties will mount for organizations that don’t take steps to modernize.

“Things like reconciliation, reporting, compliance, these are things that we all talk about and we have for a long time,” Wester said. “We have talked about workarounds and band-aids and fixes and manual processes that are employed, while we also know that regulatory compliance and all of the things that that entails, it’s only getting more complex.”

“It’s a known issue, we all talk about it, and yet it continues to be something in 2025 that we are still talking about,” he said. “I’m almost sad about it. It’s almost like, ‘When do we start fixing some of this stuff, especially when we know that regulation and compliance are not going to get any less complex in the future?’”

One reason manual processes and reporting issues have lingered is that they haven’t been a priority for many organizations.

“Whenever you see regulation or some type of mandate for the way a report must be submitted—or            anything like that—a financial institution, a bank, or a business, they often look at what they must do and they work back from there,” Wester said. “It’s almost as though they try to find the least efficient way to do it. To me, I think we look at it the wrong way.”

Instead of viewing compliance as a chore, organizations should recognize that the reporting process produces a critical output: data. Through this lens, reconciliation and reporting become valuable assets—ones that can deliver dividends by offering deep insights into operations.

Beyond increased visibility, a modernized reporting process also offers tangible efficiency gains.

“We asked some questions around how long it took for people to prepare data—just getting it ready for the reconciliation process,” Binks said. “We found that the average UK payments business spends about three hours preparing data before reconciliations can even happen. With that mandatory daily reconciliation process being a requirement—if you work that out—it’s about 700 hours every year spent just preparing data.”

“Think of what you could do with 700 hours a year in terms of other work,” he said. “There’s some stark numbers in there which we can’t ignore.”

As organizations begin updating their back-office processes, many will face the age-old buy-or-build dilemma. However, with the compliance bar rising rapidly and shifting daily, companies that choose to build solutions face significant challenges.

One of the main hurdles to in-housing is ensuring the organization has the right resources in place—starting with personnel. But maintaining a dedicated compliance team presents its own set of issues.

“It depends upon the way the internal organization is structured, which is oftentimes around a particular group or a particular person or a particular unit that’s built a certain way,” Wester said. “Just training is usually very inefficient. If that person ends up leaving—if the person in accounting retires and they were the one that knew how everything was put together—then it becomes a process of unpacking what they did to make that process work.”

Beyond assembling the right team, organizations must also possess the technical expertise and engineering capacity to develop an in-house solution. This is often a struggle: 60% of surveyed firms with internal solutions reported that resource constraints directly impacted their business growth and agility.

Many of these firms also noted that generating reports was too time-consuming, and that operating systems across multiple payments channels remained a challenge. Additionally, maintaining an in-house solution is a continuous process, one that organizations simply aren’t equipped to take on.

As a result of these challenges, few businesses are pursuing the in-house route. In Kani’s survey, less than 10% of respondents said their firm had built its own system.

“If you’ve in-housed it, all of those different changes—even if they’re internal requests—everything becomes a dev ticket,” Binks said. “Everything becomes an item on a list that someone’s got to deal with. If that’s not your main business, suddenly you’re in the business of building and running a reconciliation team, and that’s not really your core.”

Despite challenges with in-house processes, many organizations continue to lean on them—often because they’re unaware of better alternatives.

“I think that’s one of the problems for people who are in compliance or operations—they don’t know what they don’t know sometimes in terms of what is available,” Wester said. “But also I think that sometimes operations and compliance people are not good advocates for their own needs. Sometimes they’re not tied to revenue, so building a business case for something like a solution in the back office can be a little bit difficult.”

Organizations that begin exploring potential solutions can uncover powerful benefits. Platforms such as Kani manage every aspect of the compliance process, including ongoing maintenance and upgrades.

Another advantage of partnering with a provider is gaining access to the collective knowledge and experience across their entire portfolio. This enables them to stay current with regulatory changes and make proactive improvements to the platform.

“It’s about operational agility,” Binks said. “This isn’t about just speed, it’s about control, traceability and repeatability in a process that you can trust. If you can get that, then you’re in a good place, but it’s a challenge.”

“I would think about getting off Excel and manual systems,” he said. “It’s time to bite the bullet. People just need to work out when, and accept the fact that it’s coming at some point. The back-office efficiency Holy Grail is there—you don’t have to go and build it yourself.”

The post With Rising Compliance Demands, Reconciliation and Reporting Take Center Stage appeared first on PaymentsJournal.

