PaymentsJournal

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• Serving a Segment of One: The Race to Stay Top of Wallet 11.06.2026 15мин

  Artificial intelligence has raised consumer expectations. Today, people can create a personalized event invitation, social media post, or digital experience in seconds, so why does the payment card they use every day still feel generic? That question is driving renewed interest in payment card innovation, including personalization, premium materials, digital integration, and stronger security features which continue to influence what consumers want from the cards in their wallets. In a recent PaymentsJournal podcast, Brent Bowen, Senior Vice President and Head of Sales for Financial Services Solutions at Giesecke+Devrient, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, discussed the evolution of card design, the impact of the digital landscape, and the role technology is playing in the future of card innovation. The overarching message: cards remain the cornerstone of financial services product lineups, but staying top of wallet is increasingly challenging. Pushing the Unboxing Envelope This workhorse role of payment cards has long offered a branding opportunity for banks and credit unions, as well as digital-first firms and fintechs whose card offerings may be one of their few tangible links to customers. This opportunity is only likely to increase, as data from Nilson found that purchase volume on the leading card brands rose 6.4% last year, despite continued inflation and economic pressures. “The card will never go away, no matter how things expand in the digital space,” Riley said. “It becomes the way that a financial institution—whether it’s a fintech, a Wall Street bank, or a Main Street bank—can present themselves to their customer. It goes in their wallet every day and it’s an important part of the relationship. When you start building the value proposition for a credit card, the card itself comes into play.” A focus on individual lifestyles has fueled demand for special cards, although premium in cards doesn’t always mean gold-plated. A strong consumer segment is drawn to eco-conscious cards made from wood or recycled plastics. Others may prefer ceramic or similarly distinctive materials t while opening the door to more innovative designs. The popularity of premium cards has even turned receiving them into a social media moment, with many consumers sharing the unboxing experience online. “Many fintechs have pushed the envelope, no pun intended, with that unboxing experience, and that has created some unique opportunities to differentiate themselves from a branding perspective,” Bowen said. “These products and services reflect the consumers’ personalities and values. They want that cardholder experience to be delivered the way they want it and in the shape that they expect it to be.” “Whether it’s maximizing reward points or travel points, whether it’s lowering fees and interest, or even security and convenience and speed—those are all things that consumers are looking for in their payment products today,” he said. “Card products help differentiate that in the marketplace.” Digital and Physical Convergence Although physical cards retain strong tactile appeal, delivering a robust digital experience is equally important. This is no small feat, as e-commerce, AI, and social media have raised expectations for communication and product delivery. The convergence of physical and digital products is another key trend transforming payment cards. For example, a consumer attracted to a metal card as a status symbol also expects the convenience of loading the card into a digital wallet for e-commerce transactions. This digital optionality is critical not only for convenience, but also for driving customer engagement. As a result, speed to market has become critical for issuers seeking a return on investment. It also aligns with another growing consumer preference: constant innovation and access to the “next big thing.” AI is helping drive these expectations by giving users immediate feedback and personalized experiences in seconds. At the same time, the technology could prove to be a gamechanger for issuers. “One of the big things that is coming into our market is this AI world,” Bowen said. “G+D has a AI card design tool, so you as a consumer can use this AI generation and say, ‘I want a puppy dog sitting on a beach drinking a cool drink’, or apply images that have special value for you, and it will show you your card right there. The Influence of Security Alongside these expectations for speed and customization comes an equally strong expectation of security. As the digital economy has expanded, so too have vulnerabilities to fraud. These threats are accelerating the integration of advanced security standards into payment card technology. For example, the Fast IDentity Online (FIDO) standards are passkeys bound to a device to help mitigate password vulnerabilities and resist phishing attempts. When paired with EMV (Europay, Mastercard, and Visa) standards and near-field communication (NFC) contactless payment technology, authentication can be significantly enhanced. “That security is going to drive not necessarily the design of cards, but the way the cards are used in the marketplace,” Bowen said. “If I am a consumer of a bank or a fintech and want to make a transaction, one best way to make sure that I am talking to who I’m talking to is to verify the phone credentials.” “If it’s a high-dollar transaction, I might want to verify the person using that phone and ask them to tap their payment device against the phone to authenticate or verify that they are who they say they are,” he said. Biometric authentication is another major security trend. The widespread use of fingerprint and facial recognition on smartphones has prompted pilots in additional use cases, most notably payments, where the security benefits are clear. While a growing segment of consumers is security-conscious and would welcome this added layer of protection, mass adoption of biometric cards is likely still years away. Still, for certain segments and use cases, biometric cards could hold substantial appeal. After all, security is one of the main reasons card payments have become a dominant payment method. “That’s what is core to the card business, the irrefutability of transactions,” Riley said. “Without that level of confidence, there would be no card business. We’ve got to be able to ascertain not only is there value associated with the open credit line, but is it the customer making the transaction or the authorized user?” The Fight to Stay Top of Wallet All these trends—stronger security, hyper-personalization, and the convergence of digital and physical experiences—will continue to keep payment cards in consumers’ wallets for years to come. Even so, differentiating in a highly competitive market and staying top of wallet remains a challenge for issuers. For organizations looking to acquire customers more efficiently and drive card usage, the answers may not come easily. One place to start is with the customer. “It’s this granular marketing mentality of being able to hyper-personalize that card product into the consumer’s hands, so that it feels like it’s coming specifically to me, Brent Bowen, and I’m not just one of the masses,” Bowen said. “These advanced personalization strategies, in my estimation, can increase revenues 15% to 20%.” “There’s also the ability to reduce the acquisition costs for these card programs,” He adds: “Personalization can drive that cardholder experience.” This evolution underscores how cards have become critical ambassadors for financial services brands. More than ever, organizations now have the tools to maximize the value of these offerings. “It’s personalization and customization of individual packaging and a marketing-to-a-segment-of-one mentality,” Bowen said. “We’re moving to a world where the consumer wants their card to be unique, instantly issued, and personalized, almost in real time.” “AI can help drive all of those things, either in the back office or on the front end from a design perspective,” he said. “It can help provide an experience that a consumer is expecting of today’s world. Where is my card, when am I going to get it, and what’s it going to look like?”
• The Future of KYC Is Layered—and Data-Driven 09.06.2026 13мин

  Know Your Customer rules were designed to stop financial crime, but in practice, they are increasingly being bypassed by both human error and machine-generated deception. Last year, Barclays was fined £42 million (roughly $56.9 million) for failing to properly vet clients for money laundering risks. In this case, the UK lender had access to all the information required to flag the offending clients but failed to follow through. More broadly, similar issues persist across the banking sector. In many instances, institutions conduct perfunctory KYC checks during onboarding but fail to maintain ongoing monitoring. It is often only after the fact that they discover their “verified” customers had been bribed or coerced into becoming money mules. Meanwhile, the threat landscape itself is also evolving. In a growing number of recent cases, cybercriminals have used technologies such as artificial intelligence to generate convincing fake documents and synthetic identities capable of bypassing financial institutions’ verification protocols. Taken together, these challenges are driving a broader assessment of the KYC model. In a recent PaymentsJournal podcast, Jon Jones, Chief Commercial Officer at Data Zoo, and Jennifer Pitt, Senior Fraud Analyst at Javelin Strategy & Research, discussed how these risks are accelerating the evolution of identity verification, and how trusted data within a layered approach has become essential to identifying and addressing modern fraud threats. Establishing Trusted Registries Although the pandemic is often credited with accelerating the shift toward digital identity proofing, the change had already been underway for years. One key driver has been the growthof the digital economy, which has helped organizations build substantial datasets on users’ biometric information, behavioral analytics, and device intelligence. While this data can be a powerful tool for identity verification, it is of limited value if it is inaccurate. “The role of data in KYC is becoming increasingly important and it comes down to one word: trust,” Jones said. “The advancement of AI has resulted in single-layered solutions becoming somewhat compromised and institutions increasingly need to leverage authoritative data. For example, checks through government or credit-based authorities have become table stakes going forward.” “If you look at fake images and documents, it’s very easy to have them created now,” he said. “Creating a synthetic identity from an image or a document is not that hard, but maintaining the presence and consistency across government records or credit bureaus is much harder. It requires the need for trusted registries in some form of the process.” Synthetic identities pose a particular challenge because they are created by blending real and fabricated data into a new entity. This means there is no direct victim to report fraudulent activity, and often no clear red flags for organizations at onboarding.   This is just one of the reasons why changes to the current KYC model have become paramount. “When I was in banking, I saw that KYC was treated as a onetime check and the KYC team would just look at static identity data,” Pitt said. “Once that matched, they would move on, and KYC wasn’t being done after that initial check. What we need is the idea of perpetual or continuous KYC, where we’re using automated tools to look at KYC or identity verification processes in the background.” The Three Levels In addition to ongoing customer checks, there must be protocols in place to continuously validate data. Data has become the lifeblood of an effective KYC process, and the potential for corruption through fraudulent or erroneous information makes stringent verification essential. “We typically look at trust from three levels,” Jones said. “The first one is the authoritative nature of the data, meaning does it come from a real-time primary source like a government record or an M&O with clear privacy policy guidance? This is essential. The second one is looking at transparency. Organizations need to see what data sources were checked, what attribute levels were matched, and what level they were matched.” “The third one is basic coverage,” he said. “From an identity verification perspective, we work in a global world. It’s not just a U.S.-based or UK-based solution, where data is prevalent. It’s looking to make sure that we are catering for all geographies and all demographics, and that isn’t easy.” One of the most challenging demographics to evaluate is the thin-file population, often composed of young adults or immigrants with limited or no credit history. Due to this reduced digital footprint, it can be difficult to verify their identities, yet this group now comprises roughly 76 million people in the U.S., or about a third of all adults. Another challenge in maintaining accurate data is that customer profiles are constantly changing as individuals open new accounts or update addresses. This fluidity makes it critical to implement mechanisms that can constantly check and cross-check information. “One of the things organizations often miss is there are two parts of identity verification,” Pitt said. “There’s the identity verification itself, is the information being presented that of a real person? That addresses things like synthetics, deepfakes, information that is not that of a real person.” “The other piece is identity proofing. Is that identity that’s being presented the actual identity of the person that’s presenting it?” she said. “We need to make sure we have both of those pieces and not just one.” Data Confirms Identity Evolving toward a more effective KYC model will require a layered identity verification approach. This model evaluates multiple factors, including known identity data, biometrics, behavioral and contextual signals, device interaction patterns, and shared threat intelligence. It is critical to take all these inputs so that no single data point is given undue weight. “Trusted data sits within the verification workflow as a foundational layer and asks the question, does this identity actually exist in the real world?” Jones said. “Capabilities such as document verification are extremely powerful. I’ve worked for some of the leading vendors in the world, and they asked the question as to whether the person presenting a document is real and matches the ID, whereas trusted data helps confirm that the identity itself exists and is consistent across multiple records.” “Biometrics confirms the person and data confirms the identity, and you need both,” he said. Alongside improved fraud detection, one of the biggest advantages of a layered verification approach is that it can strengthen security without increasing customer friction. For example, if an organization begins with document verification as the first step in the onboarding workflow, it can extract most of the data required for trusted validation from these documents. This includes information such as name, address, national ID, and date of birth—all of which can be captured using optical character recognition (OCR) technology. “When we talk about identity verification, we often talk about this from the fraud detection lens, but identity verification can help with other things,” Pitt said. “It does reduce customer friction for people that aren’t fraudsters, and it improves the customer experience because of that. It helps with compliance issues, and it also enables institutions to apply more risk-based verification to determine where and when additional data checks need to be invoked.” Defense in Depth The benefits of adopting a layered identity verification approach are spurring the metamorphosis of Know Your Customer, Know Your Business, and anti-money laundering processes. “I like to think of it as defense in depth, which is what cybersecurity professionals tend to call it,” Pitt said. “The idea that one fraud detection method might be thwarted by fraudsters and then there is another defense that might help. We’re going to start to see a shift more towards this perpetual or ongoing KYC. For any good-sized business, we need to be able to vet the customers and vet who is actually doing business with us.” As identity verification tools evolve, there will likely be a continued shift towards secure, portable digital identity schemes that enable online verification of consumers. For example, Australia’s ConnectID is a program which allows users to verify their identity with businesses or government agencies using information already verified by their financial institution. The objective is to simplify online verification and reduce unnecessary data sharing. Some of the primary use cases for such programs include age verification, which has become a pressing need in many online environments. This includes both safeguards to protect children and requirements to ensure adults meet age thresholds of 18 or 21, depending on jurisdiction. Alongside these developments, the overarching driver behind the need for stronger identity verification models is the rapid proliferation of sophisticated technologies. “We’re going to continue to see a shift to a data-first model, which from AI perspective is driving the element of trust to the forefront,” Jones said. “To do that, you need to be 100% reliant on direct real-time validation against trusted assets and you need to do that globally. Increased adoption is going to come by using data as a layer within orchestration workflows.”
• Separating Hype from Reality in Emerging Payment Trends 04.06.2026 22мин

