PaymentsJournal

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.

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.”

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 ev

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

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.”

With the advent of faster payments, many financial organizations have prioritized speed over fraud detection. Consumers expect instant transactions, but banks must still protect themselves and their customers from fraud. Running fraud detection in the background—analyzing contextual signals and historical data—helps strike the right balance between speed and security. In a PaymentsJournal Podcast, Diarmuid Thoma, Head of Fraud & Data Strategy at AtData, and Jennifer Pitt, Senior Analyst of Fraud Management at Javelin Strategy & Research, discussed how traditional fraud detection methods have fallen short in the era of real-time payments. The key today is to stop fraud before it occurs. Moving Protections Upstream For customers, speed is paramount—but that speed is only required at the transaction or decision phase. Banks can conduct much of the pre-authorization and risk assessment before a transaction ever happens, without the pressure of real-time execution. By the time a customer reaches the transaction stage, the bank should not be scrambling to complete all fraud checks instantly. Many institutions focus on where the financial loss occurs. When a transaction results in a chargeback, they look to fix the transaction itself. In most cases, however, that wasn’t the customer’s first interaction. The initial touchpoint often occurred much earlier, well upstream of the chargeback. “With account takeover, you can see a lot of behavioral signs before payments even happen,” said Pitt. “If the information is changed in something like an account profile, that’s a clue. Logins from different areas at different times can be a clue. If that is flagged first, then essentially the suspicious payment doesn’t happen, and there’s no loss to either the consumer or the financial institution.” Building an Identity In the traditional brick-and-mortar world, banks might have asked for a driver’s license or passport to open an account, perhaps along with a utility bill to verify an address. While those documents could be forged, such cases were relatively uncommon. Today, verification relies on digital identity. Devices, IP addresses, and email accounts form the foundation of an identity profile. That profile extends across consortium networks containing prior transaction data, creating a clearer picture of how a consumer behaves. For example, is this person likely to buy $1,000 sneakers? “It’s building an identity,” said Thoma. “Even in the physical world, who we are is defined by liking a certain bar, or shopping at a certain store. All of those together, that’s you. All we’re doing now is taking that and translating it into a digital concept. From a fraud perspective, that builds consistency. The nice thing about good people, from a fraud profiling point of view, is they’re very consistent.” Modern fraud professionals build dynamic profiles rather than relying on static identifiers. They can construct timelines spanning five or 10 years—whatever data is available—representing a big leap forward from traditional methods. “When I was in the banking world, part of my role was to evaluate investigations to see if the investigations were done correctly,” said Pitt. “I would frequently listen to different calls from customer service reps and call centers. Several times I listened to calls where the fraudster themself was trying to make a wire transfer. “The call center rep just asked for basic information like name, date of birth, normal knowledge base questions. Information that you can get pretty much anywhere, from leaked data breaches to background check websites,” she said. “That wire was able to go through. And when the customers called in to say there’s fraud, the customer service representative said, well, no, you verified the information.” Bringing the Information Together Many financial institutions still conduct manual reviews one transaction at a time. This approach yields insight only into those specific transactions and fails to reveal broader fraud patterns or emerging tactics. “I still see small financial institutions operating as if there were no internet,” said Pitt. “They’re essentially verifying physical documents, especially in branches with human detection only. That is not good enough anymore with the AI tools that are out there for fraudsters. It is so easy to fake or forge some of these documents. You can’t rely on a human detection for that.” Compounding the issue, criminals understand reporting thresholds. They deliberately stay below those limits, spreading activity across multiple accounts and institutions. That is why consortium data-sharing is essential for identifying coordinated patterns that would otherwise go undetected. The Best Quality Data In the early days of social media, companies could look up a profile to confirm a person’s existence. Today, AI can easily generate convincing social profiles across multiple contexts and geographies. Fabricating digital footprints isn’t only simple, it’s scalable. The challenge for banks is no longer finding data, but finding data that can’t be easily manipulated. “Ideally, the best quality data is immune to automated generation,” Thoma said. “Sources that are unconnected to each other are independent of each other. An email is unrelated to a device from a data perspective. When you take in all this data from unconnected data sources—if they all agree that something’s good—generally you have better decision quality.” Investing in advanced fraud prevention tools may seem costly upfront, but the expense is inevitable. Institutions will either pay on the front end by strengthening their defenses—or on the back end through fines, consent orders, reputational damage, and customer attrition. “We have to stop looking at payments fraud from the point of the transaction,” said Pitt. “That’s the last possible point to prevent fraud. We talk about defense in depth and a layered approach where if some security measure does not catch the fraud, then another one will. We still need to look at the payment itself, but we also need to look at everything before that so that we can catch the fraud earlier.”

ACH is a critical part of the U.S. payment infrastructure, driving a significant portion of transaction volumes and supporting important use cases such as supplier payments, payroll, and many others. Despite competition from newer rails that serve similar purposes, ACH continues to grow at a remarkable pace. In a PaymentsJournal Podcast, Radha Suvarna, Chief Product Officer of Payments at Finastra, and James Wester, Co-Head of Payments at Javelin Strategy & Research, examined why ACH payments have remained so resilient and valuable, and highlighted the benefits for financial institutions considering offering ACH payments to their customers. Old Is New Again When fintech is discussed in the context of modernizing financial services, there is often the assumption that “old” means outdated and “new” means superior. Even though ACH is considered a legacy rail, it’s still highly reliable. It was designed for a specific type of payment: high-volume, predictable transactions that need to be scheduled, such as payroll or bill payments. “One reason ACH continues to grow is because we can do the planning for those predictable payments,” said Wester. “If you can plan for all of that beforehand, it becomes a great rail for handling those types of payments.” A Modern ACH Payments Engine Looking ahead, ACH must become forward compatible alongside other payment rails. Enabling forward compatibility allows the industry to leverage new technologies such as artificial intelligence and integrate them seamlessly with ACH driving improvements in areas such as fraud detection and automation. So what does a modern ACH payments engine look like from an operational perspective? First and foremost, it must be cloud-native and modular. It should leverage modern technologies such as microservices and API-based capabilities to connect seamlessly with both upstream and downstream systems. The platform should also be architected to scale volumes up or down as needed, recognizing that ACH doesn’t necessarily need to run continuously throughout the day and has peaks in volumes. “If we can scale the infrastructure up and down as necessary to drive more efficient total cost of ownership, that would be a significant value add,” said Suvarna. “It would be particularly effective in high volume throughput windows.” Another important component of forward compatibility is the ability to test new use cases and enable fast experimentation. Smart routing between batch payments and real-time payments, for example, could be offered as a value-added service. To determine whether such capabilities create meaningful impact, organizations need platforms that allow quick testing, with the ability to fail fast or scale successful outcomes. Financial institutions can rely on a modern ACH solution to integrate with cloud-native and API-driven systems, enabling faster and more efficient launches for new offerings. It’s also important to note that while the ACH clearing itself has not yet transitioned to ISO 20022, many corporates are already using this for their submissions. A modern ACH platform needs to be able to both handle this, and the eventual migration of the clearing system, seamlessly while accommodating the complex workflows already built around ACH today. Seeking ROI: Cost The ROI from ACH can be viewed through two primary lenses: cost and revenue. On the cost side, the first consideration is infrastructure. Platforms built on open-source technologies and modern software stacks are typically less expensive than legacy systems. The second cost driver is software maintenance and enhancement. As new use cases come up across corporate and retail segments, and as specifications continue to evolve, keeping pace with business-driven and standards-driven changes can be very expensive for legacy platforms. “There are fewer software developers available to code in some of the older technologies like COBOL,” said Suvarna. “Which means there aren’t that many developers around to make the necessary changes for the foreseeable future. The specialized infrastructure roles where you have a person who really knows the system, those obviously become more expensive.” The third cost area is operations. Today, exception handling and returns for ACH are often managed separately from other clearing systems. Consolidating these processes into a unified stack—and leveraging technologies like AI—can streamline operations. “I’m not saying today you can’t deploy AI technologies and machine learning to identify payment repairs, based on the data coming from the legacy ACH capabilities,” said Suvarna. “But the more open modern stack makes it easier and faster.” Seeking ROI: Revenue On the revenue side, the primary opportunity for banks lies in differentiation through an enhanced user experience. Examples include offerings such as smart routing between ACH and real-time payments. A second opportunity comes from innovative use cases, where banks create differentiated value propositions around ACH that set them apart from competing institutions. “When people start talking about ROI, I often hear them talk about revenue first,” said Wester. “But you have to be careful when you talk about system upgrades from a revenue standpoint. To sell it to your leadership, start with the inevitable things that need to be sunsetted and where you can find cost avoidance.” Finding a Partner Financial institutions embarking on this modernization journey need partners with experience across multiple implementation domains. A broad perspective helps identify dependencies, eliminate blind spots, and apply best practices. An experienced vendor understands the optimal path forward, knows where common pitfalls exist, and can guide institutions toward scalable, future-ready solutions. “I like to use the phrase “fish don’t know water is wet,”’ said Wester. “Oftentimes, financial institutions have been running their systems a certain way for so long that they no longer look inefficient, just because they still work. A good partner can come in and say, here are the best practices, here are things where you might be blind to your own issues.” Finastra, for instance, serves both large enterprise and mid-market client segments. They have built out Global PAYplus for large enterprises and Payments to Go for mid-market clients—both delivered on cloud-native platforms supporting modern ACH  clearing. This single, modern payment hub architecture supports multiple clearing types with a common user experience across all rails, and enables forward compatibility, positioning the platform to support future use cases as they emerge. “At the end of the day, ACH isn’t about just technology modernization,” said Suvarna. “It’s a transformation of business processes around very critical infrastructure that serves many corporate and retail customer needs.”