When credit unions look for ways to improve service for their members, accounting systems may not be the first thing that comes to mind. But when Texans Credit Union upgraded its accounting platform, the benefits cascaded throughout the organization—saving money, streamlining operations, and even boosting morale.

In a PaymentsJournal Podcast, Tracy Montez, SVP, Controller at Texans Credit Union, and LaChrisha Dourisseau, Vice President of Solution Consulting at Fiserv, shared a behind-the-scenes look at their migration to a new account platform, Prologue Financials. They were joined by James Wester, Co-Head of Payments at Javelin Strategy & Research, who contributed additional insights on the discussion.

With $2.2 billion in assets and more than 130,000 members, Texans Credit Union was eager to enhance service delivery. In 2020, leadership began exploring ways to scale operations for greater efficiency and speed. With a new community charter allowing them to serve all of Texas, Texans Credit Union also set its sights on growth.  

“One of the things I wanted was an upgraded general ledger system,” said Montez. “While a core general ledger is great for processing loans and deposits, they’re not made with accountants in mind, so things take a lot of clicks and a lot of time. We went on a journey to find a product to help us.”

Under the old system, sharing financial reports with the CFO meant exporting data to Excel. If discrepancies arose, accountants had to manually trace each line—determining which combination of four GL accounts fed into a number, isolating the variance, and then investigating the source within the ledger.

“You would think a financial institution would be the place that would have the latest and greatest,” said Wester. “But oftentimes it’s folks in the back-office that are the ones that are having to make do.”

To solve these and other challenges, Texans Credit Union adopted Prologue Financials, an accounting system from Fiserv. The workflow within Prologue saves time and increases efficiency across the entire organization.

Previously, closing the books took the team approximately five days; now they consistently close in four. When a three-day close is required, like Thanksgiving, they deliver.

“It’s a lot easier to get the reports we need to do general ledger balancing in accounts payable,” said Montez. “It helps with our month in review. When I’m going over financials with the CFO, if he has a question about a variance, we pull up prologue on the spot to view what caused the variance.”

It’s not just about efficiency—it’s about morale. After all, nobody loves accounting except accountants.

“I can’t tell you how many managers have come up to me telling me how much they love the AP workflow because it saves them so much time,” said Montez. “People turn their invoices in faster because they don’t have to allocate an hour to approving all their invoices.”

Texans CU ended up converting in January—typically one of the busiest months for accounting—but it still managed to close January’s books within its usual five days.

“We had a good conversion experience,” said Montez. “The data was clean and the people that helped us where experienced. It let us add on a lot of new processes and GLs that we could reconcile without adding any people. We didn’t add another person to our team until late in 2024, whereas I think if we would have been on our old general ledger system, we probably would have had to add that person a year ahead of that schedule.”

Another advantage for Texans Credit Union was realizing just how much time they’d been spending on manual tasks. Once those processes were automated, the work became noticeably easier. And with remote work, it’s no longer practical to walk over to a filing cabinet to hunt through files. Now, everything is right there on the computer.

Don’t think of the general ledger system within a financial institution as a cost center. Think of it as an investment in the credit union’s or bank’s ability to expand and build out new products.

Banking is not going to get any less competitive. The financial institutions that modernize their back-office will be the ones better positioned to expand, scale, and compete.

“Don’t be afraid to dream that it can be better than what you have,” said Montez. “Think through how your life could change and what you could be doing instead of the monotonous task you’re doing today. Nobody loves doing a conversion, but I promise it’s worth it.”

Dourisseau  added: “Utilizing Prologue makes accounting fun again. While the accounting function is a cost center, it can add tremendous value to the organization, making it more effective, efficient, faster, leaner, and stronger. It allows that talent within the accounting function to be deployed to other projects that add value to the bottom line. That may not always be hard dollars, but these soft dollars are meaningful and can provide the competitive edge in this highly competitive environment of the financial services industry.”

The post What Texans Credit Union Learned from Upgrading its General Ledger appeared first on PaymentsJournal.

As the technology behind payments processing accelerates, it’s also reshaping how merchants need to think about the ways their customers pay. Increasingly, acquirers are discovering that by focusing on areas like reconciliation and streamlining the payments workflow, they can build stronger relationships—not only with their customers, but also with their employees.

In a PaymentsJournal podcast, Highnote’s Chief Revenue Officer, TJ Grissom, and James Wester, Co-Head of Payments at Javelin Strategy & Research, to explore how Highnote is helping drive the unification of the payments workflow and the benefits this trend is bringing to retailers and other payment acquirers.