  Despite near-constant industry buzz, the days when artificial intelligence agents dominate e-commerce—and consumers widely complete in-store purchases with a palm swipe—have not yet arrived. This is not to say they will never arrive, but if the rollout of prior tech trends like biometric authentication and embedded finance is any indication, there is still substantial runway before this financial future becomes reality. In a recent PaymentsJournal podcast, Javelin Strategy & Research’s Don Apgar, Director of Merchant Payments, and Christopher Miller, Lead Emerging Payments Analyst, cut through the noise surrounding recent payment innovations to assess the true progress of financial trends this year. What they found is that all these still face challenges. Most notably, an increasingly sophisticated retail landscape only amplifies the questions merchants and financial services firms must answer as they adopt new innovations. A Road Test for Agentic Commerce No discussion of trends would be complete without artificial intelligence, and debate about AI’s role in financial services has intensified as models have become increasingly capable. This has led many experts to project the imminent rise of agentic commerce, where AI agents shop and make purchases with limited user direction. Last year saw a wave of announcements around agentic AI, including new commerce platforms from Visa and Mastercard, as well as a Google-developed agentic protocol intended to serve as a framework for this new shift. Despite these unveilings, very little true agentic commerce materialized in practice. “The prediction was that this year we were going to see things live for the first time,”Miller said. “These products—the ideas, the concepts, and the workflows—were all going to get road tested for the first time. My suggestion was that things might not go as smoothly as all the announcements suggested they would, and, frankly, that turned out to be the case.” These kinds of false starts are not unusual with new technologies, where it takes time to test edge cases and build the underlying infrastructure. In agentic commerce, that infrastructure would need to cover everything from how consumers input an initial prompt to which AI agent is ultimately authorized to complete a purchase. While many of these components are now being addressed, significant unanswered questions remain about what the finished system will ultimately look like. “We’re getting to questions of who will use this and what will they use it for?” Apgar said. “How will we resolve trust issues? How do we resolve authority issues? How do we know that the action mirrors the intent, and the result mirrors the instruction? From a prediction perspective, as much of the buzz that we’ve seen about agentic commerce, 2026 is still going to pan out to be a building year.” Agentic Search Versus Commerce While agentic commerce may still be a work in progress, AI has already become firmly rooted in the consumer experience this year, especially as a tool for product discovery and comparison. “One of the things that AI does well is digest large amounts of data efficiently,” Apgar said. “If you are searching for a bookcase that’s less than 26 inches tall and less than 38 inches wide, I’m sure you’ve gone through web searches where you’re muddling through product pages and you have to find the details of the specifications and you have to drill down to find the measurements—only to back out and do it again on another web page. And there are how many bookcases?” AI can rapidly narrow search results, often producing answers and recommendations that consumers would not easily find through conventional search methods. While these tools are a game changer for consumers, they are also changing merchant business models. Instead of relying on search engine optimization to surface in Google results, merchants are now competing to be visible within AI-generated recommendations. At the same time, as AI increasingly becomes the buffer between merchants and customers, many retailers worry about declining website traffic. This shift could weaken brand identity and, in some cases, reduce businesses to little more than fulfillment engines operating behind AI interfaces. On the other hand, merchants who do surface prominently in AI-driven discovery stand to reach new audiences and bolster their brand visibility. These complexities are already beginning to impact merchants, and the sophistication is likely to deepen as agentic commerce evolves. “If we had this vision that agentic commerce was a single-provider solution that a consumer might use from end-to-end and somehow it would just layer over the existing framework of e-commerce, that’s proven to be false,” Miller said. “Just layering OpenAI on top of the internet as it exists is not going to work for anybody.” “In a sense, the internet—and more precisely the e-commerce version of the internet—will have to be reengineered for everybody’s benefit, in enabling things like software agents to do any of this work,” he said. “That’s where the building is going to be, it’s in that infrastructure layer.” The Path to Biometric Authentication A trend that appeared closer to mainstream adoption this year was biometric authentication at the point of sale. The benefits are well established, including stronger security and reduced friction at checkout. Unlike agentic commerce, biometric technologies have existed for years and have been piloted globally across a range of use cases. Given this, it might have been expected that this year would mark a clear inflection point in adoption. So far, however, progress has been limited to continued trials, including the launch of additional Biometric-Authentication-as-a-Service platforms that integrate biometrics into existing payments stacks. There has also been movement toward cross-experience, unified identity solutions. In many cases, when customers create a biometric profile with a company, their in-store purchase and loyalty data remain disconnected from their online profiles. Cross-experience identity solutions can connect these dots. Still, these platforms are far from widespread adoption, which appears to reflect the current state of the biometric authentication market this year. “I suggested that new products would come to market and we’d start to see some more launches, but I will say that it’s been a little bit light in terms of news on that front,” Miller said. “There is a path to market, but that doesn’t mean that any merchants have said, ‘We’re going to turn that on,’ and it doesn’t mean that the capability is ready to light up today.” “We might be a little slower than what I thought, but we continue to see development in the marketplace, the creating of the business plans and of the go-to markets so that these products and capabilities are going to be available to be chosen,” he said. “That wasn’t true two years ago in a widespread way, so that’s a significant advance, even as we continue to wait on its arrival.” The Boiling Embedded Finance Pot There are notable parallels between the gradual rollout of biometric authentication and the evolution of embedded payments and finance. One of key challenges in embedded finance, however, is that banks and fintechs are often operating at cross-purposes. Many fintechs have developed strong vertical Software-as-a-Service (SaaS) platforms that address a wide range of merchant needs, but these systems don’t always balance ease of use with financial services expertise. For example, some fintechs may present a seasonal merchant with an interest-bearing deposit offer during the offseason, when cash flow is tight. Conversely, they may extend credit during peak season, when liquidity is already strong. Financial institutions with deep experience in these products often struggle to integrate with newer merchant platforms. They may offer a SaaS-based point-of-sale system but lack the capability to fully leverage the data these platforms generate. “The pot is still boiling, with the fintechs struggling to figure out banking and the banks struggling to figure out data,” Apgar said. “Everybody thought based on how fast the market was moving and the many partnership announcements that this would be a lot further along, and that one or two companies would have come out on top and stick the flag in the top of the mountain that says, ‘We’re the embedded finance leader.’ But we’re not there yet.” The Difficulties of Implementation Although this year’s trends continue to face adoption challenges, the overall trajectory of these innovations is still largely on track, albeit at a slower pace than many anticipated. For financial services firms, this slower rollout may even be beneficial, providing additional time to build the infrastructure needed to adapt. However, it should not become a reason to delay initiatives in areas like biometrics and agentic commerce. Instead, merchants and financial institutions should continue experimenting with how these innovations can be integrated into their offerings, because—if this year is any indication—the path to adoption may be longer and more complex than expected. “Implementation is hard,” Miller said. “If I could write one prediction for 2027, it would be that implementation will continue to be hard no matter what new tool comes out.”
• Searching for Trust in Agentic Commerce 03.06.2026 25мин

  When an AI agent buys the wrong product—or makes a purchase no one explicitly approved—the fallout isn’t just a customer service issue. It’s a liability problem the payments ecosystem isn’t fully prepared to handle. In a PaymentsJournal Podcast, Jill Willard, CTO at IXOPAY, Rory Herriman, CTO and COO at Zip Co, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research, explored how liability may evolve as AI agents take on more responsibility in transactions. A Multidimensional Problem That question of liability quickly becomes a technical one: how do you even evaluate trust in an agent that isn’t human? The first challenge is determining how to calculate a trust score for an AI agent that lacks a traditional human behavioral footprint. Any viable framework must extend beyond identity to include intent—and how that intent translates into behavior. This isn’t just an engineering challenge; it’s also a cognitive one. Professionals in this space must rethink how they evaluate risk, developing new instincts that help them focus on the right signals. “We have certain models, frameworks, and even language that professionals use to describe the vectors of risk,” Miller said. “As we think about the replacement of human actors with agentic actors, we lack instinct. The mere notion blocking bot traffic as a way of defending against fraudulent behavior stops being useful. It becomes anticommercial.” Herriman added: “We have to approach it as a multidimensional problem. “It’s not just ‘Is this actor good?’ Even if the actor is good, there are other dimensions on top of the binary switches, a complexity that never disappears.” Assigning Liability in a New Context In the world of AI, merchants are steadily losing control over the checkout experience. Decision-making has shifted upstream. A consumer can now instruct agent not only to buy “blue shoes,” but to purchase them from a specific merchant. This shift brings a corresponding liability. If an agent buys light blue shoes instead of dark blue, who is at fault? Today, that burden often falls on the merchant. “We’ve seen some card brands, such as Amex, say that they’re going to accept liability for agentic transactions, which is an awesome development,” said Herriman. “But even if the liability fully shifts and the card brands take on more of that liability, there’s still a cost to shipping the wrong goods out. That can be the hard cost of the shipping fees or the operational cost to get the goods out the door, but it can also be at the cost of customer relationships.” Liability will become a central issue for issuers, providers, and merchants in the coming years. Existing frameworks address stolen cards or unauthorized use of payment credentials. But when a consumer is dissatisfied with what an agent selected on their behalf, responsibility becomes far less clear. A similar cycle emerged in early e-commerce. Merchants drove growth by offering generous return policies and absorbing the associated risk. Over time, return rates skyrocketed, leaving businesses with inventory that couldn’t be resold at full value. Eventually, that broad assumption of liability narrowed. Companies began analyzing customer behavior and limiting privileges for high return users—an early example of risk-based personalization. Responding to Complexity Payments have never had a single, unified approach, and agentic commerce is no exception. Agents will operate across multiple protocols and may express preferences for how transactions are executed—for example, specifying which rewards card to use. Orchestrators are working to simplify this complexity for merchants, who are primarily focused on selling products—not managing payments infrastructure. Meanwhile, agent developers are not necessarily optimizing for merchant interests. “Merchants have to figure out how to participate in an ecosystem where they aren’t necessarily the reason why the products have been developed in the first place,” said Miller. “It’s a common position for merchants to be in. It was the same thing with adding features like Apple Pay.” Enter the Unified Trust Layer Merchants will need partners to help them adapt to this shifting landscape. IXOPAY is working to involve merchants early in the Unified Trust Layer initiative, fostering a mindset that balances both merchant and consumer priorities. This approach helped drive Zip’s partnership with IXOPAY. “When we began talking about how agentic commerce and agentic payments were going to affect both of our businesses, it was fairly clear that those intersections were common,” said Herriman. “Throughout our network of 25,000-plus merchant partners, our focus is ensuring that in this new era of consumer payments, we’re able to show up with them with the same intentionality of protecting them and protecting fraud against them in the way that we do in the traditional shopping channels.” At its core is the concept of a pre-transaction authorization query, allowing merchants to evaluate the trust score of an agent before completing a sale. This moves decision-making beyond a simple binary of approve or decline. “With the trust score, you’ll be able to kind of get some insight into that agent within that particular transaction, and decide maybe to accept agentic transactions from this protocol, but not for this particular transaction,” said Willard. “It’s adding to that multidimensional layering that agentic commerce brings.” Ongoing Evolution The criteria for evaluating agents will evolve over time as new behavioral patterns—and new forms of fraud—emerge. Merchants and their technology partners will need to collaborate closely to build capabilities tailored to agentic commerce. With improved risk models, new technological tools, and the integration of agent trust scores into existing workflows, merchants can shift from a default “no” to more nuanced, conditional approvals. “It’s going to be a rocky road as the innovation continues to unfold and as a lot of these protocols come to life,” said Herriman. “But when we’re past those challenges, what does it really look for the merchant? A channel that opens up greater access to more customers through things like orchestrated shopping, which most merchants can’t participate in today.” These opportunities will require new safeguards, including frameworks like the Unified Trust Layer. One thing is clear: merchants that want to remain competitive won’t be able to ignore what’s coming. “They will end up needing to participate because it’s going to be such a big channel,” said Willard. “Regardless of if you open up to full agent bot shopping, you’re going to have to rethink your consumer experience on how they interact with you and your brand. It’s not a question of if they’re going to participate in agentic commerce. It’s by how much and when.”
• The Instant Payments Shift Is Testing the Limits of Legacy Banking 26.05.2026 12мин

  For decades, banks could afford to move slowly. Now, speed is table stakes. In a world of instant payments and real-time expectations, institutions built on legacy systems are being forced to confront a hard reality: modernizing is no longer optional. In a PaymentsJournal Podcast, George Malesky, Director of Partnership Development at Qualpay, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, discussed what legacy banks are up against as instant payments become the norm. For institutions whose technology stacks need an overhaul, the options may not be ideal, but at least they exist. Focusing on the Big Picture When a bank tries to do everything at once, it typically ends up doing very little well. The first step toward modernization is defining a clear focus. Banks need to identify operational efficiencies and determine which upgrades will create the most leverage and opportunity. This isn’t just about driving growth. Strengthening compliance and risk management systems is equally critical. While improvements in sales and customer experience can attract new business, foundational operational enhancements are what makes that growth sustainable. “You’re not going to totally disrupt your core, or completely overhaul your system,” said Malesky. “But you can make things like onboarding and payments and servicing better by making sure they have updated technology.” Getting Ready for Instant Payments On top of existing challenges, banks must now prepare for a world of faster payments. Neither regulators nor customers are willing to accept institutions that can’t keep pace. Speed alone isn’t the solution. Banks need the right technology and the underlying architecture to support it. Just as important is adopting a forward-looking mindset—one that anticipates future demands, especially when competing with more agile fintechs. “You have to make sure everything works together, that the APIs and the middleware all talk together well,” said Malesky. “Sometimes it’s more about thinking of a way to work around your core rather than replacing it or going through it.” Too often, banks overestimate the strategic value of owning their payment infrastructure while underestimating its cost. The burden extends beyond upfront investment to include complexity, ongoing maintenance, regulatory requirements, scheme updates, fraud management, and continuous innovation. What’s critical here is treating payments as a strategic capability—not necessarily a fully owned asset. In-house solutions can offer control and customization, but they come with significant trade-offs in cost and operational burden. Looking for a Partner Some banks, with sufficient capital and internal resources, may choose to modernize their payment systems independently. However, many are finding success by partnering with providers that bring both experience and modern platforms. These partnerships can accelerate transformation timelines. “Everyone knows the old adage that every journey begins with a single step,” said Malesky. “But when it comes to siloed systems and fragmented tools, maybe it’s a handful of steps to get there at the forefront. There’s not necessarily a single bullet or a single provider that can do absolutely anything and everything that a bank will need, but you want to reduce vendor clutter and some of the complexities by having single source solutions.” Breaking Down Silos Partnering can speed up modernization, but it doesn’t eliminate one of the industry’s most persistent challenges—siloed systems. Embedded solutions can reduce distractions and minimize errors, but they don’t always integrate smoothly with adjacent systems. Both legacy and modern platforms must communicate effectively to deliver real value. Siloed systems create friction across the organization. Customers may struggle to navigate disconnected services, while banks face inefficiencies such as duplicated data and redundant processes. The impact is far-reaching. “When a bank is not operating as one holistic system, it loses opportunities to cross sell,” said Riley. “You’re losing a line of sight on the true risk of a customer, whether there’s loans or deposits involved. They don’t necessarily have to work together, but when they do, it’s a much better experience for everyone, especially the operational people and of course the customer.” One clear example is onboarding. Fintechs can onboard customers in minutes, while traditional banks may take up to seven days—and at two to three times the cost for  merchant accounts. “It’s really a challenge if you’re going to be that slow,” said Malesky. “When we used to text in the early stages of flip phones, we had to open up our phone and press the number 2 three times to get the letter C. It was a slow, monotonous process. But in those days, we didn’t know any different. We didn’t know what was coming with iPhones.” Fintechs are effectively delivering the “smartphone experience” of financial services. Once customers become accustomed to that level of speed and convenience, it’s difficult to revert. If banks can’t meet those expectations, customers will look elsewhere. Where Are Banks Heading? Modernizing a legacy banking system involves many moving parts. It’s not enough to address current needs, banks must also align their upgrades with long-term strategic goals. “Unless you’re ready for the future, you will not get through it,” said Riley. “It’s not just ‘Let’s get to it on a 10-year plan.’ It’s where you’re looking to go, and how quickly will you get there.” Malesky added: “Think ahead to how you can make the customer experience that much better because that translates into more customers, and more usage for existing customers. And that’s the goal for most banks.”
• Embedded Payments Are Becoming Core to Vertical SaaS 20.05.2026 13мин