Credit unions have distinct hallmarks: they are not-for-profit and member-owned. Yet amid the flood of financial services companies in today’s digital landscape, these differentiators can be difficult to convey. While many younger consumers are actively seeking the kind of guidance credit unions excel at providing, they often perceive credit unions as just another bank. In a recent PaymentsJournal podcast, Velera’s Tom Pierce, Chief Marketing and Communications Officer, and Carrie Stapp, Vice President of Marketing, along with Brian Riley, Director of Credit and Co-Head of Payments at Javelin Strategy & Research, analyzed two Velera studies—Eye on Payments and CU Growth Outlook—to distill critical insights into how credit unions can reclaim their brands and stand out in a crowded field. From Emerging to Standard Several of the most compelling insights center on how consumers pay. While debit and credit cards have jockeyed for dominance in recent years, usage was nearly evenly split last year. Despite this balance, the two methods tend to serve different purposes. Consumers typically use debit cards for everyday purchases—such as convenience stores, pharmacies and grocery stores—while credit cards are more often reserved for larger purchases at big-box retailers or entertainment venues. Another notable trend is the continued momentum behind digital wallets and contactless payments. Roughly seven in 10 consumers now use a mobile wallet at least a few times per year, and about a third use wallets multiple times per week. “Another key finding is about other areas that have moved from emerging payments into payment standards, including buy now, pay later and P2P payments,” Pierce said. “With BNPL, we’ve got 38% of credit union members saying they would be likely to use that type of program if it was offered by their credit union.” “On the P2P side, three-quarters of consumers say they use these payments at least periodically, and some of the younger generations are using them as a primary payment method,” he said. As Gen Z ages into adulthood, the preferences of younger consumers are coming into sharper focus. When it comes to payments, digital is—unsurprisingly—the default. Still, this makes it even more critical for credit unions to keep digital capabilities top of mind. “It calls out the big trio within payments right now, which are digital wallets, BNPL and contactless cards, and those are very important high-growth areas,” Riley said. “They also appeal to younger generations, which feeds right into the significance of Gen Z. One of the common problems with credit unions is the aging level of their members. Making sure that you’re building the business for decades to come is the reason you want to engage the younger age cohorts.” The Growing Identity Crisis To establish meaningful engagement, organizations must look beyond payments and understand how younger consumers learn about financial services. For Gen Z, guidance frequently comes from non-traditional sources, rather than established FIs. “Social media, for the first time across all of our generations, showed up in the top three as most trusted for financial advice,” Stapp said. “Understanding the role that social media plays, understanding where younger generations are getting their information, and how they’re trusting that information is incredibly important for the financial services industry to understand, absorb and adapt to.” At the same time, younger consumers are experiencing heightened financial stress. Social media can exacerbate this anxiety by encouraging constant comparison, while the growing number of apps, cards and digital payment options can make it difficult to track spending and stick to a budget. Although digital financial management tools exist, many consumers are increasingly looking to their financial institution for support and guidance. Credit unions thrive in delivering this personal touch, yet many younger consumers remain unaware that this lifeline exists. “Only 16% of respondents from the Gen Z category said that credit unions are focused on community, and they equally felt that they were profit-driven,” Stapp said. “They’re not understanding what the basis of a credit union is, and that it’s people helping people. It’s creating an identity crisis and an opportunity for the credit union industry to re-educate, and I would go so far as to say rebrand itself.” The Embedded Opportunities As part of broader rebranding efforts, credit unions have several key opportunities to consider. First, economic uncertainty in recent years has driven strong interest in credit cards, making competitive credit card offerings an important area of focus. “I’ve seen some numbers out there that only about 20% of credit union members have a credit card with their credit union, so there is a lot of white space there,” Pierce said. “This year, we had nearly four in 10 credit members apply for a new credit card in the last year and over 50% of Gen Z said that they would look to apply for one in the next year. So, a lot of growth opportunity is there in the credit card space.” “We also saw nine in 10 folks saying they received real-time approval or denial following application for a credit card, so having that real-time response through origination solutions is critical for engaging that member quickly,” he said. Outside of card offerings, credit unions should also rethink how they engage with members. In the Velera Eye on Payments study, consumers across all generations expressed a strong preference for online interactions, especially for tasks such as paying bills, adjusting card controls or applying for new accounts or products. This digital preference is reshaping traditional definitions of financial solutions. Embedded finance, once understood simply as financial products accessible within a website or app, is rapidly expanding into a more comprehensive and integrated experience. “We’re seeing a lot of the big banks, as well as the fintechs, embedding themselves in the lives of consumers at the point of sale,” Stapp said. “I was buying a birthday card over the weekend and the birthday card aisle had an entire section where you can add a Venmo code inside of the card.” “This is what we’re talking about when we’re talking about embedded. I’m watching Netflix or Amazon Prime and I can buy whatever’s on that ad right there from my phone or from my TV,” she said. “The definition of embedded goes further than just, ‘Can I access a product or service on a website or my mobile app?’ That’s important to understand, on top of understanding how they’re preferring to pay.” Bringing Members Along These shifts in expectations and technology underscore the need for credit unions to revisit the overall member journey and experience. “What is it that we’re creating that makes their lives easier?” Stapp said. “We now have to meet them where they are instead of them coming to us for a product or solution. When you’re thinking through your digital strategy, when you’re thinking through the products and solutions that you are going to invest in for your financial institution, map out that digital strategy and  experience that your member is going to get with the lens of, ‘Is this enticing to all of the generations, particularly those generations where I’m going to get my growth?’” As they develop this roadmap, financial institutions must also plan for fraud, which is increasing in both scale and sophistication. Instead of relying on physical tactics like gas pump skimmers, bad actors now deploy advanced impersonation scams to trick consumers into sharing personal data or sending money. Artificial intelligence has made these fraud attempts more effective, but it also offers powerful tools for detection and prevention. Equally important, consumers themselves are embracing AI. Velera’s Eye on Payments report found that one in three consumers uses AI several times per week, and over half use it for financial planning or budgeting. While shifting preferences, emerging threats and rapidly evolving technologies present challenges, they also create significant opportunities. “From an innovation perspective, account card origination is a critical investment area,” Pierce said. “Making sure your members are protected from the evolving fraud and then laying the future for AI are all great areas of focus for investments. On this innovation journey, credit unions have a wonderful opportunity to bring their members along.” “In Eye on Payments, 85% of respondents—especially the younger generation—said that they would trust their credit union for financial and innovation-related advice,” he said. “As these innovations are coming to market, bringing your members along and being a trusted advisor is key to your success.”

