The PaymentsJournal Podcast

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.” [contact-form-7] The post The Instant Payments Shift Is Testing the Limits of Legacy Banking appeared first on PaymentsJournal.

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.” [contact-form-7] The post Embedded Payments Are Becoming Core to Vertical SaaS appeared first on PaymentsJournal.

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. [contact-form-7] The post Inside Banking’s $10 Billion Inflection Point appeared first on PaymentsJournal.

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.” [contact-form-7] The post The Hidden Cost of Fraud Disputes Is Hitting Banks Hard appeared first on PaymentsJournal.

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 post Crypto Payments Are Ready for the Mainstream appeared first on PaymentsJournal.