  Not long ago, a concrete company and a takeout restaurant could end up running their business on the exact same software. Systems built for everyone, in practice, worked perfectly for no-one—and bending them to fit the realities of a small business was often frustrating or simply impossible. Vertical software-as-a-service (SaaS) solutions emerged to solve this problem, quickly evolving from the exception to the norm. The reasons for this growth are largely self-evident: vertical SaaS enables rapid implementation with minimal customization. In many cases, merchants feel these platforms are built for their business rather than retrofitted to it. However, the operational benefits of SaaS are diminished if payments aren’t integrated into the solution. In a recent PaymentsJournal podcast, Brad Pinneke, Head of Enterprise Development at Worldpay, now Global Payments, and Don Apgar, Director of Merchant Payments at Javelin Strategy and Research, discussed how embedded payments have become a critical driver of vertical SaaS—a synergy that will only strengthen as new trends and technologies reshape the landscape. The Case for Embedded Payments One of the most notable aspects of the rise of vertical SaaS is that it has largely been market-driven. Adoption has accelerated as industries not typically known as early adopters—such as healthcare, construction, and financial services—have come on board, despite heavy compliance and consumer protection requirements. With the advantages of vertical SaaS now well established, these platforms will continue gaining traction and carving out new niches. “POS systems were so generic that everybody had to customize it, and most merchants were finding that that customization wasn’t possible because the platform didn’t support the features that they needed for their business,” Apgar said. “Now that these features are being identified, it’s created these micro-markets for POS platforms to be focused on the needs of specific business types, and payments are part and parcel with that.” Payments are a logical addition, given that vertical SaaS solutions increasingly encompass nearly every aspect of a small business. A pizzeria’s platform, for example, may manage everything from payroll to inventory. Yet few functions are as mission-critical as payments. This is why embedded payments and vertical software are increasingly in lockstep. By embedding payments directly into workflows, businesses can complete transactions at the exact moment a customer is ready to pay—whether when a service is completed or a product is purchased. “I’ll give you a great example from the last couple of years: field services,” Pinneke said. “In the past, the tech used to complete the job and then the office staff would send an invoice and the payment would arrive weeks later. Then, they have to reconcile that payment, take it to the bank, and cash flow was unpredictable.” “Fast forward to today, where embedded technology comes into play,” he said. “The job is marked complete, the payment is scheduled instantly, the receipt is automatically sent out, and the funds are settled predictably. You’re limiting the back-office intervention, which has huge impact to smaller businesses.” Automatic, Not Forensic One of the benefits of vertical SaaS solutions is the ability to deliver holistic business insights through a unified dashboard. Embedded payments extend this value far beyond checkout. “The embedded impact is that things like payouts and fees and balances are visible alongside operational metrics,” Pinneke said. “In the past, you had the system of record showing one thing and then you had a payments portal showing something else and the reconciliation between those was tough.” “That’s a big part of it today—it’s automatic, not forensic,” he said. “Forensic was such a big part of small business challenges; they just didn’t have time. Now, the reporting reflects reality, not just an estimate, and that’s critical for businesses today.” When implemented correctly, this seamless integration can improve cash flow while streamlining the customer experience. However, these gains depend on thoughtful placement within the platform. Payments should not exist as a separate or disjointed process; instead, sales, onboarding, and customer experience should reinforce a single, cohesive journey. Equally important is timing. Successful platforms introduce payments early in the customer lifecycle. Too often, organizations treat payments as an afterthought—only addressing them once users are trained and ready to deploy the solution. In short, platforms that succeed with embedded payments don’t position them as a value-add—they treat them as critical infrastructure that completes the workflow. “When POS evolved into vertical SaaS, it wasn’t uncommon for the merchant to say, ‘I’m going to shop for my software and now I’m going to shop for my payment solution,’” Apgar said. “Successful SaaS providers have figured out that it’s not a check-the-box optional feature. A lot of what’s driving the move toward embedded finance is that the vertical SaaS software is enabling a single source of truth database—starting with payments and eventually evolving into supplier payments and other functions that work off that same data set.” “It’s critical to the functionality of the system to drive off that single data set to have payments embedded in the SaaS solution,” he said. “The SaaS company has to embrace that and make that part of the go-to market strategy. It’s not a bolt-on or an add-on, it’s core to the function of the platform.” The Time Resource Merchants and platforms that embrace embedded payments as a core component of vertical SaaS will be better equipped not only for today’s challenges but also for a future shaped by artificial intelligence. “For the SMB that is the typical vertical SaaS user, AI is going to be a game changer,” Apgar said. “The most critical resource in the life of the business owner is time. With the centralized dataset within the vertical SaaS platform, the common option has been to create dashboards. So, we create marketing dashboards and payment dashboards and cash flow dashboards and say, ‘Here’s all the information that the business owner needs.’” “The bottom line is the business owner doesn’t have time to sit there and sift through all this,” he said. “That’s what AI does best, it manages large volumes of data to impute trends and make recommendations.” AI-driven decisioning is especially valuable at key points in financial workflows where human intervention can be slow and costly—such as determining whether funds should be released. Rather than relying on manual review, AI can sift and analyze vast datasets to flag suspicious or high-risk transactions, then approve, deny, or delay them accordingly. This helps financial institutions meet growing demands for real-time transactions while maintaining strong fraud protections. AI also plays a crucial role in payments orchestration, selecting the optimal payment rail based on factors like cost or efficiency. As new payment methods emerge, AI will become increasingly central in determining the best route for each transaction. From Reactive to Proactive Ultimately, AI is shifting organizations from reactive reporting to proactive insights. Historically, businesses often accessed key data weeks or months after the fact. Today, AI can process information in real-time, transforming areas such as predictive risk assessment and exception handling. These efficiency gains also create opportunities for cost reduction, including areas that directly impact merchants’ bottom lines. “AI feels like back when reliable internet became available, it’s such a driving force today,” Pinneke said. “The number one thing I get asked is ‘How do we handle chargebacks?’ If you look at AI, there is probably the greatest opportunity to let AI engines figure out the chargebacks in real time and deal with them.” “If you think about the entire process, it’s essentially broken,” he said. “People dispute something, it comes back, and the merchant and retailer has to go and collect data and show proof and all of that,” he said. “Imagine if AI tools did more of the upfront work. We would probably see a lot less chargebacks, and that turns into real dollars. That’s probably the number one place where AI is making a difference for everybody up and down the food chain.”
• Inside Banking’s $10 Billion Inflection Point 14.05.2026 23мин

  Crossing $10 billion in assets isn’t just a milestone for financial institutions—it’s a turning point. What looks like a measure of growth quickly becomes a fundamental shift in how a bank operates, earns revenue, and manages risk. However, this landmark also brings substantial regulatory and compliance obligations, including changes to debit card revenue streams, mandatory participation in annual stress tests, and enhanced infrastructure requirements. It’s no surprise, then, that banks approaching the $10 billion inflection point often face a new level of uncertainty as their business model begins to evolve. In a recent PaymentsJournal podcast, Ellen Davitt-Lalwani, Senior Director of Portfolio Advisory Services at Fiserv, and Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, addressed commonly asked questions about this transition and outlined the leadership, compliance, risk management, and card program strategies that can help ensure a smooth crossover. The Regulatory Uptick One of the most impactful aspects of the transition is the requirement to comply with debit interchange regulations under Regulation II, introduced through the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act. While these rules were passed to strengthen the U.S. financial services system following the 2008 financial crisis, the card-driven payments landscape means they also carry revenue implications for banks crossing the $10 billion threshold. “Cards are your customers’ primary physical contact with your brand,” Davitt-Lalwani said. “We need to remember that as Regulation II is put into place—as an institution moves from unregulated to regulated—their interchange can be cut by 40% or more and every transaction matters, for both debit and for credit. Interchange cuts also affect consumer and business debit transactions. For some clients, their interchange ranges from 30% to 50% of non-interest income today.” Indeed, the impact stems from the Regulation interchange cap: $0.21 per transaction, plus five basis points of the transaction amount, and an additional $0.01 for fraud prevention. This is significantly lower than what many midsized institutions currently earn, making it essential to accurately estimate the resulting interchange revenue gap, particularly on debit transactions. While this is one of the most consequential changes, it is far from the only compliance consideration. “One of the things that comes into play is Dodd-Frank stress testing, which puts a highlight on bank liquidity and, since you have become a large institution, ensures that you have the wherewithal to survive changes in the economy,” Riley said. “There are other regulations that also come into play that affect revenue, and there are higher compliance costs that come through the Volcker rule, which has to do with investments in private equity and financials in the background.” Preparing for What’s Ahead Given these new obligations, banks often have several key questions as they prepare to cross the $10 billion milestone. For example, institutions frequently ask whether they should proactively communicate with regulators and third-party providers about their trajectory. “That is certainly a ‘yes,’” Davitt-Lalwani said. “In terms of working with prudential regulators as well as third parties, having at least six months advance notice is a good idea. In terms of regulators, feel free to reach out to the Ombudsman’s office. It’s a good opportunity for your financial institution to establish a relationship with your regulator and it gets you off on the right foot.” “In terms of reaching out to third parties such as Fiserv, Visa, and Mastercard, there is typically an orchestration of operations and technology that needs to take place,” she said. “That six months advance notice gives everyone an opportunity to circle the wagons and put all of the right components in so that when you’re truly ready to step across that threshold, you’re doing it with all parties fully knowledgeable.” Another common question is whether additional asset thresholds trigger further regulatory requirements. The answer is yes. The $25 billion threshold introduces another layer of complexity, often compounded by the fact that it’s frequently reached through mergers or acquisitions. As banks near $10 billion in assets, some consider temporarily slowing growth until the necessary infrastructure is in place. This can be supported through deposit management partners such as StoneCastle, which can help move deposits off balance sheet until the institution is ready for the crossover. However, these partnerships must be established well in advance. Beyond balance sheet management, they also provide a buffer against “flights to safety,” when volatile market conditions drive sudden surges in deposits. “I’ve been through that $10 billion inflection point and one of the financial institutions that I was employed by experienced that flight to safety just as we were approaching the $10 billion mark, and it pushed us right up over the threshold,” Davitt-Lalwani said. “We are a nation that has a very dynamic socioeconomic market, so preparation is the better part of valor in this. I strongly recommend that financial institutions consider putting those types of tools into place.” A Regulator in Residence Preparation also requires a clear understanding of more complex reporting expectations, including enhanced audit, compliance, and risk reporting that often demands new data capabilities. In some cases, banks should also be prepared for the possibility of an on-site regulatory presence. “There could potentially be a regulator on-site all day every day with your associates—whether it’s in the cafeteria, walking through the parking lot, or in the elevator,” Davitt-Lalwani said. “They’re going to be able to pick up on conversations and to see and hear things that may not have occurred in prior situations. They’re important components as to how financial institutions need to be prepared and how they can work for success in the future.” These expanding obligations frequently require investment in both staff and technology. As teams grow—often in unanticipated ways—strong organizational alignment and clear communication becomes critical. Just as important is maintaining a customer-centric focus. As institutions scale, they can lose the personal touch that differentiates them. Structured feedback mechanisms, such as customer surveys, can help preserve that connection during the transition. “One of the best customer surveys I’ve ever had was to ask our customers if there was one thing they could change in the near term that would improve their relationship with us, what would that be?” Davitt-Lalwani said. “Your customers and members will tell you where you need to improve so they can willingly work with you and deepen their relationship.” “On the back end of it, make sure to communicate to your customers or your members that we’re listening to you; we’re hearing what you have to say, and this is how we’re responding to meet your needs,” she said. Balancing Growth and Risk Amid these changes, banks must continuously balance revenue generation with enterprise risk management. While the transition can feel complex, the ultimate goal is to position a successful institution for sustained growth. “You don’t end up at this threshold by accident,” Riley said. “You either got here through organic growth or through a merger. The focus is on the prep work, having everything in place because this is not a casual move and it needs planning that goes in front of it. Life will change when you crossover that barrier. The opportunities are certainly there and the risk is also there.” Given these considerations, establishing a comprehensive communication strategy ahead of the $10 billion threshold is essential—not just to explain new processes, but also to prevent internal silos or unintended organizational friction. “You want to make sure that everyone understands that higher water raises all boats,” Davitt-Lalwani said. “It’s important that we fortify the organization in all of the appropriate places Regulators, talk to your associates at the front-line level, at the back-office level, as well as executive and mid-management. (You want to make sure they) have an understanding as to how and why the organization is changing and what the anticipated needs will be.” “Communication is key, but it can be elusive, so having the board and the executive team devise a plan and putting in listening posts to make sure that the message is getting out there is a great thing to do and should not be overlooked as you embark upon this journey,” she said.
• The Hidden Cost of Fraud Disputes Is Hitting Banks Hard 13.05.2026 26мин

  Fraud disputes are one of the fastest ways for banks to lose customers—and one of the least prioritized parts of the business. Despite the high costs, many institutions still treat them as a back-office function rather than a decisive point in the customer relationship. Beyond immediate losses—such as chargebacks, write-offs, and investigation expenses—banks also lose revenue when an engaged customer no longer keeps their account top of wallet. In a PaymentsJournal Podcast, Steve Durney, Vice President of Partnerships and Alliances at Quavo, and Suzanne Sando, Fraud Analyst at Javelin Strategy & Research, discussed the hidden costs of fraud disputes. It’s a problem that will only intensify as AI and agentic commerce evolve. Customers Are Willing to Move On Banking industry recovery rates for fraud average around 64%, leaving more than a third of disputed dollars unrecovered. For most banks, disputes are an expensive process, with operating costs eroding already thin margins. Research suggests that if a fraud issue or dispute isn’t handled effectively, 60% to 70% of customers will move to another bank. Notably, the outcome doesn’t always have to favor the customer, as long as the process is managed transparently and resolved efficiently. Once customers feel they aren’t being treated fairly, it’s difficult to restore trust. Accounts may be quietly abandoned, and products go unused. Even without formally closing an account, customers often disengage entirely. “We’re seeing growing numbers of consumers who are willing to close an account and walk away when they have a bad experience with their account,” said Sando. “Setting everything back up with a whole new financial institution—like bill pay or getting all your accounts linked to whatever other financial accounts you were linked to—it’s a tremendous hassle. If you’re willing to go through all of that, that says a lot for how important security and customer service is throughout a process like this.” Modernizing the Dispute Process Several aspects of the dispute process need modernization to improve efficiency and recover lost value. Because dispute teams rarely receive priority budget allocation, banks often underinvest in technologies that could significantly improve performance. Organizations that ignore these inefficiencies and continue to deprioritize back-office enhancements only prolong the problem. Five years from now, they are likely to be facing the same challenges. “The inefficiency really comes into what historically would have been categorized as judgement—something where a human being has to give opinion on in order to route it properly,” said Durney. “Second is the document interpretation, for documents that are incoming from either a consumer or a merchant, or being transmitted from the bank to the merchant. That’s the lion’s share of the inefficiency.” Banks without standardized documentation and clear rules force teams to spend valuable time interpreting procedures instead of executing them. When deeper, manual investigations are required, staff should be freed from repetitive administrative tasks so they can focus on higher-value work. Fighting Against Constant Turnover High turnover within fraud teams is another persistent challenge, especially given the long ramp-up time required for investigators to become effective. “I asked a bank not long ago, ‘What’s the turnover rate in your department and how long does it take you to onboard somebody?’” said Durney. “They said the onboarding was about six to seven months before they were effective, and they had a turnover rate of roughly 25%. “If you’re turning over your staff every four years and it takes you six to nine months to have somebody be a top performer, that’s a radical impact on all these day-to-day manual tasks,” he said. “There has to be a way to get people up to speed faster, handling the cases in such a way that you can actually hold on to staff and you don’t have that turnover.” Involving experienced compliance and regulatory professionals in designing dispute process technology can help reduce risk and ensure systems are better equipped to handle complex scenarios. The Risks of Agentic Commerce While banks are still working to modernize dispute processes and stabilize fraud teams, the next wave of change is already emerging. Agentic commerce promises new opportunities, but also introduces significant fraud risks. When AI agents act on behalf of consumers, traditional fraud signals—such as behavioral biometrics, device intelligence, and IP address—become less reliable, making it harder to distinguish legitimate activity. Fraudsters will increasingly leverage agentic AI in ways that are difficult to predict. “Once people really figure out how to use the tools to be able to make the agents go off and do things, you’re going to get the gray area of people abusing the system,” said Durney. “The use cases that we see so far are using AI to navigate the system. Say: ‘I bank with Bank X, tell me how to navigate the disputes process,’ and it will generally give you a pretty good recipe as to how to get through it.” Banks are already anticipating how AI could go wrong. Those looking to stay ahead in fraud dispute management must prepare now. “HBO’s Silicon Valley has a perfect example of this,” Durney said. “They told the AI to go buy them burgers for lunch, and then a pallet of frozen hamburgers showed up. Did the AI do what it was supposed to do? More importantly, what is a consumer going to do? A consumer is going to find the easiest path to go. I need somebody to be my advocate to fix this problem because I didn’t want a pallet of frozen hamburgers.”
• Crypto Payments Are Ready for the Mainstream 12.05.2026 24мин