Scams have become universal, affecting all types of consumers and every kind of organization. This has placed tremendous pressure on financial services firms, which often bear the brunt of the financial losses, to develop strong fraud prevention strategies to protect their customers. In a recent PaymentsJournal podcast, Raj Dasgupta, Vice President of Product Marketing at BioCatch, and Suzanne Sando, Lead Fraud Analyst at Javelin Strategy & Research, discussed the evolving forms of scams, the varying global approaches to fraud prevention, and how financial institutions can develop a blueprint to combat these threats. Inundated at Every Turn One of the most impactful trends in recent years is that cybercriminals can now more accurately target their victims. For example, someone interested in investing may receive messages about cryptocurrency scams, while a job seeker might be targeted with fake job offers. Even with this precision targeting, cybercriminals continue to cast a wide net. “The target for these kinds of scams could be just about anybody,” Dasgupta said. “Usually, we are led to think that they would have been elderly people who are less tech savvy or who can be gullible, but not quite. It could have been anybody. What we are seeing romance scam-wise is it’s skewed towards the elderly. The scammers target lonely individuals who are looking to get into a relationship.” “Or it could be an investment scam where it can target practically anybody, mostly the elderly, but then the younger demographic is also not immune to those kinds of scams,” he said. “If you are less averse to financial risk, you might end up investing in cryptocurrency  in the hope of great returns, ultimately to realize that you’ve been scammed.” These diverse scam variants are driving a widespread problem. In a recent survey conducted by BioCatch, respondents reported a 65% year-over-year increase in the total number of scams between 2024 and 2025. This included a 14% rise in purchase scams, the most common type worldwide. Phishing scams via both voice and texting— oftenknown as smishing—also increased last year, along with significant upticks in romance and investment scams. The lone bright spot in the study was a 15% decrease in impersonation scams, where criminals pose as legitimate agencies. This decline is likely due to increased awareness and more effective controls implemented by organizations. “We saw minuscule drops in scam losses in the number of affected victims, but it’s not enough to throw the confetti and pop the champagne,” Sando said. “We’re still talking about a $20 billion problem for scams across 22 million victims, according to Javelin data. Scams feel so prevalent at this point. It feels like we can’t trust anybody or anything—we can’t trust any text that comes in, or emails, DMs, or social media.” “Everything that we get is met with this air of distrust, and from a consumer perspective, rightfully so,” she said. “We’re inundated with these messages all the time, at every single turn. I don’t feel like I can trust that this voicemail that I got from my mom is really from my mom.” A Changing Answer In addition to rising volumes, scam messages have become more convincing and harder to detect. A major driver of this trend is new technology, particularly artificial intelligence. “There are AI technologies which are easily adoptable, like writing out a grammatically correct email or a text message and making it look  very real,” Dasgupta said. “Those are easily accessible technologies. Now it’s hard for our customers to detect if a victim was in fact receiving an email or a text which was constructed by  AI.” “The more sophisticated forms are not happening at scale so we can’t call them mainstream just yet, but that is not to say that things can’t change in about six months, because this is a space which is moving very fast,” he said. “Technology itself is changing very fast. I wouldn’t be surprised if I have to give you a different answer six months from now.” AI has also enabled the creation of highly realistic deepfake audio and video. For example, a deep fake audio clip could be used in a call to convince someone that a family member is in distress and needs urgent help. As retailers deploy AI in the shopping experience, such as through agentic commerce, cybercriminals are finding ways to exploit this technology. For instance, they could create counterfeit agent services or attempt to manipulate AI agents themselves. Unfortunately, these examples represent just a few of the many ways cybercriminals are leveraging AI for scams. “We have not seen all that AI is capable of at this point,” Sando said. “That can go for how it can help financial institutions better mitigate scams, but it also stands true for criminals. They aren’t bound by regulatory bodies or compliance or governance teams or data privacy restrictions.” “They can do whatever they want, so they can move a lot faster and more freely in adopting AI,” she said. “They’re more agile and they can do what they need to get it to fit their needs for their schemes.” Not Just a Fraud Problem The scale and sophistication of scams have imposed both direct and indirect costs on financial institutions. These include authorized losses, where customers are manipulated into approving transactions, and unauthorized losses, such as account takeovers or stolen cards. Unfortunately, the impact of scams extends far beyond immediate financial losses. They can cause operational strain and reputational damage. “Something that is not immediately apparent is that victims can leave the bank, so there is a real cost of attrition and related is the cost of acquisition,” Dasgupta said. “When one customer leaves, to get another customer to have the same level of profitability, your acquisition cost may be double what you normally have to acquire new customers.” “Bear in mind also when the customers are leaving, in a lot of cases they’re seniors and they’ve had their life savings with the financial institution,” he said. “When they choose to leave, they’re leaving with all that money, so it’s a big deposit loss. It impacts the overall portfolio.” In addition to driving customer attrition, scams consume substantial resources. Many institutions rely on staff to investigate incidents, and these teams are often quickly overwhelmed by the sheer volume of cases. What’s more, the increasing effectiveness of scams has led to a rise in authorized losses, and the resources required to investigate and respond to these incidents are often substantial. “All the associated costs mean that the profitability of your deposit portfolio is taking a hit,” Dasgupta said. “It’s not only the reimbursement losses, but everything else: investigative effort, regulatory exposure, regulatory requirements, compliance requirements, legal exposure, deposit loss, acquisition costs of new customers, and the profitability of the deposit base.” “All of those things have to be taken into consideration when thinking of scams as a problem rather than just a fraud problem,” he said. Getting It Right Due to this combination of factors, scams have become a global scourge. However, some regions have made strides in developing effective scam prevention mechanisms. “Two countries are top of mind when it comes to getting it right,” Dasgupta said. “One is Australia, and I would give a shout out to Australia because they’re not doing it because of regulatory pressure, but they’re doing it because they feel like they need to protect their customers. They’ve taken a variety of actions—be it technology related, be it process related—to make sure that their end users are not going to be victims of scams and lose money.” “The UK is a bit different than Australia because there is regulation that came into effect not too long ago, where the losses will have to be divided out between the sending bank and the receiving bank so that the victim who’s a customer of one of those banks is not left holding the bag,” he said. “That’s a step forward.” Conversely, the U.S. has lagged behind in this area. One reason is the sheer number of financial institutions operating in the United States; another is the country’s more market-driven regulatory approach. While some leading U.S. banks have invested in scam prevention, significant progress remains to be made. The strategies adopted by other countries can provide useful guidance, but U.S. institutions will ultimately need to forge their own path. “The important part to me is not taking exactly what some other country is doing and doing a copy-paste into the U.S.,” Sando said. “We know that’s not going to work. Everybody has their own regulations and things that are going to work for them. It’s about taking what strides other countries have taken, figuring out what’s feasible for the U.S. and taking action on that.” “That is where I feel like we’re missing the boat,” she said. “We’re missing the take-action part in a big way. We’ve got a lot of good things going for us. We’ve got task forces and scam groups that are popping up that are sharing critical information and encouraging more industry-level information sharing. That’s a huge step forward. We now have to get to the point where we’re taking concrete action to stop those scams.” Combating the Typologies The most impactful action financial institutions can take is to acknowledge the scam threat and begin developing proactive solutions. Given the unlikelihood of regulatory mandate on scam prevention in the near term, organizations will need to lay the groundwork themselves. Although this is a significant undertaking, the first step is to develop a dedicated strategy to mitigate the devasting impacts of scams. Then, it’s time to act. “If they don’t act, they will be at a loss,” Dasgupta said. “Scams cannot happen if there is no mule account where the scam proceeds can be deposited. They’re all interlinked and at the end of the day the more accounts