Most merchants just want to run their business. They care a great deal about the business side of things, but not so much about the payment side. That can make it difficult for payment vendors to know which features to highlight, because at the end of the day, the acquirer is primarily concerned with simply being able to accept a payment.

Once they’re confident in that, merchants are more willing to explore which bells and whistles might be right for them. And when they take the time to learn more about the process, they often discover the many ways payment solutions can positively impact their bottom line.

“There’s been an awful lot in the press lately about what core payments really look like,” said Grissom. “The word ‘ledger’ has popped up in payments more in the last three years than it probably had in the previous 50. The core understanding of what true reconciliation looks like—being able to track a payment through its entire lifecycle—has just jumped off the page. We are seeing tremendous value in modern platforms—like what we’ve built at Highnote—that bring to bear a truly unified payment lifecycle.”

As a result, merchants are viewing payments not just as a mechanism to grow revenue, but also as a means to create stickiness—with their customer, their vendors, and even their own employees. They’re seeing payments as a way to bring cohesion to every step of their value chain.

“When we speak with merchants, we think they’re going to start by saying, ‘Let’s talk about core acquiring and the issues we want to resolve on that front,’” said Grissom. “It’s incredible how quickly it turns into, ‘I have a consumer issue that I want to target as well,’ or ‘I have an employee issue.’ By bringing a more unified platform to bear, the conversation quickly switches from money in to money out.”

Of course, the predominant concern remains cost, which varies for every customer. They each consider it from different angles and paradigms. But they all want two things. First, to reduce the core cost of payment acceptance. Second, to minimize the opportunity cost.

“If you’re not closing the payments loop rapidly enough or getting your money settled quickly enough, it’s costing you in many other areas,” said Grissom. “It’s not only costing you in core time to money, it’s costing you in experiences.”

Customers are starting to broaden their understanding of what that opportunity cost entails. There is a real loss in not having payments operate as efficiently as possible.

“We used to not be able to do a whole lot with the settlement—it was just cost,” said Wester. “Now vendors can do something to influence that. You begin to see different parties that might not have been at the table from an acquirer standpoint when they’re talking to a merchant. It’s no longer just an accounting function. It might be a treasury function, or a customer facing discussion.”

More merchants are viewing their acquired revenue stream as an asset that can help them address other challenges. They’re seeking opportunities to use payments to make the ecosystem work more efficiently.

“I love the example of restaurant ecosystem with its fully integrated vertical SaaS solutions,” said Grissom. “15 years ago, solution providers in this space were doing incredible work to acquire funds for you and give you lines of credit and working capital because they had direct insight into your business. We can do that in a really low-risk way.”

That was the first big step in the direction of seeing the payment process as a cohesive solution, which has since expanded to other use cases. One of the biggest problems in the restaurant space is retention of talent, especially servers. Now, they have found ways to use payment assets to create stickiness within their own employee base. It makes a difference when a restaurant can pay out tips in real time—directly onto an open-loop card that employees can use on their way home—enabled by embedded capabilities Highnote makes possible.

With modern platforms that can be built out, payments can be customized—not just for the hospitality industry or types of restaurants, but even tailored to the individual restaurant itself, based on what that particular owner wants to do with the point of sale.

The bottom line for merchants is clear: they no longer have to settle for limited payment options.

“You can’t build what we’re talking about on legacy infrastructure, and you certainly can’t build it by trying to piece together four or five different providers across these different veins,” said Grissom. “Take a step back and ask: If you had your preference, how would this entire lifecycle work? What value could you bring? What operational inefficiencies could you get rid of by bringing more cohesive solutions to market?

“As the person acquiring those funds, you do have the power. You’re the one with the leverage and you should press to understand the value that your providers can bring to the table for you.”

Two decades ago, acquirers were primarily focused on reducing the total cost of payment acceptance. The main value-add was simplifying the process and proving transparency around fees-just knowing what you were paying was a win.

Today, however, the value equation has changed. Beyond just price, merchants can evaluate factors such as ease of acceptance, the type of equipment offered, settlement speed. and the range of payment rails available—including emerging ones that may become viable in the near future. “It makes the job a lot harder now, but the days of payments as a necessary evil should be behind us,” Grissom said.

The post Why More Merchants Are Centralizing Their Payments Infrastructure appeared first on PaymentsJournal.