  Cross-border payments have long been defined by delays, fees, and a maze of intermediary banks. Stablecoins are changing that—offering a faster, simpler alternative that cuts out the middleman entirely. This use case is one of the key drivers behind the stablecoin market’s rapid growth in recent years. However, stablecoins—and digital assets more broadly—have the potential to reshape virtually every payment scenario, from enterprise transactions to retail purchases. In many cases, the infrastructure to support these applications is already in place, largely due to the rapid proliferation of crypto payment gateways. While early iterations did little more than add a ‘Pay with Crypto’ button at checkout, these crypto gateways have quickly evolved into full-scale payments orchestration platforms. In a recent PaymentsJournal podcast, Kate Lifshits, CEO of NOWPayments, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, discussed the dynamic powers of stablecoins, the remaining regulatory and infrastructure challenges, and how the final barriers to mainstream adoption are steadily falling. Solving Pain Points Although they aren’t issued by the U.S. Federal Reserve, leading stablecoins have effectively become a digital representation of the dollar. This makes them a powerful alternative to the existing rails. “There are some pain points that most merchants that use traditional rails face,” Lifshits said. “Those are speed, availability, costs, and the inability of the traditional rails to meet the rising demand for optimization and innovation. That’s exactly where stablecoins come in because if we’re talking about speed, we are talking about several seconds instead of several days. If we’re talking about costs, we’re talking about several cents or a dollar instead of a lot of dollars.” Beyond efficiency gains, the modern infrastructure supporting stablecoins can serve as a springboard for innovation. From a liquidity perspective, near-real-time settlement enhances the time value of money, enabling organizations and consumers to deploy funds more effectively. Together, these advantages make stablecoins a compelling option across a wide range of use cases. “In the way that business-to-business payments are being looked at, it is just having another option,” Wester said. “For the longest time there were no options in how you paid your bills, or the options you had were limited, expensive, and slow. It’s just having a new rail that has cheaper, faster, and better settlement time and removes some of the intermediaries who are taking a toll to move things along. And there are also friction points in having all of those intermediaries.” “We’re creating a whole new option that didn’t exist before, especially from a B2B standpoint,” he said. “Even remittances—when you’re talking about consumers paying each other across borders—what you’re seeing now is a new option that is cheaper, faster, better, and begins to drive down costs everywhere.” The Added Bonus of Crypto For all the progress in crypto payments, onboarding remains a sticking point. Many merchants are still wary of the perceived complexity of integration, while others lack a clear starting point. “It’s up to the crypto payment gateways to give them the easiest onboarding flow ever,” Lifshits said. “That would mean that when they start using the payment gateway, they see all the traditional tools they are used to, but with the added bonus of crypto.” The goal is to make crypto payment gateways as intuitive and seamless as the tools merchants already use, such as those offered by Stripe or PayPal. Gateways must also address longstanding concerns around crypto acceptance, namely, how digital assets are managed after receipt and the volatility of cryptocurrencies like bitcoin and Ethereum. This makes it critical for merchants to have the ability to convert crypto to fiat at any point, as well as the flexibility to choose how actively they manage digital assets. This optionality helps address another concern: crypto transactions can be unforgiving. For example, sending funds to the wrong wallet can have irreversible consequences. While the infrastructure to mitigate these risks has improved greatly, silos still exist. Many organizations continue to rely on separate payment stacks for traditional rails and digital assets. “We’re seeing development along both of those,” Wester said. “There are some nuances to payments the traditional way that we haven’t built into stablecoins yet. But what’s surprising to me is how quickly we are identifying those nuances, how quickly we are beginning to see the traditional rails and the legacy providers look at stablecoins and say, ‘We can do that, we can integrate that, let’s bring that into more traditional bank and financial institution payment rails.’” Advancing the Crypto Mission Rising institutional interest is driving new regulatory measures worldwide. These landmark frameworks represent a turning point for an industry rooted in decentralization and long viewed with skepticism by global financial leaders. “Regulation always lags innovation. You have an innovation, you don’t know what that innovation is going to entail, so regulators don’t exactly know what they’re supposed to be regulating,” Wester said. “Now that we’re seeing that it does provide cheaper rails, faster clearing, and all sorts of innovation, traditional financial services began to say to regulators: ‘We want to be able to do this,’ and regulators finally started coming around and saying, ‘Let’s see what we can do.’” Recent efforts include Europe’s Markets in Crypto-Assets (MiCA) framework and the GENIUS Act in the U.S.—developments that would have seemed implausible just a few years ago. Yet digital assets are proving they can be as compliant, safe, and secure as traditional financial instruments. They can also align with existing Know Your Customer (KYC), Know Your Business (KYC), and anti-money laundering standards. In some respects, blockchain-based transactions offer even greater transparency than traditional systems. As these long-awaited regulations take effect, it is critical for digital asset firms to embrace and adhere to them. “To further the mission of crypto, a payment gateway should be licensed, they should understand each country’s rules, and help businesses to operate with crypto on a regulated and licensed and compliant basis,” Lifshits said. “That would mean not just licenses, but also procedures as KYC and KYB. But here we see an interesting challenge—the KYC and KYB procedures should be out there without breaking the UX.” “That’s where the conversion usually starts to fail, when businesses are trying to be compliant and safe, but then the UX suffers for it,” she said. “It’s up to the payment gateway to comply with the rules, but to still to be able to provide a better experience than the traditional payment gateway that only works with fiat.” The Future Is Now Delivering a strong user experience while maintaining compliance is a difficult balance, but a crucial one. Many users remain hesitant to engage with crypto payments, making trust a decisive factor. “You can integrate this into consumer payments, remittances, commercial payments—whatever application it is,” Wester said. “It’s all a part of simplifying that user experience and then educating people on just how simple it is.” Ultimately, ongoing improvements in infrastructure, compliance, and education are all aimed at building that trust—the foundation for mainstream adoption of crypto payments. “If crypto itself is getting more trust, the same should go for crypto payment gateways,” Lifshits said. “And it’s not just education. There should also be a bit of marketing here because crypto is already here.” “It’s not just something in the future, it’s here. And you should do it now because while you’re waiting, others are already reaping the benefits,” she said.
• The Passkey You Can’t Steal: Why Hardware Beats Software for High-Stakes Authentication  07.05.2026 18мин

  Today is World Passkey Day. And while the industry celebrates the shift away from passwords, the more important question is what kind of passkey replaces them. Many organizations recognize that passwords are on the way out, with passkeys emerging as a replacement. What’s less widely understood is that the two main types of passkeys—synced and hardware-bound—serve very different use cases and carry distinct risk profiles. While both improve security and usability compared to passwords, one offers much greater protection.  In a Payments Journal Podcast, Adam Lowe, Chief Product and Innovation Officer at CompoSecure and Arculus, and Tracy Goldberg, Director of Cybersecurity at Javelin Strategy & Research, broke down how these approaches differ in practice. They explored how keys behave when stored in software versus hardware, and why those distinctions are especially important in payment authentication. What Is a Passkey?  A passkey is a cryptographic credential that allows a user to authenticate their identity with an application or service without a password. Many consumers encounter passkeys through mobile devices or platforms like Microsoft, often using biometrics such as fingerprints or facial recognition to log in. In most of these cases, the underlying credentials are software-based and synced through the cloud. This approach is very convenient: a single passkey can work seamlessly across multiple devices. However, that convenience introduces risk. If a user’s cloud account is breached, the bad actor may gain access to synced credentials, creating a significant security concern. Synced passkeys also face additional challenges. For example, while modern implementations are designed to resist replay attacks, improperly implemented systems or surrounding infrastructure can still be vulnerable if intercepted authentication data is reused to trick a system into granting access. “The more we have out there that’s living in the cloud, it’s just more readily accessible to cybercriminals,” said Goldberg. “The more that we can do in a physical environment—in addition to what we’re doing in a digital space—just enhances the security.” As Goldberg noted, hardware-bound passkeys are generated, stored, and managed on a local device, like a smart card or USB. These are widely used in high-security environments, including U.S. government and intelligence settings, and are generally considered best-in-class for strong authentication. “Software passkeys are great for that first layer, but we really need that depth of defense,” said Lowe. “Adding hardware local passkeys provides that next layer of defense for users.” A common misstep that organizations make is adopting hardware passkeys without fully modernizing their underlying systems. Often, this is done to avoid disrupting user workflows. While hardware passkeys can add a strong layer of protection, their benefits are limited if they are simply layered on top of legacy infrastructure rather than integrated into a modern authentication architecture. “When you sign, you’re getting a digital signature from the key, but you’re also attesting,” said Lowe. “There’s a certificate on hardware that proves it’s a valid hardware signer. While that food chain lives in the cloud, it can be manipulated. So another value to the hardware is not only am I signing, I am signing from a valid piece of hardware in a very straightforward way.” Non-Portability Is the Key  With hardware-bound passkeys, credentials are generated and stored within a secure element on the device. A secure element is a specialized chip designed to create and protect cryptographic keys—similar to those used in passports or payment cards. The defining characteristic here is non-portability. The private key never leaves the device. This is analogous to keeping a physical house key in your pocket: access requires possession. Because the key can’t be exported, duplicated, or remotely accessed, the attack surface is dramatically reduced. “We’re not saying that software passkeys go away,” said Goldberg. “It’s just an additional layer, a step-up authentication. It’s going to take a little bit more friction to authenticate and verify certain types of transactions or even certain types of individuals.” Read Privileges vs. Write Privileges  So when are software passkeys good enough, and when is hardware-backed authentication necessary? One useful way to frame the distinction is through read versus write privileges. Read privileges—access to view data—generally carry lower risk, since no changes can be made. In these scenarios, software-based passkeys may provide an acceptable balance of security and convenience. Write privileges, on the other hand, allow users to take actions that alter systems or move value, such as initiating payments. These higher-risk operations are where hardware-backed authentication becomes far more important. “That’s where we typically see that software to hardware migration, for stepping up an event,” Lowe said. “A very typical example would be sending a wire, sending any reasonable amount of money. Any time you get a risk flag, you can have the user tap into a step-up event.” The Tipping Point  The shift to hardware-bound passkeys could have occurred years ago, but widespread adoption likely depends on a tipping point—one that convinces organizations the added security justifies the change. “That tipping point is going to be a combination of increased cybersecurity risk, such as network infiltration that leads to data breaches,” said Goldberg. “It’s going to be upticks in fraud and increased risk to identity.” Many experts expect that payment flows, in particular, will increasingly require hardware-based authentication, given the high value and sensitivity involved. “If you do hardware-based authentication on a payment card, it shows possession of the physical card, which also answers so many fraud questions,” Lowe said. “We’ll get to the tipping point where consumers are concerned about their identities being compromised, and governments have more concern about verifying the authenticity of individuals, agents, and companies,” he said. “The whole notion of getting away from software-based authentication to having this additional layer of hardware will just become second nature.”
• Tips on a Prepaid Card: A Practical Solution with Broad Industry Impacts 29.04.2026 18мин