Every year, billions of dollars vanish at the final step of online shopping, not because consumers change their minds, but because of hurdles within the checkout experience. Despite decades of innovation in payments technology, many shoppers still walk away when checkout feels slow or overly complex, costing businesses an estimated $260 billion annually. The answer may lie in the growing influence of developers as companies build embedded payment platforms. In a PaymentsJournal Podcast, Bryan Long, Senior Director of Product Management at North, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed how developers are driving innovation—and actively solving checkout challenges—for online retailers. Managing Friction Today’s e-commerce ecosystem reveals a widening gap between shoppers and merchants. Consumers expect a seamless experience: fast product discovery, strong brand trust, and checkout convenience features like one-click checkout, intelligent form filling, and address autocomplete. Meanwhile, merchants and the independent software vendors (ISVs) that power point-of-sale systems need data access and security, without sacrificing conversation rates. “Address autocomplete or one-click payment buttons are not just conveniences for merchants,” said Long. “I think of them as friction management. Every extra field that a user has to fill out lowers conversion and results in decreased sales.” Some platforms attempt to bridge this gap with guest checkout solutions. Shopify, for example, allows customers to complete purchases in a single click using stored credentials. While convenient, this approach can limit a retailer’s ability to collect customer data such as email addresses and shipping details. Additionally, redirecting shoppers to a third-party payment gateway—often with a different URL—can undermine brand trust and introduce friction at the most critical moment of the purchase journey. “For me, it sets off all these subconscious alarm bells. Is data security an issue here? It feels like the page has been taken over by hackers,” Long said. “As a product person, it’s really bad product design especially when a shopper is about to divulge their most personal data.” The Benefits of Embedded Payments Embedded payments provide a more comprehensive solution. They allow businesses to own the checkout experience, keeping customers on the merchant’s site through the transaction while delivering a fully branded, customizable flow. The result is lower churn, higher conversion rates, and increased revenue. By enabling one-click checkout and supporting popular wallets like Apple Pay and Google Pay, embedded payments reduce cart abandonment. Features such as address autocomplete and intuitive form design further streamline data entry, cutting down checkout time and customer frustration. “The tech has evolved so much just in the last couple of years to meet all those points that reduce the friction, protect the data, and deliver that stellar user experience,” said Apgar. “But the fact of the matter is most merchants, when they spool up their e-commerce site and pick a payments provider, they implement the tech that’s available and never revisit it. Many sites are using outdated technology simply because that was the best that they could find at the time.” As cart abandonment rates remain stubbornly high, businesses are reevaluating legacy payment processors and increasingly opting for fintech-driven solutions. While switching costs exist, many organizations are finding the integration effort well worth the payoff. Developers as Decision Makers Over the past five to seven years, another major shift has reshaped the payments landscape: developers have become key decision makers. If a product introduces too much friction—whether in APIs, documentations, or integration complexity—developers will simply abandon it and advise business owners to do the same. “What we’re really seeing is developers having become first-class citizens,” Long said. “It’s an add-on, self-service for developers is sales. In 2026, a salesperson is often times not your first point of contact—the API documentation is.” “That’s why we build product functionality for developers,” he said. “Providing a unified sandbox that mirrors production allows developers to test end-to-end in system integration without having to wait for a sales call. Giving developers access to API logs and code samples also improves the integration experience and cuts down on the time to integrate, which is faster speed to revenue.” When embedded payment strategies are paired with well-architected, API-first platforms, partner integration timelines can shrink from months to weeks. This cycle builds trust with developers and improves brand credibility. At the end of the day, developer experience is not just about having polished documentation—it’s a revenue engine. “I’m seeing more specific solutions as opposed to just building a SaaS product for one industry now,” said Long. “It’s getting more verticalized and specific to merchants, individual use cases and needs. Finding a solution to help drive your business is becoming easier, and that’s all due to the rise of the developer as a decision maker.” The Rise of Agentic Commerce That focus on developer experience is now colliding with an even bigger shift—software is no longer built solely for humans to operate. Increasingly, it’s being built for other software to reason over, act on, and transact with autonomously. As AI systems move from passive tools to active decision-makers, the same API-first principles that won over developers are becoming foundational for a new class of users—AI agents. One of the most transformative trends in payments today is agentic commerce, where AI agents handle every stage of the transaction. Research suggests that within the next few years, more digital commerce transactions will be initiated by AI bots rather than humans. This shift makes API-first embedded payments not just an advantage, but a requirement for survival. In an agentic commerce environment, checkout flows must be readable and executable by machines, not just optimized for human users. Merchants must deliver streamlined experiences while also ensuring their systems are discoverable, secure, and transactable by AI. “It’s a complex landscape and it’s getting more complex as the tech advances,” Apgar said. “Merchants really need to find a payments partner with a strong catalog of payment options that’s well organized and deliverable in a seamless fashion. The developer is now a first-class citizen, not a support ticket.” Long added: “In the end, payments should not just be thought of as a destination that the customer travels to. It should be a seamless layer of the experience that the shopper is having. So whether the shopper is a person on the web or it’s an AI agent in the cloud, the goal is still the same, which is zero friction between purchase intent and ownership.”