  When events like the NCAA Final Four come to town, they bring an influx of short-term workers who keep everything running—but often for just four or five days. Despite the brief duration of this work, many organizations still rely on traditional payroll systems to compensate them, creating unnecessary friction where speed and simplicity matter most. In industries that have relied heavily on cash tipping, such as hospitality, prepaid cards can be just as game changing. Instead of asking for a valet driver’s Venmo, a diner could scan a QR code and send a tip directly to the driver’s prepaid account. While event staffing and tipping are two clear examples, the potential extends much further. In a recent PaymentsJournal podcast, Ben Osmond, SVP of Treasury and Payment Solutions at U.S. Bank, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, explored the impact of prepaid solutions across sectors such as the gig economy and contract work. As cash and checks continue to decline, prepaid products can reshape the work experience for contract and seasonal workers, while also delivering benefits for employers. Filling the Tip Card As tip jars have gone increasingly cashless, restaurants have sought more efficient ways to distribute tips digitally. “What they are doing is using prepaid programs to provide tips at the end of shift,” Osmond said. “There’s some interconnectivity with the point-of-sale systems where we’re able to calculate the tips that a server is going to receive so that they can have those loaded onto a prepaid card at end of shift. Often, they will have them on their card and in their account before they jump in their car or jump on the bus to head home.” This model is often well received, in part due to consumers’ familiarity with gift cards and the stored-value accounts like those offered by Starbucks or Target. That said, some workers may still hesitate to accept tips through what they perceive as a gift card format. “Sometimes people don’t understand that you still get a regular paycheck maybe from your hourly work, and that a card that you get for your tip outs is a payroll card,” Hirschfield said. “Some of that is just the messaging and the idea around it, where they don’t think of it as payroll but as their tip card, that’s what it’s there for and that’s the intent.” “It’s a payment option; it doesn’t mean it’s the one thing they will get,” he said. “When you go home at the end of the day, you’ve got that tip money in your hands in the same way you would have in a cash environment. These products support the whole idea that there’s multiple ways to pay people, just like they’re always have been. It used to be you would get your check for your hourly work and your cash for your tip outs. Now, we’re moving to a digital environment for that.” Winning or Losing Talent Beyond tipping, digital prepaid cards can dramatically improve the work experience for contract and seasonal workers across industries. “Instant issuance changes the game when you think about those contractors, those seasonal workers and short-term employees whose entire employment experience might come down to five days of working at an event,” Hirschfield said. “When they finish on the day it closes, pay them out and their entire experience is complete. They’ve worked their hours; they’ve received their payment, and everyone has a clean break.” This streamlined approach creates a win-win: payers benefit from simplified coordination, while workers receive fast, secure, and flexible compensation. As short-cycle payments become more common—whether for summer jobs, event staffing, or project-based work—prepaid cards are well positioned to meet this important need. “More employers are starting to realize the value because today’s workforce is mixed,” Osmond said. “There are gig employees, contractors, and temps, and a lot of the legacy payroll systems struggle with high turnover and rapid onboarding of employees.  Ultimately, a pay experience can win or lose talent in a tight labor market. It’s very important that employees are being paid the way that they want to be paid.” Real-Time Earnings Access Just as important as how workers are paid is when they are paid. In a digital payments landscape, where consumers can receive near real-time transfers via apps like Zelle, the answer is increasingly immediate. “One of the most relevant trends today is earned wage access, the ability for an employee to receive wages for hours that they have already worked but have not yet received a paycheck for,” Osmond said. “With that Friday or every other Friday payday, they’re able to access these funds early and request a portion of their wages which can be sent to them electronically onto a prepaid card, plastic or digital.” Regardless of how payments are delivered, workers expect digital access to their financial information. This makes it critical to offer a robust app that provides full visibility into balances, transactions, and spending. This is especially important for contract and short-term workers, many of whom juggle multiple jobs and remain constrained by traditional pay cycles. “Having these options where you can get paid either with earned wage access on an early basis or a couple days early, those are critically important to the people receiving that money—especially when they may need to spend that money as soon as they earn it to fit their lifestyle.” Hirschfield said. “Also, you get people who are potentially underbanked and unbanked, and this can also fill that gap.” From the Employer’s Perspective While the benefits for workers are substantial, employers also stand to gain. Paying via prepaid can reduce onboarding time and administrative costs, enabling workers to get started more quickly. “It can cut costs around eliminating checks or email reissuing of checks, things of that nature,” Osmond said. “It can reduce fraud. That’s something that often doesn’t get talked about from an employer’s perspective, but there is fraud on paychecks. They’re also having less calls and less concerns into their HR or their payroll department with questions about their checks.” “You can lower the cost of ownership scale of all of these things,” he said. “We work with a lot of quick-service restaurants that have many different locations that are using our prepaid products. By having one product and one disbursement method, they’re able to be much more efficient than they would by delivering checks to each different location.” Immediate payouts can also play a valuable role during employee separations. Whether voluntary or involuntary, issuing final wages via prepaid card can help defuse what is often a sensitive and time-critical situation. And these scenarios are only part of the broader opportunity for prepaid solutions within the full-time workforce. “You look at other things where it might be an off-cycle payment, where it could be a bonus or sales incentive program,” Hirschfield said. “These things are done off cycle; they’re instantly done. You hit an incentive bonus on sales, you’re paid instantly, and you feel rewarded. These are all examples that play into why having programs like this help.” A Frontline Experience Taken together, these developments position prepaid cards as a valuable part of modern work experience—and signal the potential for disruption within the broader payroll space. “As we think about this as a whole, payroll and wages aren’t just a back-office function anymore, it’s a frontline experience,” Osmond said. “Payroll cards and wage cards have moved beyond check replacement to become a digital infrastructure for the workforce that today is mobile, it’s mixed, and it’s often outside of traditional banking.” “The next standard is simple, it’s a quick onboarding process,’ he said. “We need to pay people fast, we need to pay them consistently and we need to do it with controls in place that employers can stand behind. What these products do, it helps make a real bank-issued program that can support earned wage access as well as tip functions—without changing the payroll cycle as a whole for the employers.”
• As Fraud and Agentic Risks Mount, Data Provides Continuity 23.04.2026 31мин

  Not long ago, fraud teams could keep pace by reviewing incidents one by one. That era is ending. Armed with artificial intelligence and cloud-scale infrastructure, today’s cybercriminals operate faster, more broadly, and with far greater sophistication than ever before. The rise of agentic commerce will only intensify these challenges, in part because it upends a longstanding assumption in fraud prevention: that bot traffic is inherently suspicious. In a world where legitimate transactions may be initiated by AI agents, that distinction becomes far less clear. In a recent PaymentsJournal podcast, AtData’s Diarmuid Thoma, Head of Fraud and Data Strategy, and Brandt Hoffman, Sales Director, Fraud Services, along with Jennifer Pitt, Senior Fraud Management Analyst at Javelin Strategy & Research, discussed how these shifts are dramatically impacting payments risk. At the center of this transformation is a simple but growing imperative—organizations must know, with confidence, who (or what) is on the other end of every transaction. Achieving this now requires systems capable of analyzing and contextualizing vast, dynamic data streams in real time. The Outputs of Scalability Historically, many fraud attacks were treated as isolated events, leading financial institutions to adopt a reactive, situational approach. However, there are often patterns that emerge when these incidents are viewed collectively. Recognizing and operationalizing those patterns is critical. “From a law enforcement perspective, I remember a mail theft case that I investigated,” Pitt said. “We conducted a search warrant on the suspect’s home and found bags of open and unopened mail. We also found stacks of paper that contained full personally identifiable information—name, date of birth, Social Security number, next of kin, last known addresses—you name it, he had it.” “We searched his phone and his computer, and we were able to see that he was connected with several other suspects that we were already investigating,” she said. “What we uncovered was this hierarchical organized crime ring where there ended up being more sophisticated identity theft and other crimes. If we were just looking at one of those players or incidents, we wouldn’t have seen this whole organized crime ring.” While traditional vectors like mail fraud persist, the digital landscape has allowed bad actors to expand their reach exponentially. Technologies such as AI and cloud computing have supercharged criminal capabilities faster than most organizations can evolve their defenses. Beyond just deploying generative AI to create more convincing impostor sites and deepfakes, bad actors can now deploy AI agents to autonomously carry out widescale fraud campaigns. For example, agentic AI has been used in a technique where email addresses are rapidly and sequentially created for use in fraudulent activities. “We see thousands and thousands of them every day, where we see sequential types of emails created and they’re not necessarily in one client,’” Thoma said. “Somebody’s using an email over here to create a bank account and going and buying a pair of sneakers over there.” “Individually, it looks fine; there’s nothing wrong there,” he said. “At a platform level, we see the cumulative effect. It’s a simplistic example, but that type of behavior is a direct output of the scalability of fraud.” Distinguishing Malicious Automation Given agentic AI’s potential to amplify fraud across every channel, the emergence of agentic commerce presents unique challenges for fraud prevention teams. Many of the open questions around agentic transactions center on authorization. In the conventional e-commerce model, the shopper selects items, completes verification, and explicitly authorizes the purchase. When an AI agent acts as the consumer’s proxy, however, new gray areas emerge. “What happens in a chargeback scenario?” Thoma said. “The industry hasn’t got all the answers on that. It’ll slowly emerge, but one of the things that won’t change is history. It’s still you buying it. Especially for physical goods, it’s going to your physical location, it’s going to your name, and it’s probably using your e-mail address to confirm all the details. There’s still a lot of information, even in the agentic world, that’s going to be coming through.” This means that one of the most important considerations for fraud prevention will be the user’s history. Fortunately, this data is already present for many consumers. For example, the organization can confirm the age of an email address, whether it has been actively used, and if there are any red flags associated with it. This historical data becomes a critical point of continuity as organizations design fraud strategies for agentic commerce. “It was always, ‘Let’s look at the negative aspects of what this transaction could present,’” Hoffman said. “Now, we have to be cognizant to bring in those positive signals. What are the good signals that we can lean on? What allows us to interpret or infer more quickly? How do we start to identify what it means to be a positive bot, or to be a good transaction along the line?” A Timeline Event To act on these signals effectively, teams must start from an accurate baseline. A core lesson from AI is that models are only as strong as the data that feeds them. Just as importantly, that data must remain current, especially as consumers’ digital footprints continue to expand. “Many still look at data like it’s a credit report, where it’s a static thing that you see in a piece of paper and that’s it,” Thoma said. “It’s not. It’s a timeline event. If you think about when you were 20 to now, you’ve had different addresses, you’ve had different IPs and different devices. Your name may have changed for different reasons, and your email probably changed one or two times.” “Your profile naturally evolves, so the importance of the data quality and the skill in the overlaying models is to know when that change is abnormal versus normal,” he said. A practical way to evaluate changes in a user profile is through percentage-based shifts. Significant or rapid deviations across key attributes may indicate potential account compromise. Similarly, the repeated use of a single element across multiple account creation attempts can signal synthetic identity activity, where bad actors combine real and fabricated information. “We commonly see that, and its behavior that is distinctly different from somebody who’s just moved addresses,” Thoma said. “Yes, they’ve moved addresses, but a lot of the time when people move, they only move a couple of blocks down. There’s continuity in that profile, where we can still say that even though the profile has changed, it’s still fine.” “That’s a broad example of how important it is to have that data quality,” he said. “Because if you don’t have fresh data to reference, the timeline to reference back further, you can’t say, ‘This is normal behavior for them or not.’ That’s how important it is.” Data for the Whole Organization The growing emphasis on identity verification is driving a widescale shift in how financial institutions approach fraud prevention. Yet opportunities remain to break down data siloes and improve visibility across systems. “We are seeing some evolution in the ability for payments teams and fraud teams to come together quicker,” Hoffman said. “Payments teams are very focused on the transaction and what it means to bring that revenue in. There still is some hesitation for the fraud teams and the payments teams to merge together.” “In the most advanced organizations that I work with, those two functions are working hand-in-hand,” he said. “They know exactly what’s going on from a payments perspective and how that affects the flow of fraud.” The pace and complexity of the threat landscape demand more sophisticated infrastructure. Modern fraud prevention solutions rely on graph-based methods to map relationships between entities—sometimes referred to as fraud topology or halos. These topology-aware systems can enhance detection accuracy while reducing costly false positives. They also enable organizations to apply the right level of friction within the customer journey, including step-up authentication when warranted. While designed for fraud prevention, the benefits of these capabilities often extend well beyond risk teams, strengthening decision-making and operational efficiency across the entire organization. “The data is customer data; it has huge amounts of value,” Thoma said. “You’re seeing their geolocation, behavior, age demographics—all that stuff is extremely important for the business, not just for the fraud team. Everybody thinks that’s a lot of money for fraud prevention, but it becomes very cheap because you’re splitting that into multiple budgets.” “The marketing team can use it for targeted products, and you can increase conversions,” he said. “It doesn’t have to be fraud data, it’s company data for all divisions of that business to use.”
• What Would it Take for Stablecoins to Replace Wire Transfers in B2B Payments? 21.04.2026 21мин

  International wires have long been the default for B2B payments—an entrenched system that works, but few would describe as optimal, given multi-day settlement timelines and high fees. But as stablecoins gain traction in cross-border transactions, businesses are starting to ask a more fundamental question: Can we replace wires altogether? In a PaymentsJournal Podcast, Avinash Chidambaram, Founder and CEO of Cybrid, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed what would need to happen for stablecoins to become the default mechanism for B2B payments. What’s exciting as well is the possibility of even more use cases across payments, treasury, and remittance. “There are all sorts of things you can do better that you don’t consider to be a problem,” Wester said. “But maybe with new technology, we can do things that you didn’t even know were possible.” Structural Inefficiency Wires work well enough—they move money from sender to recipient, which meets the core need. What most enterprises don’t see, though, is the complex web of systems and intermediaries behind these transactions; they simply build their processes around bank-based payments. Over time, layers of intermediaries have made these systems deeply entrenched and difficult to replace. In the past, this made sense. Moving money across borders and oceans was a treacherous game, and paying a little extra for trust and security was a value-add rather than a painful cost. Now, however, times (and money movement) have changed. Organizations have access to tools that enable simpler, more streamlined alternatives with built-in trust. “The inefficiency isn’t just technological, it’s structural,” said Chidambaram. “Whether it’s correspondent banks, clearing houses, processors, [or] compliance, these experiences that are happening in the background between banks cost both complexity and time, and are hugely inefficient.” Looking for Improvement in B2B Alongside new technology came new expectations of transparency; companies want to track their payment from the second it leaves their account to the moment it lands in a recipient account. However, this is simply not possible with wire transfers. Stablecoins, on the other hand, offer complete traceability—and enterprises are taking note. They can verify, often in near real time, that funds have been received. This visibility is driving growing interest as businesses see clear operational benefits. “Most enterprises are focused on their core business and then they say, ‘OK, well, can I improve some of my operations and finance as a separate thing?’” said Chidambaram. “Now a customer can go into our platform and say I want to make a payment to this invoice and upload that invoice. We can automatically pull the funds from a customer’s account to fund the payment transaction, convert that to stablecoins automatically and then send stablecoin to the recipient’s wallet.” “That can improve B2B payments from two contexts,” he continued. “First, it’s just faster. Secondly, you can see that it’s settled—that [your recipient] actually received the funds.” Improving the User Experience For the longest time, a major barrier to broader digital asset adoption, including stablecoins,  has been poor user experience—complex interfaces and high stakes for errors. Firms like Cybrid are beginning to address these challenges across retail, commercial, and enterprise payments. The experience now goes beyond accessing a wallet to include greater visibility into transaction status and fees. The secret sauce is in programmability. Stablecoins by nature can be programmed—a payments team member can set up rules or triggers, which then guide how payments operate. For instance, payment terms. For instance, if you have to pay a supplier every month, you can create a programmable rule that ensures money lands on time, avoiding late fees or penalties and ensuring business continuity. But the use cases go beyond pre-determined rules and can become dynamic as well.“We’re starting to see people adopting ERP tools that have intelligence built into them,” said Chidambaram, “Where they can say, ‘Hey, your inventory is running low. Or you need to make these payments. Here are all the payables that you have.’ And over time, we’re finding that people are actually wanting to wait as late as possible to make those payments.” Keeping Existing Workflows Accounts payables and receivable teams already operate within established workflows in fiat currencies like the US dollar or Euro—for payroll, invoicing, and more—and are unlikely to overhaul them entirely. The good news, though, is that stablecoins operate in the background. When you make a payment, the recipient receives their local currency automatically (or stablecoins if they choose, but it’s not required). All the while, the business sending those payments benefits from speed, cost efficiency, and transparency. “You’re going to have an organization that says: ‘This is how I do payroll for my local employees, but I need to do this other thing for my contractors overseas and this other thing for my suppliers,’” said Chidambaram. “Some of them might have taken only wires then, but are now accepting stablecoins. They have the ability to pick which rail makes the most sense to solve the problem.” These benefits are especially relevant given the growing complexity of payroll, including irregular schedules and cross-border payments. Stablecoins could play a key role here. For example, enabling early wage access models that allow workers or suppliers to receive funds ahead of traditional pay cycles. “You get paid every two weeks because, in our brains, that’s how you get paid,” said Wester. “That goes back to direct deposit, which goes back to you had to have a check, and that goes back to all sorts of things that go into the processes. Same thing with AR/AP and so many of our payment processes at the corporate level. Now we can rethink a lot of those things.” Something Better For the foreseeable future, stablecoins will coexist with traditional payment rails. Both are necessary to support the trillions of dollars moving through global systems today. But as enterprises, suppliers, and payers grow more comfortable, a larger share of that volume is likely to shift toward stablecoins. “Many people think digital assets and stablecoins are a solution in search of a problem,” Wester said. “I’ll say, well, you know, what you’re doing now is slow, costly, and inefficient, with layers that you can’t see. You don’t think of this as a problem, but maybe that’s because you didn’t know there was anything better.” A key remaining hurdle is integration. Stablecoin payments are not yet embedded in most enterprise software platforms, where traditional methods like wires are still the default. But as vendors evolve and enable easier integration, stablecoins will become more accessible—unlocking even broader use cases. “Banks, PSPS, enterprises, large and small, every one of them have been thinking about stablecoins,” said Chidambaram. “How do I go in my take advantage of this? What are the capabilities I need? Then that starts to unlock people’s minds: What else can I solve with this new payment rail?”
• Instant, Irrevocable Payments Demand a Fraud Prevention Reboot 13.04.2026 18мин

  When a shopper is tricked into making a fraudulent purchase, they expect recourse from their financial services provider. These guardrails are one of the reasons credit cards have become predominant in the U.S.—not only can consumers dispute charges after the fact, but many issuers proactively alert users when suspicious activity occurs. Similar protections exist for ACH payments, but they are largely a function of the lag between payment initiation and settlement. With real-time payments, such as those facilitated by FedNow and the RTP network, this buffer disappears. As both systems gain traction, particularly in B2B use cases, fraud prevention strategies must evolve to address payments that are instant and irreversible. In a recent PaymentsJournal podcast, Darren Beyer, Chief Product Officer at Qolo, and Suzanne Sando, Lead Fraud Management Analyst at Javelin Strategy & Research, discussed how the convergence of faster payments and increasingly sophisticated fraud is fueling a full-scale redesign of fraud prevention architecture. It has also placed a demanding onus on financial institutions to implement highly precise risk controls while preserving the customer experience. The Window Is Closing As faster payments erode the traditional safety net around transactions, institutions must shift fraud detection to earlier stages of the payment process. In the past, organizations benefited from extended review periods, during which funds could be reversed if necessary. That capability is quickly becoming a thing of the past. “In the world of instant payments, specifically around RTP and FedNow, you’ve got an instantaneous movement and settlement of money. And that’s where the problem lies, because there’s no longer time to pull this stuff back,” Beyer said. “There’s no window where you have an ability to say, ‘I really didn’t mean to send it’ or ‘I fat-fingered this particular account number.’” “With that gone, it’s less of an opportunity for the people sending payments to fix problems, and that opens the window for fraudsters,” he said. In this environment, striking the right balance between strong fraud prevention and a seamless customer experience is difficult, especially given the high expectations shaped by card and ACH transactions. These challenges are accelerating the need for real-time decisioning, where firms analyze multiple data points to assess payment risk before processing. However, achieving high decision accuracy will likely require introducing some level of friction. While this may feel new in the context of real-time payments, methods like multi-factor authentication are already familiar to both banks and customers. “Every time I log into YouTube, I get a six-digit one-time passcode,” Beyer said. “If I have to do that for YouTube, why is my financial institution not making me do that? They do when I log in, but if I’m doing a big payment out, shouldn’t the same thing be happening? Isn’t the ‘friction’ of getting a one-time passcode worth the extra two or three seconds it takes to put that into the website? I think the answer is yes.” The challenge lies in applying the right amount of friction in an emerging payments model. This is where step-up authentication plays a key role. It allows institutions to adjust controls, enabling low-risk payments to proceed smoothly while subjecting higher-risk transactions to greater scrutiny. Even so, introducing any friction into the customer journey can raise concerns for financial institutions. “There has been an assumption that strong security will ruin the customer experience, but Javelin has found that good security can improve trust and adoption of certain payment channels and methods and new technologies,” Sando said. “Consumers and businesses want to know that their accounts and their money is protected and that they can trust the institution and the organizations that they choose to do business with.” The Widening Technology Gap Implementing safeguards that remain invisible to legitimate users yet highly effective against bad actors is no small feat, but the tools to optimize this balance are rapidly improving. Artificial intelligence has been instrumental in advancing these capabilities, as it has across nearly every sector. However, many financial institutions have lagged in adopting these technologies. “This is a scenario where it’s so rapidly changing the industry but the traditional players—processors and banks who are operating under a regulatory environment and are operating under an environment where you can’t inhibit people from getting access to their money—they have all these constraints,” Beyer said. “Fraudsters don’t, and they can just start playing with all these great new AI tools.” “There’s always been a gap,” he said. “Fraudsters have always been ahead of the financial institutions and the processors, and the reason for that is they’re more nimble; they’re able to get things done quicker. If you didn’t have that gap, you wouldn’t have fraud.” Unfortunately, this gap is not only persistent but widening. Rapid advancements in generative AI and the emergence of AI agents have enabled cybercriminals to scale both the speed and scope of their attacks. “Bad actors can adopt those technologies quickly, and they’re incredibly creative. I don’t want to give them applause for that, but they’re incredibly inventive in the way that they take risks to use new technology,” Sando said. “It’s difficult for FIs to keep pace when it comes to the adoption of any innovation.” “It’s no surprise that AI is a problem for criminal manipulation,” she said. “But we also know that it’s a huge asset for financial services that they could make great use of in terms of automating certain aspects of the customer experience. Or even the employee experience, for things that maybe used to be a manual review of transactions, or typical tasks that were completed during fraud investigations.” Buttressing the System AI has quickly become central to modern fraud defenses, given its ability to detect anomalies across massive datasets. However, the rise of real-time payments is fueling the demand for intelligent infrastructure that can function as an authentication layer within the payment flow. This is especially critical in commercial environments, where overly restrictive controls can lead to false declines or delays—issues that can quickly escalate into serious operational and reputational damage. Ultimately, faster payments are not just driving the need for better technology, they are forcing financial institutions to rethink their entire approach to fraud prevention. “The organizations that are succeeding in instant payments are going to be the ones that can make the competent decisions on risk just as quickly as that money is moving in that real-time setting,” Sando said. “Fraud detection isn’t just this back-office function anymore, that just happens in the background without real knowledge of it. You have to highlight fraud detection because it’s now a critical piece of the payment experience.” This shift in mindset is essential. The fraud threat is not going away, but institutions can take advantage of one constant: the pursuit of easy money often leads criminals down the path of least resistance. “Fraudsters are always going to find a way, but they are fundamentally no different than anybody else in business,” Beyer said. “They have an ROI, their time is valuable, and they’re going to go where they can make the most out of their time. If your bank or your processor is tougher to get through than your neighbor’s bank or processor, they’re going to go to your neighbor.” “Make your buttress, your fortress, your castle gate—all the armor that you’re going to put around your system. Make that better than your competition and they’re going to go to your competition,” he said. “You’re never going to get a 100% fraud-proof system. Fraudsters will always be ahead, but if you can make yourself better than the people around you, then you’re not going to be the target, they are.”
• From a Checkbox to a Differentiator: Redefining ACH Fraud Monitoring 30.03.2026 21мин

  Last year, the treasurer’s office in Warren County, New York sent $3.3 million to what it believed was the county’s roadwork and maintenance contractor. It was not—the payments were instead routed to a fraudulent account. Because the county had recently switched from paper checks to ACH, the treasurer’s office had no account verification policies in place to prevent what turned out to be a textbook case of fraud. While the damage in Warren County represents the upper end of the spectrum, this incident is far from an outlier. It underscores the importance of implementing ACH protections, which many organizations already have in place. Too often, however, these measures are treated as a set-it-and-forget-it solution or merely a compliance checkbox. In a recent PaymentsJournal podcast, John Gordon, CEO of ValidiFI, and Suzanne Sando, Lead Fraud Management Analyst at Javelin Strategy & Research, discussed how robust ACH fraud monitoring controls can do more than satisfy regulatory obligations—they can act as a proactive risk prevention mechanism. This is essential to combat the growing prevalence and complexity of fraud. The Importance of Trust The compliance aspect of ACH fraud monitoring is partly driven by the latest version of the WEB debit rule, instituted by Nacha—the organization that governs the ACH network. Nacha’s enhanced fraud monitoring requirements raise expectations for all participants in the ACH ecosystem. “It increases the bar to say that we’re not just checking the validity of the account, but we’re also doing fraud checks,” Gordon said. “It creates an opportunity for financial service providers to identify fraud and to look at the potential risk associated with a consumer.” “It moves beyond compliance for compliance’s sake, which creates a lot of opportunities for financial service providers to not only identify and reduce fraud, but to put consumers in the right products that create mutually beneficial paths for them,” he said. Finding the right fit with customers has become more challenging in the digital era, where consumers have more options than ever and increasingly expect efficiency in every interaction. As a result, consumers often choose the path of least resistance when selecting a financial institution. These factors place institutions in a precarious position: they must balance security with customer expectations, both of which significantly impact retention. “The importance of consumer trust cannot be overstated,” Sando said. “We’re finding that when consumers have experiences with fraud or scams on a particular account—whether it’s a traditional financial account like your checking or savings or a merchant account—if they’ve experienced any sort of suspicious activity or fraud and scams, they’re much more likely these days to close an account where the fraud occurred and move somewhere else.” Stepping Up Authentication Given the risk of attrition, account onboarding and authentication have become critical stages in the customer experience. One key challenge arises from misapplied friction, where every user is forced to undergo the same verification process regardless of risk profile. “Our belief is there’s enough value in customer data that it can be managed through step-up authentication, that you are injecting friction where friction is warranted based on the risk signals that consumers have in concert with their profiles—whether that be their bank account, their payment transactions, or their credit scores,” Gordon said. “There are a number of different ways to end up at the right answer so that you’re facilitating a flow where the consumers stay in the process and you are fast tracking your low-risk consumers and putting obstacles in place where they should be,” he said. This process can be optimized by leveraging the richer data available in a validated account. Institutions can go further by authenticating the account, confirming that the applicant’s name matches the account owner’s—allowing for a more targeted, efficient approach. Implementing these measures early in the process is critical for fraud prevention and enables a customized experience, reducing the verification burden on the institution. For example, if a consumer opts out during onboarding due to friction triggered by their financial profile, the institution avoids a potentially difficult credit decision. Conversely, highly qualified consumers can be fast-tracked, improving both the experience and conversion rates. Scouring Alternative Data Although authentication is vital, it is increasingly challenging under the current credit scoring system. Last year, traditional scoring methodologies eliminated medical debt—a significant portion of consumer credit—from scores. While this change reshapes scoring, it does not remove the underlying debt burden. Additionally, consumers now maintain more financial relationships than ever, including accounts at traditional banks, digital-first banks, and fintechs. Many of these relationships are undisclosed, complicating accurate assessments of creditworthiness. “It becomes incumbent upon financial service providers to look at alternative data in a way that they can derive value out of it,” Gordon said. “We believe the consumers’ bank behavior, their payment success rates, and the velocity with which their PII elements change are all clues that will lead you to have a more accurate picture of that consumer—what they can afford and their creditworthiness.” “When we factor in the way that consumers acquire credit today versus the way they did in 1989 when the FICO score was created, they’re wildly different,” he said. “The traditional scoring methodologies haven’t kept pace with the way consumers are acquiring credit now. We see scenarios where consumers apply with a clean bank account only to subsequently change to a neobank account or some other bank account that they’re utilizing to enact what equates to first party fraud.” Palatable to All Parties These challenges have driven the emergence of data-driven treatment strategies, where financial service providers leverage shared industry data. This intelligence provides critical insights into connections between consumers, accounts, identities, and performance metrics. Such knowledge enhances underwriting, creating a scenario where a consumer’s application experience is guided by both their inputs and industry knowledge of past activity. However, these strategies must always be aligned with the institution’s broader objectives. “We have a client that we work with that does account-to-account payments tied to loyalty cards,” Gordon said. “Their exposure in that scenario is fairly limited, they want as much acceptance as they can possibly get. Conversely, we have some clients who are doing large dollar distributions, and it is not too much to ask for someone to credential into a bank account and we’re talking about the potential for five- and six-figure disbursements.” “It’s difficult to ensure that you’re keeping down the cost of doing business, the fraud losses, and ultimately the cost of credit,” he said. “When you marry the authentication process to the use case, you end up with a lot better solution that’s more palatable to all parties.” Confidently and Compliantly Developing strategies and implementing fraud management measures is imperative, as new and potent fraud variant emerge daily. The most effective defense is sharing information and leveraging a risk intelligence provider to help chart the way forward. “It’s finding a solutions provider that is flexible and can adjust and be agile in the same way that we find fraudsters are agile with technology and how they can use it against consumers,” Sando said. “It’s also about recognizing the fact that consumers are not all the same, it’s not one-size-fits-all. It’s about having that solution provider that can help you figure out how we navigate each individual case to make sure that it’s optimized for every single customer that comes through the system.” These solutions help organizations stay ahead of escalating fraud threats and maintain compliance with regulations like Nacha’s rule enhancements. But that’s just the beginning. “There is a lot of opportunity beyond compliance in account verification and authentication,” Gordon said. “What we see is that not only will more of your payments clear, but there are certain attributes and thresholds that , when crossed, significantly improve performance. Meaning, you’ve verified the account, the account has a certain history, and it doesn’t indicate any of the negative attribution that we often see compounded by a name match. You have the ability to operate confidently and compliantly in a way that you probably aren’t enjoying at present.”
• The Emotional Toll of Financial Fraud 26.03.2026 22мин