The past holiday season didn’t just test consumer wallets—it revealed how dramatically shopping behavior is evolving. As inflation-weary shoppers searched for flexibility, value, and convenience, gift cards emerged as a central tool in how consumers planned, budgeted, and ultimately gifted. From promotion hunting to increased reliance on AI, the behaviors that defined the season are poised to shape retail for years to come. In a recent PaymentsJournal podcast, Sarah Kositzke, Director of Research at Blackhawk Network (BHN) and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research discussed the accuracy of holiday shopping predictions, evolving consumer gift card habits, and how brands, retailers, and issuers can prepare for a dynamic year ahead. Navigating Affordability Through Promotions One of the most closely scrutinized aspects of the season was how consumers—under sustained pressure from inflation would approach holiday gifting. While BHN’s post-holiday research indicates that budgets were largely flat year-over-year, shoppers adopted new approaches to strategies to stretch their spending. “This past holiday, we saw about 90% of people—that’s nearly everyone—leveraging some sort of a promotion, whether it was buy-one-get-ones or percentages off of certain products, or even gift cards,” Kositzke said. “I feel like a lot of people started earlier. They were looking for those deals, that’s what was a motivating factor for starting earlier.” “One of the most interesting things, which we nodded to in pre-holiday work that we had done, is we said: ‘I think folks who start earlier in the season also have a larger budget for gifting.’ And we found that to be true, it was nearly double those who started later,” she said. “Factor in all the promotions, factor in looking for those deals—even if it was starting in October—that’s where we saw the crux of people finding that momentum to get out there and shop.” This focus on finding discounts further entrenched Black Friday as the official kickoff to the holiday season. BHN found that 31% of respondents identified Black Friday as the leading promotional period, beating out Cyber Monday. At the same time, more shoppers bought fewer gifts this holiday season. This shift was driven partly by economic concerns and partly by how consumers are prioritizing and managing their many gifting and holiday obligations. “Gift exchanges are fascinating because, anecdotally, I see it happening a lot,” Hirschfield said. “We’ve put COVID behind us and now it’s like, let’s just get together, but let’s do it in a way that’s fun and interesting, And instead of spending $10 on everyone, you’re amplifying that budget into one item, but you’re doing it in a fun and social way.” A Haven for Last-Minute Shoppers Even though more consumers started shopping earlier, many stretched their budgets to the very end of the season. Nearly three-quarters of respondents purchased digital gift cards as a last-minute gift on Christmas Eve or Christmas Day. “They really became a safe haven this holiday season,” Kositzke said. “We saw this last year and we predicted that this would be the case, but digital was such a key factor. We saw 80% of people purchase a digital card for that specific occasion.” “Whether it’s, ‘Oh, no, I got to the event and I thought nobody was buying gifts, now suddenly everybody bought a gift and I’m feeling left out’ or ‘I missed somebody’ or ‘I’m suddenly going have a night out or a dinner with somebody and I want to be thoughtful and get them something,’ we saw an incredible amount of shift to those digital cards,” she said. For retailers and brands, this trend heightens the importance of a strong digital gift card offering. Retailers should also promote digital gift cards heavily through Christmas Eve to capture last-minute shoppers. While digital gift cards served as a lifeline for last-minute gifting, they can play a much larger role in merchants’ overall gift card strategies. “For a long time, people said digital will replace physical, and I don’t believe that’s true,” Hirschfield said. “Timing is a key factor of why those choices are made. People may prefer to give a physical gift because they want that tactile experience that includes unwrapping something, and you can do that with a physical gift card.” “But when time gets short or when distance is a factor, digital becomes the gift of choice,” he said. “It fills a need when you can’t be there in person or they’ve just run out at the store, or you can’t get to the store. We also see that impacts the value of these cards. From 2024 to 2025, physical card loads on average went up $11; digital went up $15. When you don’t have to package it, mail it, and all those costs involved, you can say ‘I can spend $4 or $5 more.’” In addition to the shift toward digital, the value loaded onto both physical and digital gift cards continues to rise. The average total gift card value reached $236 last year, up from $209 in 2024. Beyond this initial spend, gift cards also present a meaningful opportunity for merchants once they reach the recipient. “What’s interesting is the fact that then I’m going to take that card and I’m going to overspend at the place of purchase, whether it’s a restaurant, whether it’s a store, or whether it’s a service I’m getting done,” Kositzke said. “On average, people spent about $108 over the value of the cards that they received.” “And people on average—so this has stayed the same—have received about three cards,” she said. “We’re not seeing a huge shift in the number of cards, which means the value of each is going up.” Generational Gaps in Loyalty and AI In addition to spending trends, one of the most closely watched aspects of this shopping season was the impact of artificial intelligence. While overall AI usage increased among all consumers, a growing generational divide is emerging: nearly three-quarters of younger consumers used AI for holiday shopping, compared to roughly 31% of older consumers. What’s more, the number of Gen Z and millennial consumers using AI grew 8% year-over-year, compared to just 1% for Gen X and Baby Boomer shoppers. This overall rise in AI adoption is likely to have lasting effects. “We saw a lot of people using it for looking for promotions, they’re looking for the best cost, or they’re looking to try to figure out the most creative gift ideas,” Kositzke said. “Especially if it’s somebody who they’ve been gifting to a long time and they just need some new fruitful ideas of, ‘What could I bring?’” Understanding this growing preference for digital and AI-driven solutions is critical for merchants and gift card issuers seeking to develop deeper engagement with the new generation of consumers. In addition to AI integration, younger consumers are increasing motivated by rewards and are willing to adjust their shopping behaviors to maximize value. “The loyalty era is here,” Kositzke said. “People are looking to exchange any points that they have, wherever those programs might be for gifts. We found that younger consumers, about three-quarters, exchanged loyalty points for gifts, compared to 57% of older consumers.” “What kind of gift did they exchange it for?” she said. “Almost half exchanged for gift cards, some exchanged for physical gifts, and about 10% exchanged for some sort of experience. So, loyalty points and programs can provide the gamut of what people are looking for, especially dependent upon who that end recipient is. It’s important to add these programs into any sort of messaging or ties that you have.” Diversifying Marketing Channels Another important consideration for merchants is the evolving array of channels through which consumers seek guidance and make purchases. “Those traditional channels—whether it’s emails, word of mouth, maybe it’s a print in-store flyer—those are all still heavily leveraged,” Kositzke said. “However, we find that they’re more so leveraged by older generations. Nearly two-thirds are seeking those sources compared to only maybe about half of younger shoppers.” “Younger people are looking for these promotional deals across their Cash Apps, any sort of shopping discount channels that they might be on,” she said. “There are some programs out there where you can input information about your purchases and you’re then earning power there as well, which goes back to that whole points and exchange for gift cards as part of a program.” This diversity of channels makes it essential for merchants to diversify their marketing and promotional strategies. For example, retailers should expand their approach to include price comparison tools like Google Shopping and deal forums like Slickdeals and Reddit. To stay relevant, merchants must also continually reevaluate the impact of social media channels. “TikTok Shop is really driving purchases,” Hirschfield said. “In my N=1 study of my Gen Z daughter, the number of times I hear her mention TikTok Shop purchases for her or her friends, it’s really one of their main sources of purchases. My daughter is a freshman in college, there are 400 young women living in her dorm, and I guarantee you that she is not alone.” “These are significant populations of people who are using things like TikTok Shop rather than a traditional retail outlet,” he said. “So, utilizing TikTok and things like that where these younger generations are gathering to be influenced to find deals, it’s a meaningful driver of business and you have to be hyper-aware of what’s next—beyond what you might be comfortable with for the people who are making these business decisions.” Watching Your Consumer In addition to these impactful consumer trends, gift cards remain a dominant choice. Last year, roughly 65% of employees received a gift from their employer, and nearly nine out of 10 of these gifts were gift cards. This highlights the increasing prevalence of gift cards—not just during the holidays. Leveraging promotions, integrating AI