  As financial fraud continues to accelerate, its impact on victims goes far beyond monetary loss. The emotional and behavioral effects are long-lasting, shaping future decisions and sometimes undermining trust in their financial institutions. Substantial progress has been made in strengthening fraud detection and prevention, but much work remains—especially in the age of AI. In a PaymentsJournal podcast, Dal Sahota, Global Director of Trusted Payments at LSEG Risk Intelligence, and Suzanne Sando, Lead Analyst of Fraud Management at Javelin Strategy & Research, discussed how fraud affects different generations and what banks can do to stay ahead of the problem. Fraud Comes from Everywhere It’s hard to go a single day without encountering a scam attempt or hearing about someone who has been targeted. This constant exposure underscores how sophisticated and pervasive fraudsters have become. LSEG’s latest global research shows that most consumers believe scams are on the rise. As more aspects of life move online—opening new avenues for fraud—it is clear that everyone is at risk. “This morning, I got an email from a car rental company about a supposed upcoming trip from Orland Park, Illinois,” said Sando. “As someone who lives in Milwaukee, about an hour and a half outside of Orland Park, I’m not picking up a rental car there. But you stop and think, ‘hey, I do find myself randomly researching trips. Could this have been something that I looked up and maybe I’m getting a prompt from their website?’ That’s how people end up clicking on phishing links or providing details they didn’t intend to reveal to a fraudster.” Across the Generations Because scammers have become highly skilled in targeting, each generation experiences fraud differently. Scams exploit areas where specific groups are more vulnerable. Older generations expressed the highest concern about fraud in the LSEG study, while younger groups reported greater exposure to emerging threats such as deepfakes and “quishing” attacks. Reactions also vary by age. Some 97% of victims reported changing their behavior after being scammed, becoming more cautious online, sharing fewer financial details, and avoiding certain channels. Some may feel so insecure about certain payment types that they abandon them  entirely. Older adults, however, tend to experience the greatest loss of trust compared with other groups. “There are deep levels of distrust in any and all communication, which can be really devastating when you’re trying to maintain a relationship with your financial institution,” said Sando. “If you don’t even know that you can believe what’s being sent to you from your bank, what can you believe? Once that security feels like it’s just an afterthought and that trust has been violated, it’s really hard to go back to business as usual.” The Information Gap The effects of scams extend beyond individual victims—they ripple throughout the financial services ecosystem. “That really comes out in the research, how that’s impacting consumers and the lack of trust when they’re interacting in digital channels,” said Sahota. “We found that 32% of respondents reference shame as an emotional impact. And this is very devastating in the market.” A significant information gap exists regarding accessibility and the warning signs of potential fraud. Less than a quarter of LSEG’s survey respondents described themselves as well-informed  in this area. Separate data from Javelin indicates that many consumers are unaware of the educational resources their financial institutions offers, even when these resources are available online or via mobile apps. These programs are only effective if consumers can locate and act on them. “We can think about this in terms of vulnerabilities that they’re under and how those are targeted,” said Sahota. “Don’t assume that the consumer’s first language is English, for example. Those are nuances to work within, but the fraudsters really take advantage of those exposed vulnerabilities.” Sando added: “A lot of financial institutions post really text-heavy articles. Frankly, you’re seeking out education when you need it the most. You’re not sitting around on your couch on the weekend reading education on your bank’s website. You’re going to it in that moment. So it has to be hitting the consumer right at the part where it’s most critical.” A More Personalized Experience Financial institutions could benefit from delivering a more personalized experience, tailoring education based on demographics and customer behavior. Understanding what resonates—by geographic location, generation, or product ownership—helps identify who is most vulnerable to specific scams and how to reach them. “You’re not going to hit older generations with a lot of pop-up notifications on their phone,” said Sando. “That’s not the typical way that they consume information.” Once someone has fallen victim to a scam, they often struggle to focus on available resources or their rights. This is when financial institutions must guide them through the recovery process. “A scam victim shouldn’t have to be the most well-informed person on the process of reimbursement and resolution for your scam,” said Sando. “You want to have a highly trained investigator or case worker from your financial institution that’s there to walk you through because you’re already having to bear the burden of the financial loss.” Playing on Offense With money moving faster than ever, applying the right level of friction to the right type of payment reassure consumers. A small verification step can provide certainty that the beneficiary is legitimate. Friction that ensures validation is not a barrier—it’s a protective measure. Too many institutions wait until validation occurs too late. In the era of real-time payments, once a transaction is submitted, the money is gone. Prevention must come before the payment, not after. “We are focusing earlier on in building a full picture of ‘Who is this person I’m paying? What’s their historical account information?’” said Sahota. “Building a full picture and using the data that we have access to as financial services can make the difference in detecting suspicious activity before it’s too late. There are a number of vulnerabilities that the fraudsters and the scammers are exploiting. They continuously evolve. The leveraging of AI in that regard has really scaled the scams up. We need continuous risk assessment of all the aspects across the value chain.” “We continue to play from behind,” he said. “We’re always on defense, we’re never on offense. We’re always being reactive when we should be proactive.” To explore the full breadth of consumer insights referenced in this discussion you can review the complete survey findings in LSEG’s After the Scam research.
• What Should Credit Unions Be Doing with Crypto? 19.03.2026 29мин

  Many credit unions are grappling with the differences between cryptocurrency, stablecoins and tokenized deposits—and whether these innovations fit into their business model. It’s important to take a step back and allow strategic evaluation, rather than urgency, to drive decisions around digital assets. Velera and its Digital Asset Lab are helping credit unions overcome the “fear of missing out” that often accompanies emerging technologies like crypto. In a PaymentsJournal Podcast, Velera’s Vlad Jovanovic, Vice President of Innovation, and Nathan Meyer, Senior Innovation Strategist, as well as James Wester, Director of Cryptocurrency at Javelin Strategy & Research, discussed what credit unions are doing—and should be doing—in the digital assets space. Three Primary Categories of Crypto The concept of digital assets now encompasses stablecoins, tokenized deposits and a range of cryptocurrencies such as Bitcoin, Ethereum and Solana. Cryptocurrency itself has evolved into a speculative asset class that consumers can buy, sell, trade and hold. Its volatility makes it risky, but people are using it to grow wealth, diversify portfolios and explore the broader digital assets landscape. Regulatory guidance on crypto is still incomplete. The CLARITY Act, which aims to provide a clear regulatory framework for digital assets, is still progressing through Congress. For these reasons, most credit unions are approaching crypto cautiously. “Do you want to create a connection point that allows your members to be able to transact with Bitcoin or Ethereum or Solana?” said Meyer. “That creates more risk exposure for the member, as well as concerns around what type and level of trading you’re allowing them to do. Because there is volatility, it can have significant impacts on them—both positive and negative.” Stablecoins and Tokenized Deposits Stablecoins function primarily as a payment instrument, designed to provide liquidity and trading within the crypto market. They are typically backed by secure assets, most often U.S. dollar-backed assets, such as short-term Treasurys. Stablecoins can be thought of as a new payment rail—just as FedNow and RTP provide speed for real-time payments, stablecoins offer similar capabilities. The first step for a credit union considering stablecoins is to assess whether member demand exists. Without demand, creating additional infrastructure is unnecessary. But for organizations with members engaged in remittance, stablecoins can move money more efficiently and at lower cost than traditional wires. Another important type of digital asset is tokenized deposits. This infrastructure enables credit unions and banks to tokenize existing balance sheets and bring them into the digital realm. Tokenized deposits can remain internal to a credit union’s ecosystem, but some institutions are exploring them for intraday settlement or liquidity pools. “We’ve seen a lot of VC dollars enter the space and a lot of start-ups are creating hype around their technology,” said Jovanovic. “That in itself is going to create a bit of a FOMO effect within the credit union industry. Am I doing enough? Should I be doing more?” The Coming Regulatory Impact Rules governing digital assets are still evolving. The GENIUS Act, passed in July 2025, provides a framework for exploring use cases and applications of this technology. NCUA has issued proposals outlining constraints related to crypto, which credit unions should review carefully before moving forward. Credit unions should also monitor the CLARITY Act as it moves through Congress to inform decisions around partnerships and exposure to digital assets. One immediate opportunity is engaging with regulators to help them understand credit unions’ needs—shaping regulations in a way that benefits both institutions and their members. “Stablecoins and crypto to some extent have been wrapped up politically in ways I haven’t seen with other technology,” said Meyer. “I never had to worry about thinking through cloud migrations and worrying that as soon as an administration changed, the dynamic around that technology was going to deflate or inflate. There is a lot related to crypto that has tie-ins politically, and that is feeding some of this movement versus the actual problem it solves or demand.” “It’s important for credit unions to understand both the CLARITY and GENIUS Act, but also understand if you get out over your skis in this space and a different administration comes in, regardless if it’s Republican or Democrat, you could see a very different perspective on privatization of stablecoins and money in general,” he said. What Should Credit Unions Do Now? For most credit unions, the first step is education—learning both the technology and the regulatory landscape of stablecoins. Bringing in digital assets experts, participating in industry consortiums, and collaborating with peers can accelerate this process. Ultimately, the most important questions revolve around members’ needs and the organization’s strategic objectives. “One of the best ways to cut through hype is to ask why,” said Wester. “How does that support the mission of my bank, my credit union, my product? That’s a really important question, because if you have somebody coming to you from either the vendor side or the crypto and digital asset space, it feels like hype.” Meyer added: “If you truly know who you are and what role you play in the community for your members, it allows you to avoid false signals. You can point to that strategic structure of who you are and very clearly articulate where this fits within that umbrella.”
• The Fate of Agentic Commerce Hinges on an Elusive Resource: Trust 18.03.2026 25мин

  In the past, banks and businesses could build rapport by delighting customers over several interactions. That window has largely disappeared amid the impersonal nature of today’s digital ecosystem—and the growing sophistication of fraud. The surge in fraud and money laundering has prompted many experts to advocate for a return to a zero-trust framework, where every party must be verified before a transaction proceeds. That mandate will only grow more complex as agentic commerce gains traction and AI agents—and their intentions—must also be validated. In a recent PaymentsJournal podcast, FinScan’s Chris Ostrowski, Head of Product Management, and Kieran Holland, Global Head of Solutions Engineering, along with Christopher Miller, Lead Emerging Payments Analyst at Javelin Strategy & Research, discussed how these factors have placed a premium on trust. There are tangible ways organizations can build trust in a real-time, agentic environment. Increasingly, however, those efforts must take place long before a transaction is ever executed. Accelerating Social Change Many artificial intelligence enhancements have been implemented behind the scenes, from workflow optimization to cybersecurity. While customer-facing tools like chatbots have been successful, asking consumers to entrust shopping and payments to AI agents requires a far greater leap of faith. That leap comes at a time when many consumers are experiencing a crisis of confidence. Fraud attempts have become both relentless and highly convincing—and too many individuals have fallen victim. “I always give the example of what I would say to any member of my family who says, ‘I’ve received an e-mail offering me this deal or a massive bargain,’” Holland said. “If someone came up to you in the street and said, ‘I’m a Nigerian prince who wants to give you $5,000 if you could cash that for me,’ would you trust them?” “There’s still that social change needed, because when something is not face-to-face, I have to have certain controls and mechanisms to make me feel confident,” he said. “Maybe that change will eventually become ingrained; maybe it just won’t. Maybe us humans need a certain amount of confidence that we used to get from face-to-face interactions.” To rebuild confidence in a digital-first environment, organizations must establish effective risk controls around payments. That task has grown more complicated amid the rapid expansion of payment types, now spanning cards, crypto, and real-time payment rails. This proliferation has elevated payments orchestration platforms to the forefront. These platforms not only operate across multiple payments rails, but also enable businesses to intelligently route transactions to optimize authorization rates, timing, and cost. Such optimization is no longer just a matter of efficiency. It’s foundational to establishing trust before a transaction ever occurs. It’s also a prerequisite for agentic commerce to scale meaningfully. “With those true agentic payments, you’re trusting that individual to act on your behalf with that vendor, potentially for the first time, or even a network of vendors,” Ostrowski said. “You have to trust through interaction, but also within access and being able to facilitate enabling the right credentialing and set of controls within it. So you don’t have your agentic AI go out and buy you 10,000 rolls of toilet paper because it was more efficient to do it that way,” he said. “You’re having to put a lot of that trust up front.” Given the potential volume and velocity of agent-driven transactions, trust must rest on a firm foundation. Achieving that will require broad industry alignment—a necessary, though potentially challenging, step. “One of the interesting things here is that trust means something different for each participant in a transaction like this,” Miller said. “There is what a merchant needs to trust, there’s what an issuer needs to trust, there’s what a processor needs to trust, and there’s what consumers need to trust. There’s just a lot here to think about in terms of how we can get all the participants to agree to do the transaction.” Driving the Next Generation of E-Commerce This industry-wide agreement between merchants and financial services firms will be paramount because the roles and responsibilities within agentic transactions remain fluid. “You’re setting conditions around more of an event-driven architecture,” Holland said. “When something happens on this system, then do something else for me without me having to initiate it. But who defines what the criteria for that is? Who designs the guardrails around that and who—I suppose legally and philosophically—holds the responsibility for saying, ‘I want this?’ And now the AI has translated that into a set of conditions that it’s going to use.” “It’s the same concept in fraud prevention as in retail banking,” he said. “We don’t expect the end consumer to be the perfect guardian of their own financial health. We accept a certain level of responsibility across the injury to help them in that regard. I think the same is going to be true of agentic AI.” Like modern payments infrastructure, agentic commerce will likely include baseline controls. However, banks will still need to implement their own safeguards, policies, and compliance frameworks to protect customers and their institutions. Larger financial institutions may need to take the lead, gradually introducing customers to agentic commerce through limited, well-defined use cases that build familiarity and confidence over time. “You’ll probably see something similar to the use of Zelle in the U.S. where you have banks coming together and putting those safeguards around it at a common level,” Ostrowski said. “It can drive the growth of agentic AI usage within various financial services, within payments, and within retail itself.” “You’re also going to continue to see the growth of trust registries, where you go through verification processes to be placed on the registry to show that I have proven my ability to be trusted, and that information can follow along with the agents,” he said, “especially within the blockchain space of being able to cryptographically assign transactions and agents with certain rights. All of that can be facilitated at these larger institutions that are already learning it in other areas, to help drive this next generation of e-commerce.” The Messaging Standard A consortium-driven approach to agentic commerce will hinge on clear, standardized communication. Although the ISO 20022 messaging protocol was not developed specifically with agentic commerce in mind, its rich, structured data model is well suited to this paradigm. “ISO 20022 has been designed deliberately so that much clearer information is available about what this transaction is and who’s involved,” Holland said. “Whether you need to identify the name and location of the ultimate debtor, the ultimate creditor intermediaries and so on, that new standard was designed from the ground up to do that.” “It’s important because when you look at how AI within compliance is starting to take off, data is the foundation to that,” he said. “If you haven’t got good foundational, reliable data about who’s involved and who the counterparties are, making a good, accurate, and certainly more automated decision comes with significant risk.” A common messaging standard becomes even more critical as transactions accelerate towards real time. For example, stablecoins and agentic commerce share significant synergy: both are real-time, highly efficient, and capable of leveraging ISO 20022’s enhanced data capabilities. For stablecoins to integrate fully into mainstream financial systems, however, transactions must embed sufficient data to distinguish them from other cryptocurrency transfers. They must also incorporate compliance-related information, including support for travel rule requirements. “That whole sphere comes back to the standard ISO 20022 fields and that consistency we’re starting to get to be able to go forward in these various ways,” Ostrowski said. Making the Final Decision More advanced communication standards, efficient infrastructure, and stronger safeguards are all critical to fostering trust in an agentic commerce ecosystem. Yet none of these solutions can replace distinctly human qualities—creativity, empathy, curiosity, and judgment. “It’s a true saying that if you design a very fixed, very structured, automated system, us humans will always find a new scenario, a new circumstance that is all of a sudden going to break it,” Holland said. “Introducing humans into it is that creativity buffer where I can see that Chris has bought 10,000 rolls of toilet paper, I can see that it meets his preferences, but I as a human know that’s unlikely.” “That curiosity whereby humans can still intervene and say 99.9% of the time this might be right, but with my insightfulness, with my creativity, I can introduce that human factor back into this overall very tightly structured process,” he said. “I become that level of flexibility that’s not going to break the system.” The human element won’t disappear, because AI agents are ultimately designed to act on behalf of individuals. Preferences differ widely and evolve constantly. An AI agent may learn a consumer’s favorite restaurants, events, or airlines. But human priorities shift. Tastes change. Context matters. In the end, even in an agent-driven economy, trust will remain deeply human. “Maybe that day you feel like a window seat instead of an aisle seat, and your agent would say, ‘No, that’s not your typical pattern, you normally do this,’” Ostrowski said. “There’s still that level of independence that the human wants and over time the agent will try to mimic that, but you’re still never going to completely replace that.” “It’s similar to what we’re seeing within the regulatory environment, where regulators aren’t ready to hand off agentic decisions for risk evaluation or compliance approvals to agents entirely,” he said. “They still want to see a human reviewing the cases, making decisions on whether I should onboard or reject a type of transaction. I want to be the one approving it; I want to be making that final decision. It’s doing 90% of the work for me, but I want that last 10% to stay with me.”
• Tokenization: From Security Tool to Future-Ready Payments 10.03.2026 20мин

  High-profile data breaches at major retailers exposed thousands of consumers’ personal account numbers (PANs), spurring the adoption of tokenization—a solution that replaces sensitive account data with surrogate values, protecting both consumers and merchants. As tokenization scaled, its benefits proved to extend well beyond fraud prevention. Merchants often saw meaningful lifts in authorization rates. But the rise of competing token types, the emergence of agentic commerce, and evolving policies from industry leaders have made tokenization strategy more complex than ever. In a recent PaymentsJournal podcast, Kiel Cook, Principal Product Manager at IXOPAY, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, explored tokenization’s performance advantages—and why the next phase of change represents an opportunity for merchants to take the reins of their payments destiny. Avenues to Authorization As demand for tokenization increased, card networks introduced network tokens, payment service providers (PSPs) issued proprietary tokens, and third parties developed universal tokens to bridge ecosystems. For a time, the industry speculated about which format would ultimately prevail. “The different forms of tokenization were pitted against each other as a this-or-that scenario in the beginning,” Cook said. “But over time, especially in 2025, what I realized was these are actually a better-together play. Ultimately, when we’re talking about payment credentials, we’re talking about authorization rates. Network tokens are a trusted source and typically increase the likelihood of avoiding soft declines.” “But there are still scenarios where the network token may fail or may not be the most apt payment credential to use,” he said. “Those who are positioned to pivot back to the PAN when needed are the ones that are going to win. The more avenues you have to obtain authorization rates, the better.” Beyond security and authorization benefits, tokens are persistent. They stay current even when underlying cards expire or are replaced. This reduces unnecessary declines in card-on-file and recurring payment scenarios. Tokens can also serve as a common denominator across P2Ps, acquirers, and regions. When paired with payments orchestration platforms, they unlock operational flexibility and significant efficiency gains. Together, these advantages make tokenization foundational to modern payments infrastructure. Yet rapid adoption has also surfaced new pain points for merchants. “As the merchant landscape and consumer shopping started to evolve into omnichannel and then mobile, merchants would go with best-of-breed providers and sometimes wind up with multiple tokenization stacks,” Apgar said. “When you now want to change PSPs or you want to make a change to a sales channel or bolt on another vendor, it becomes a real issue if you don’t have control over the token.” The Question of Ownership For small businesses just getting off the ground, token ownership is rarely top of mind. Payments services are often lumped into the broader cost of doing business. “It’s usually not until an issue arises with their PSP, such as downtime or some new technology gets launched into the market and their PSP doesn’t have that,” Cook said. “Then they’re looking to move and they realize they don’t have the authority to make those decisions; they need the permission of their provider in order to take their data and put it somewhere else.” “In that moment, the question is, ‘Do you own your data? Do you have control? Can you do what you need to do to drive efficiency, to increase your bottom line with your customers, to increase your brand recognition, to have a robust payment connectivity layer?’” He said. That calculus changes as merchants expand and integrate multiple PSPs. At that stage, token ownership directly impacts portability, routing flexibility, and negotiating leverage. In short, whoever controls the token controls critical aspects of the payment relationship.   “How much autonomy would you like to have in your payments decision?” Cook said. “That’s going to help you understand how important ownership of your own data is going to be for you. Those who own their payment credentials own their own destiny.” The Tokenization Mandate Payment credentials remain incredibly powerful and increasingly difficult to safeguard amid rising fraud sophistication. To strengthen protections, Mastercard has committed to tokenizing all e-commerce transactions by 2030. While many support the spirit of this mandate, merchants are struggling with its practical implications. Credit cards will still be widely used in 2030, and issuers will continue to provide PANs to consumers. However, PANs will likely play a diminished role in the transaction lifecycle. That shift makes universal, merchant-driven tokenization essential—not only for protecting customers, but also for maintaining PCI compliance. “The 2030 mandate is more of a requirement to convert a PAN to a network token because I don’t see PANs being completely removed from the ecosystem by then,” Cook said. “Digital wallets will continue to expand because merchants will start to receive more network tokens through avenues or rails that are out of their control.” “But there will still be times where someone who’s on the other side of the digital divide that hasn’t adopted a digital wallet and is still coming in trying to process with their PAN,” he said. “The onus will be on the merchant in those scenarios to have the avenues to convert PANs, when they do receive them, to network tokens.” Developing Agentic Trust A more proactive tokenization strategy is becoming critical as the payment ecosystem approaches another inflection point: the rise of agentic AI. These autonomous agents are poised to become a mainstream shopping interface. “We’re going from one payment credential—historically the PAN—to now a proliferation of payment credentials and line of sight to where these are coming from,” Cook said. “How do you know what to trust and what not to trust? How do you know the difference between an agentic agent that has permission versus a bot hitting your website?” “One of the big things is making sure that you as a merchant have your data stored in a way so that the agent can pick it up and share it with the consumer on the other side of that search,” he said. “Not having your data in the correct format or being able to be picked up in a certain way is going to be a big challenge for your company to maintain line of sight to your consumer, as they have a new middle layer managing the interaction.” This highlights a new core challenge—trust. Merchants must verify not only the consumer, but also the AI agent acting on their behalf, along with permissions and intent behind each transaction. Meeting this need will require new infrastructure capable of assessing and managing agentic risk. Tokens can play a pivotal role by creating guardrails around agent-driven activity. Merchants should begin preparing now to support agentic-ready token frameworks. “Keep in mind, it’s just a different version of a network token, which are just payment credentials,” Cook said. “Universal tokenization should be looked at as, ‘I’m about to get bombarded with payment credentials that are scheme-persisted. I don’t control the usage; I don’t control the relationship; these things weren’t built with me in mind. What was built with me in mind? What is my tool to anchor myself?’ That’s universal tokenization.” “That’s the playbook that I would put out there for merchants to leverage to protect themselves,” he said. “It’s making sure that they have line of sight to who is who and having something that they can drop directly into their ecosystem without having to re-architect their entire payment stack in order to be relevant in the agentic commerce world.” The Tactics Are Changing The rapid evolution of payments—especially the acceleration of generative and agentic AI—has created urgency for many merchants to modernize. While adopting new technologies is important, strategy must remain grounded. “If you go back 10 years ago, we were in the same place with tokenization and everybody rushed to tokenize as a stopgap security measure—only to find out down the road that I now need a more holistic strategy around how I use tokens and what benefits they give me beyond security,” Apgar said. “That’s where we are with AI, too,” he said. “My advice to merchants would be slow down the conversation and understand what AI means for your business, for your customers and your data security—and try to put a strategy around all of this.” At its core, any tokenization roadmap should be a natural extension of a company’s broader mission: protecting customers, optimizing performance, and maintaining control in a dynamic ecosystem. “We’re talking about consumers making a purchase and merchants receiving a payment credential and maintaining line-of-sight to their customer for loyalty plays, security plays and so on,” Cook said. “This is what we’ve always been doing; the tactics are just changing. This is change management. Are you paying attention to the things that are changing? Do you see the incremental adjustments that are occurring and are you adjusting as you go?” “If you have a rigid approach to your processing stack, that’s when things will become detrimental,” he said. “At the end of the day, no one can see what’s on the other side of the 2030 line. The best thing that you can do is put yourself in a flexible, future-proof payment stack so you’re prepared for whatever payment credential that comes on the other side.” Learn more about how agentic commerce shifts risk to merchants and breaks traditional fraud models
• Despite Fintech Encroachment, Banks Can Remain the Go-To for SMBs 09.03.2026 21мин

  For many small business owners, the workday doesn’t end when customers leave. It continues late into the evening—logging into multiple dashboards, exporting spreadsheets, reconciling transactions, and trying to make sense of scattered financial data. In the absence of a centralized solution, many have been forced to stitch together a patchwork of banks, fintech apps, payment processors, and accounting tools just to keep their business running. Reconciling these fragmented systems has become a drain on merchants who are already stretched thin. This growing complexity has implications beyond the merchants themselves. As small businesses expand their financial relationships across multiple providers—and as physical banking touchpoints become less frequent—financial institutions are finding it harder to cultivate meaningful connections with this segment. What was once a relationship-driven business risks becoming transactional. In a recent PaymentsJournal podcast, Eleanor Bontrager, VP of Product Management at Fiserv, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed how banks still hold an advantage in small business financial services. However, many financial institutions will need to shift their strategies to become the centralized financial hub that SMBs increasingly expect. Eliminating the Spreadsheets While financial management is critical to any business, it is only one facet of running an organization. The more time business owners devote to managing finances, the less time they can spend on other key tasks. As digital payments have evolved, merchants have adopted a growing array of tools to deliver the payment experiences and financial services customers expect. As a result, small business owners often cobble together fragmented solutions that were never designed to work in concert. “They’re having to look at the disparate data that comes from those tools and try to imagine what their cash flow position might be,” Bontrager said. “Many aren’t even really using tools; they’re using Excel spreadsheets. They’re literally sitting down with a pen and paper trying to figure out what money they expect to be coming in and what money they expect to be going out and trying to figure out what that means for their business.” Amid these challenges, merchants don’t want more tools to bolt on. Instead, they are seeking a streamlined solution that enables seamless, transparent transactions and provides a holistic view of their cash flow. Cost remains an important consideration. Yet many merchants would willingly invest in a unified platform that reduces administrative burden and minimizes the errors common in manual processes. “We’ve seen research recently where small businesses will spend an average of 25 hours per week just trying to manage data between various financial applications,” Apgar said. “They’re not doing that when the store is open, that time is family time—after hours and on weekends—where people are constructing spreadsheets and poring over paper statements.” “The data from their point of sale has to be reconciled back to their bank statement,” he said. “You have payroll to manage, vendors have to get paid, and those invoices have to get reconciled to inventory. There are so many moving parts.” All Their Financial Eggs in One Basket These variables have led SMBs to increasingly seek a single financial home. Ironically, this desire often stems from the complexity created by maintaining multiple financial relationships—business owners now need a centralized cash flow hub that aggregates their various accounts and functions. While such a solution may not eliminate every external relationship, it provides merchants with a critical anchor. Once engaged on a centralized platform, banks are well positioned to differentiate themselves and deepen relationships with their SMB clients. “All in all, money moves faster within the financial institution environment, so the FIs have a clear advantage here,” Bontrager said. “That’s what small businesses want and need, to be able to make those payments easily and quickly. They’re also looking to have that secure, trusted relationship. Within the bank environment, those fraud and risk protections are very much built into that experience.” “As we think about the ideal solution, it’s taking some aspects of the fintech solution and making those available in the FI channel,” she said. “For example, many small businesses have a strong preference for putting all of their spends on a credit card. Being able to make that available within a payment application and not just relying on DDA accounts. That can be important to package all of that up together, just for the convenience of the small business.” Consolidating banking and fintech relationships into a single hub may seem counterintuitive, given the adage warning against putting all one’s eggs in one basket. However, diversifying an investment portfolio to mitigate risk is fundamentally different from streamlining a small business’s banking infrastructure for efficiency and clarity. “When we say having all their eggs in one basket, it not suggesting that the way for FIs to win in small business is to be a one-stop shop and provide every single financial service that a business could want,” Apgar said. “It’s really about having all the financial data in one basket to the extent that data can be exchanged.” “Even if businesses are using some fintech services, API architecture that’s common today facilitates that kind of data exchange, so the FI can come to the forefront with a complete snapshot of the small business’s financial health and cash flow—and really become the primary partner,” he said. From Data Harvester to Trusted Advisor Data has become central to modern financial services because it helps organizations personalize their offerings in a digital environment. “There can be so much data; it’s being able to take that data and translate that into timely, accurate advisory nudges to the small business that help them anticipate when they’re at risk or see that there’s an opportunity,” Bontrager said. “That’s becoming more of an expectation. It’s, “Hey, you might go cash flow negative next week’ or ‘Looks like your revenues are increasing, are you looking to open a second location? Can we help you with that?’” Yet solutions that deliver these types of actionable insights to small businesses have been limited. Historically, many financial institutions didn’t treat the SMB segment as a strategic priority. Smaller merchants were often funneled into consumer products or served by commercial and treasury solutions built for much larger enterprises. The traditional small business strategy—such as it was—centered largely on branch-based relationship building and small business lending. “There’s so much more that they can be doing,” Bontrager said. “Being able to meet small businesses where they are and provide solutions that allow them to make payments, receive payments, reconciliation, automated workflows. Providing those solutions is key to being able to continue having the small business relationships that they have today.” “That relationship aspect is always going to be super important, but you need to be able to have an excellent digital solution from a payments and receivables perspective in order to keep fostering that relationship,” she said. “As they do that, they’re going to have more data about that small business and that’s going to help them better serve their small business customers.” Becoming the Central Financial Hub While holistic SMB platforms are quickly becoming a market expectation, many financial institutions lack the infrastructure or resources to build and deliver them in-house. This moment represents a tipping point. To stand out in a crowded market, banks must rethink and modernize their small business banking strategies. “The reality is that the customers are already filling in those gaps on their own today,” Apgar said. “Rather than wait until you can build everything internally to provide 100% of your customer needs, it makes sense to embrace relationships strategically with the right partners to be able to create that end-to-end digital solution—both from service delivery and also from a data perspective—to deliver those key insights that businesses are looking for.” The first step is simple: listen. By engaging small business customers and understanding their pain points, banks will uncover common themes—such as the need for intuitive workflows that simplify payments, receivables, and cash flow management. The ultimate objective is to provide a solution that helps small business owners focus on growing their business rather than managing its financial complexity. For many banks, achieving this vision will require strategic partnerships and external support. “Think about where those partnerships can come from that will help them be able to deliver a solution like that and have some speed to market that will allow them to quickly meet the needs of small businesses,” Bontrager said. “In doing so, if they’re able to provide the key insights that the small business is looking for, the upside for the financial institution is they have that data, and they can also benefit from those insights and make better risk or underwriting decisions.” “There’s a lot of potential in the solutions that are available,” she said. “It comes down to evaluating the problem, figuring out who their small business customers are and what their needs are, and then being able to provide them with solutions that meet their needs.”