In just eight years, Zelle has revolutionized the way people send money. And the best is yet to come—peer-to-peer payments are expanding to small businesses and cross-border transactions, opening up a world of new possibilities.  In a PaymentsJournal Podcast, Tina Shirley, Senior Director of Product for Fiserv, and Brian Riley, Co-Head of Payments at Javelin Strategy & Research, discussed how Zelle has become a prominent part of the U.S. financial landscape and how it’s positioned for even greater growth. A Strong Growth Story The numbers for Zelle tell an impressive story. In the first half of 2025, it processed a record 2 billion transactions—a 19% increase over the same period in 2024—totaling nearly $600 billion. As a primary processing partner for Zelle, Fiserv is responsible for more than two-thirds of that volume. This growth underscores the trust people place in Zelle. In less than a decade, users have become comfortable enough with this payment method to rely on it daily, across a variety of use cases and for substantial sums.  “We see larger dollar amount transactions in Zelle as compared to other P2P applications,” said Shirley. “That shows that people are really comfortable with using Zelle through their financial institution.” Real-Time Payments Driving B2B Growth One area where Zelle still has plenty of room to grow is in the B2B space, where real-time money movement capabilities have become critical. Small businesses, in particular, represent the fastest-growing segment across the network, with more than 7 million accounts now enrolled. These users increasingly expect that transactions can be completed instantly, especially when it comes to moving money. “There’s been some pent-up demand for small businesses to be able to onboard to the network so that they can pay—and probably more importantly get paid—instantly using Zelle,” said Shirley. “We’ve seen stats that there’s been 31% growth in consumer-to-business payments just through Q2 of this year. So there’s already been a lot of growth in that space.” Strong demand on the consumer side is further fueling this expectation. “Something that’s important to me as a consumer is that I’ve used Zelle for many years myself to pay local vendors like the pool guy and the garden guy,” said Riley. “Something I never liked about it is that I have a business relationship with them, and I prefer to deal with it through a business account, so moving into that arena is significant.” FIs Embrace Zelle Zelle discontinued its standalone app a year ago, encouraging users to access the payment platform exclusively through their banking apps and websites. As a result, users increasingly associate the service with their own financial institution. “When consumers were notified that the common app would be going away, I can only imagine that they were calling their financial institutions and asking when they could access Zelle through their mobile banking app,” said Shirley. “Or they were finding another financial institution who offered Zelle and transitioned to that. “We have definitely seen an uptick in financial institutions recognizing that they need to offer Zelle to satisfy their customers or members—especially in the community financial institution segment,” she said. “More of the smaller community-based financial institutions are looking for that option to bring Zelle to their consumers.” Fiserv’s research has found that Zelle is a strong indicator of a primary financial institution relationship, regardless of whether the bank is large or small. The platform has also helped level the playing field between large and smaller institutions. “My wife and I use a community bank by selection,” said Riley. “It’s not a big institution, but it will transact just like a large bank would. Across the network, the overall experience that consumers and small business have access to is the same, regardless of the size of the institution. It’s an equalizer in a way.” The Future of Zelle Zelle’s capabilities open the door to several new opportunities in the payments landscape. One of the most promising areas is bill pay, where the simplicity of Zelle could provide a clear advantage. “If we look broader about the payments capabilities in general, we start to streamline the money movement capability and integrate it in other contexts,” said Shirley. “We’re looking at things like offering Zelle as a payment option within the bill pay mode. Say I am paying a small business or my monthly bills and I realize I also need to pay my daycare provider and my lawn service. Why not do it in context of that bill pay from that same place?” Another exciting frontier for Zelle is stablecoins, which could enable cross-border payments by minimizing friction between different currencies. Fiserv recently launched its own stablecoin to unlock additional money movement use cases for consumers and businesses, both domestically and internationally. Zelle is reportedly exploring similar initiatives. These use cases are likely to expand further as the global economy becomes more interconnected. Wherever Zelle goes next, it will already have the trust of financial institutions, having demonstrated the reliability and security of its model. “When you get into the trust factor, this is a very bank-centric model and you’re going bank to bank on these transactions through Fiserv and the vendors that do the clearance,” said Riley. “That’s a significant area for confidence.” Shirley added: “At our recent client conference, I had a session to talk about what’s on the horizon for Zelle. I started by asking for a show of hands (from those) who already have Zelle—it was only about half. When I’ve done these sessions in the past, it was mostly existing clients who already had Zelle who wanted to hear what was coming. But there was a lot of interest in seeing what’s (ahead), especially from those who have not yet brought Zelle into their mobile banking app. We’re really seeing that interest grow.”

Paying a supplier is a fundamental function for businesses, yet it’s often encumbered by a complex billing cycle. When the supplier is in a different jurisdiction, this complexity skyrockets, forcing organizations to navigate foreign exchange rates, bank intermediaries, local regulations, and opaque fees—all with limited visibility into where a payment is and when it will settle. By contrast, stablecoin payments are immediate, transparent, and less expensive. Designed to maintain a consistent value and typically backed by U.S. dollar reserves, they combine the reliability enterprises expect from traditional currencies with the speed and transparency of digital payment rails. In a recent PaymentsJournal podcast, Avinash Chidambaram, Founder and CEO of Cybrid, and James Wester, Director of Cryptocurrency and Co-Head of Payments at Javelin Strategy & Research, discussed B2B use cases for stablecoins and the future of this dynamic digital asset in enterprise payments. No Longer the Wild West One of the most important factors driving stablecoin adoption is increasing global regulatory clarity. In the United States, the GENIUS Act governing stablecoins marked a milestone moment, dramatically shifting how banks, B2B payments platforms, and remittance providers view digital assets. Although regulatory approaches vary by region, the underlying value proposition of stablecoins remains unchanged. Their reserve-backed structure provides organizations with the green light to move forward. “Globally, you’re starting to see this shift towards enabling businesses and retail customers to start using stablecoins as back-end infrastructure at the very least,” Chidambaram said. “The fact that it’s a stable crypto asset gives CFOs, treasury departments, and even regular retail customers a clear understanding of what the value of that token is.” “For example, it’s basically a U.S. dollar when I’m sending a stablecoin overseas and it’s being converted into a Hong Kong dollar,” he said. “Now, you’re accepting the benefits of the blockchain and tokenization systems to affect very meaningful use cases and experiences for your customers.” The combination of these benefits and improving regulatory clarity has rapidly shifted many financial institutions’ attitudes toward digital assets. Early adopters who recognized the potential of stablecoins and anticipated a more amenable regulatory environment are now prepared to reap the rewards of their foresight. “There was a perception for a period of time that the larger field of crypto was kind of like the wild, wild west,” Wester said. “Yet, there have been companies over the last many years that saw the value of crypto, digital assets, stablecoins, blockchain, and tokenized assets—and were begging for regulatory clarity. They were saying that there’s an efficiency gain here; there are cost reductions.” “What’s so surprising is how willing and able companies in the space were to say, ‘Now that there’s clarity, we’re happy to look at compliance; we are happy to look at regulation; we are happy to look at governance—because we were always willing to do that,” he said. Unlocking the 24/7 Cycle As more organizations consider stablecoins, the promise of the technology has become clear—especially in B2B payments. Built around 30-, 60-, and 90-day payment cycles largely designed to accommodate paper checks, traditional B2B payment infrastructure is ripe for disruption, and stablecoins are proving to be a game changer. In cross-border payments, businesses have often been limited to sending suppliers a wire confirmation as proof of payment, despite being unable to guarantee when the transaction would actually settle. These challenges are mitigated with stablecoins. “Now, I can say: ‘From my blockchain wallet, I’ve sent you a payment that happens to run over stablecoins, and I can see on the blockchain that you received it,’” Chidambaram said. “By the way, both parties on either side of that transaction have been KYB checked—we know who they are. There are much lower transaction costs because there’s not a bunch of folks in the middle who are taking their pound of flesh, and lower FX costs.” “The other thing is, you can now source stablecoins 24/7, 365,” he said. “It all runs on a blockchain. Minting stablecoins doesn’t stop at 5 p.m. If you are buying goods from another jurisdiction, you don’t have to worry about, ‘When does that bank open up over there? Did they receive the funds or not?’ You can start to operate your business on the 24/7 cycle.” In addition, organizations can attach data to stablecoin payments, improving reconciliation, accuracy, and confidence in supply orders. This, in turn, delivers meaningful operational benefits across procurement and supply chain functions. Stablecoins also enable more effective treasury management. Organizations can retain cash within the business for longer, paying for goods and services precisely when needed. “I heard a statement a couple of months ago, and it drove home the benefit of this type of granularity on being able to send money, and that was: ‘Real-time payments don’t matter because I want to pay somebody tomorrow and know that they’re getting paid immediately tomorrow,’” Wester said. “I know that they don’t need to get paid for 30 days. I want to pay them on day 29 and hold my money as long as I possibly can.” “It flipped the way that I was thinking about it because when you think about real-time payments, it’s, ‘I need to pay somebody immediately,’” he said. “No, I need the ability to pay them immediately, but I want to be able to have that flexibility and manage my money. If it’s 30 days, I want to be able to send it as late as I possibly can.” The Programmable Value This programmability of stablecoins is one of their most impactful features. It enables businesses to automate many payment processes that are currently manual and time-consuming, while also unlocking more sophisticated use cases. “Some of our customers use us to onboard to investment products,” Chidambaram said. “Take a real estate inverse investment product for commercial real estate for example. You can raise money quickly in the sense that you have an investment opportunity, people can fund that investment using stablecoins from anywhere around the world using a Reg A, Reg D, or Reg S kind of structure.” “There are also disbursements,” he said. “You can programmatically fund the investment and once the investment has been completed, you can programmatically fund the disbursements. You think about all the higher value stuff that we usually need a lot of people and operations to do, but now you’re able to program that into the token.” While there are significant use cases for stablecoins, many organizations have been hesitant to adopt digital assets. However, companies don’t need to understand the intricacies of blockchain, cryptocurrencies, or tokenization to benefit from stablecoins. Payment providers have developed back-end infrastructure that manages every aspect of stablecoin transactions, allowing businesses to leverage the technology without added complexity. “I’ve laughed a couple of times in the past when people talk about stablecoin payments versus other payments as though there is going to be some sort of a qualitative difference from the experience standpoint,” Wester said. “Your company doesn’t have to be an expert in ERP solutions, you just use the ERP solution,” he said. “The same thing is going to apply once we start moving over to stablecoins. They’re going to start recognizing the benefit of faster, cheaper, programmatic money movement. It’s not going to require anything other than that.” The Lumpy Path to Adoption Although momentum behind stablecoins is building, broader adoption in payments still faces obstacles. “I would love to say it’s going to be a straight line towards adoption, but I do think that it’s going to be a lumpy evolution,” Wester said. “There are still some things that need development, such as the user experience part and where stablecoins and digital assets fit within ERP solutions, banking solutions, and middle- and back-office solutions.” “I would love to say it’s a rocket ship to the moon and in a year’s time, everybody will be adopting it, but it will take some time,” he said. “The next year is going to be interesting in terms of where we start seeing real development.” While there may not be sweeping adoption this year, stablecoins are likely to continue gaining traction. As a result, businesses should begin strategizing how to incorporate stablecoins—alongside an ever-increasing number of payment types—into their operations. One of the most effective ways to leverage stablecoins is through a payments orchestration platform, which routes transactions through the optimal payment type. “As more people start to support their flavor of stablecoins, you’re going to start seeing organizations using platforms like us to say, ‘Here’s how I want to orchestrate a payment,’ and more of the value of cross-border payments will move onto stablecoins,” Chidambaram said. “We’re feeling very excited about the opportunity over the next few years, as more companies understand what a stablecoin is and how it’s helping them meet an objective faster, cheaper, and with more control over their treasury,” he said. “More companies are going to start to embed infrastructure like ours to provide those back-office improvements in experience to their end customers.”

Amid the rapid transformation of the payments industry, merchants have leveraged multiple acquirers to navigate new payment types, regulations, and consumer expectations. For example, operating across regions like the European Union often requires merchants to work with multiple acquirers to navigate the unique regulatory, payment, and consumer nuances of all 27 countries. Increasingly, however, multi-acquiring is no longer just a European necessity. Many U.S.-based companies have embraced this model to support transactions across e-commerce, in-store, and mobile apps.  Tier 1 US merchants are doing business across Europe, with many doing business worldwide, running into the same requirements as their EU based counterparts. Against this backdrop, ACI Worldwide conducted a study of more than 100 Tier 1 merchants with over $500 million in annual revenue. Roughly half of these merchants primarily operate in North America, with the remainder based in Europe. In a recent PaymentsJournal podcast, Dan Coates, Product Management Director at ACI Worldwide, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, discussed the study’s most compelling findings—highlighting the tangible impact on merchant performance and the growing role of payments orchestration as a core operational capability to reduce complexity and unify analytics for more informed decision making. Acquiring By Default The single-acquirer model is quickly becoming a relic of the past. Today, nearly 97% of enterprise merchants operate with multiple acquirers. However, this shift is often driven by necessity, rather than intentional strategy. “While I think there’s a desire to have a single acquirer, in many cases they end up that way by default,” Coates said. “In North America, there’s also a view that by using multiple providers—not necessarily card acquirers—that they are multi-acquirer as well. They’ve got a different private-label credit card provider, a different gift card provider, they’re leveraging a gift card mall and all those things. I think those are the fundamentals contributing to that 97% number.” Merchants are responding to consumer expectations for higher authorization rates, broader payment method support, and uninterrupted transactions. Still, the upside is hard to ignore. ACI found that four in 10 respondents experienced an average acceptance rate lift of approximately 1%, while nearly two-thirds reported cost reductions of at least 2%. At enterprise scale, even modest percentage gains can translate into significant revenue and margin improvements. These bottom-line benefits help explain why the remaining minority of single-acquirer merchants is shrinking—and why multi-acquiring, supported by orchestration, is fast becoming the standard rather than the exception. “It’s been an interesting evolution to watch as enterprise merchants expand their acquiring relationships past a single acquirer,” Apgar said. “That was always the standard—to have one simple, straightforward acquiring relationship. But I think merchants have grown in ways that a single-acquirer could no longer support. Everybody’s got their own product road map, and by necessity it forced a lot of enterprise merchants to seek alternative relationships to fill gaps in their payment stack.” The Relevance of the Results Merchants are increasingly diversifying their payment strategies, often driven by the desire to support local or alternative payment methods. This includes dominant domestic real-time payment systems like UPI in India or Pix in Brazil. Adding another acquirer can also be necessary for tapping into widely adopted digital wallets like Venmo or PayPal, giving merchants access to a broader customer base. “We need to look at these results because it may reveal something about how you’re using multi-acquiring that may not align, or maybe a different view in the world as to how others are using multi-acquiring,” Coates said. “We have to look at this from the bottom line: How do I increase revenue? How do I reduce costs? How do I defend myself against chargebacks?” Multi-acquiring strategies give merchants a real-time lens on the payments landscape. By comparing acquirers and pivoting between them, businesses can secure the most competitive rates. “Merchants, especially at the enterprise level, famously want to compare notes and understand who’s doing it better than they are, who’s doing it less expensively than they are, and who’s getting more results out of a certain process,” Apgar said. “But market rate is dependent on the application and the use case.” “Merchants love to say, ‘How come he’s paying less than I am?’” he said. “But the reality is the use case is never identical, there’s always extenuating factors about the application and the requirements that drive costs.” Shaping the Acquiring Strategies Several factors shape a merchant’s acquiring strategy. For example, businesses with both brick-and-mortar stores and e-commerce platforms often navigate different rate structures across channels. The merchant’s industry also matters: grocers and department stores usually benefit from lower rates, while high-risk sectors—like gaming—face higher costs. The proliferation of payment types is further redefining strategy. According to ACI, merchants prioritized which payments methods they most want their acquirers to support, with digital wallets topping the list. “When you look at a wallet, it’s a container for other payment types, typically cards,” Coates said. “Wallets help things because they maintain and manage those cards. You can’t put an expired card into a wallet. If the card expires while it’s in the wallet, the wallet’s going to yell at you and say, ‘Hey, your card expired, you can’t use this anymore.’” “If the card gets lost or stolen, all of a sudden we’re getting responses from the wallet that there is an issue with the card,” he said. “Card approvals were great; mobile wallet approvals are even better.” Following closely were account-to-account banking transfers, buy now, pay later services, and even cryptocurrency. Other emerging needs include Click to Pay from providers like Visa and Mastercard, alongside greater support for local payment rails. With this rapidly evolving mix of payment types and consumer preferences, merchant payments are more complex than ever. “Merchants got into multi-acquiring because of channel expansion and country expansion, and a lot of them lost visibility across channels with different tokenization schemes, different fraud schemes, and different settlement schemes,” Apgar said. “Orchestration is a way to pull out those standard elements across the acquiring landscape and bring that continuity back to the enterprise.” Defining the Orchestration Payments orchestration has evolved beyond simple gateways that connect merchants to multiple providers. Modern orchestration platforms now integrate 3-D Secure authentication, risk management, point-to-point encryption for in-store transactions, and tokenization—addressing the full spectrum of payment complexity. For merchants, managing these services themselves is not only time-consuming but also prone to errors, inefficiencies, and lost revenue. A true payments orchestration platform takes on this burden, providing a single, centralized hub where every transaction is visible and manageable in real time. “You make one single call; it’s doing an orchestrated list or pipeline of tasks,” Coates said. “I am going to check the risk on that consumer, I am going to execute a 3-D Secure risk check if the score comes back and do that step-up authentication. Then, I’m going to go ahead and do the authorization and then do a post-authorization risk check.” “Before I return a response to the merchant, I am also going to tokenize that card number such that they do not have PCI data and they can also reference that number in the future,” he said. “That is what I define as orchestration.” These platforms unify what was once a highly fragmented operation, offering merchants a single view of all their payment activity, regardless of the number of acquirers involved. Smart retry, for example, allows a payment initially declined by a global acquirer to be automatically rerouted through a local one. While the local acquirer may charge slightly more, the approach prevents lost sales and reduces cart abandonment—a tradeoff that is often highly profitable. Similarly, least-cost routing optimizes every transaction based on factors like channel, transaction type, and issuing country. This ensures that payments are processed through the acquirer offering the least-expensive and best approval rate. “That’s where we’re seeing a lot of growth in AI in this whole scheme because you’re talking about maximizing approval rates and using higher cost networks only when necessary,” Apgar said. “Before, there was always a lot of rules-based structure around how to operate in an orchestrated environment. If you get this kind of a card, send it over here. If it fails at point A, send it to point B.” “Now AI is making that more dynamic. Rather than following a structured rule set, the orchestration platform can make these decisions on the fly and the rules adapt to the environment as the issuers change, as the external environment changes and affects the merchant,” he said. Keeping Top of Mind The technology behind payments orchestration is sophisticated, yet the goal is simple: increase approval rates, reduce chargebacks, and lower overall payment costs—all while freeing merchants from operational complexity. As the payments landscape continues to undergo transformative changes, orchestration platforms will remain critical for merchants looking to maximize revenue and stay competitive. Three key trends are set to make this technology even more essential in 2026. “Number one, payment methods and payment channels will continue to increase and proliferate,” Coates said. “It’s more complex, there’s more c

The ACH Network is reliable and ubiquitous. And over the past year, it continued to realize strong growth, both in the volume of payments and overall dollar amount. In 2025, ACH Network payment volume increased by roughly 1.6 billion, reaching a total of 35.2 billion, or an average of 141 million payments per day. In the same period, $93 trillion moved across ACH rails, up nearly $7 trillion from the prior year. While transaction volume grew by 4.9%, the total value of those payments increased by 7.9%. This growth reflects the continued expansion of ACH use cases across the payments space. In a PaymentsJournal Podcast, Michael Herd, Executive Vice President of ACH Network Administration at Nacha, and Ben Danner, Senior Analyst, Credit and Commercial at Javelin Strategy & Research, analyzed the drivers behind this increase and explained why ACH is positioned to grow even further. Embedded in the Economy A highly efficient method for moving large volumes of payments, ACH continues to see growing adoption—including B2B payments, consumer bill payments, and account transfers. It remains a cost-effective option for high-volume payments between known counterparties. ACH is directly embedded across a wide range of platforms, software providers, and business workflows, including invoicing and payroll. Businesses from Stripe to QuickBooks to ADP all offer ACH as a readily available payment option. Because ACH is so deeply integrated across the economy, it tends to grow in lockstep with overall economic activity. How the ACH Network scales to support that growth has been an important factor in its recent expansion. Moving on From Checks Despite the government’s high-profile decision to move away from paper checks last year, federal ACH volume increased by just 1%. The commercial sector has been the primary driver of overall growth. In the B2B segment, ACH volume exceeded 8 billion transactions in 2025, representing $63 trillion in value, and continues to grow at roughly 10% annually. This dovetails with findings from the Association for Financial Professionals, which reported last year that checks now account for just 25% of B2B payment volume. “That calls out a success at the industry level in moving businesses from checks to ACH,” said Herd. “It also shows that there’s room left to continue that transition for the 25% of B2B payments left that are checks, and that could still move to ACH and other payment rails.” Danner added: “Replacing paper checks has been an important development. The paper check is clunky, less efficient, prone to fraud, and you have to mail it. Why not use something like ACH? It’s safer, it’s automated, it’s cheaper, it’s easier to reconcile, improves cash flow, liquidity, and reduces manual processing.” Another fast-growing B2B use case is healthcare claim payments, which flow from insurers and other payers. Last year, ACH processed 548 million healthcare payments, moving nearly $3 trillion directly to medical providers, hospitals, and pharmacies. Consumer Growth in Same-Day ACH As impressive as the growth of the overall ACH Network is, Same Day ACH has been expanding at an even faster pace. In 2025, Same Day ACH transactions grew nearly 17%, exceeding 1.4 billion payments. It’s increasingly becoming a routine part of consumers’ financial lives. “We’re seeing Same Day ACH being deployed in consumer payments pretty broadly,” said Herd. “The use cases include account-to-account transfers between financial institutions, digital wallet loads where funds are being debited from a bank account, and credit card bill payments where the issuer has reasons to collect funds as quickly as possible.” Online consumer ACH payment volume rose by about 650 million payments to reach 11.4 billion, representing 6% year-over-year growth. These payments cover a wide range of consumer bills—including mortgages, car loans, insurance premiums, utilities, student loans, and credit card bills. Essentially, any recurring payment that resembles a bill is a natural fit for online ACH. Popular alternative payment methods, such as digital wallets, often rely on ACH either to move money to or from a user’s bank account or to settle transactions behind the scenes. Many credit card bills are paid via ACH, as are numerous settlement payments to merchants. The continued shift away from paper checks is also driving this trend. Pay-by-Bank via ACH The continued shift toward faster electronic payments has paved the way for Open Banking, also known as Pay by Bank. This approach lets consumers pay directly from their bank accounts, streamlining transactions and reducing friction. Younger generations, in particular, expect mobile-first, fully digital experiences, making Open Banking a natural extension of the ACH Network. Linking to a bank account through an Open Banking session to initiate an ACH payment fits seamlessly into this environment. Even major players like Walmart now offer Pay by Bank through their apps. “I often talk about people in their 20s who have never had a checkbook, have never written a check, wouldn’t know how to locate routing and account information in order to pay a bill, or even sign up for payroll Direct Deposit,” said Herd. “They largely do that through their phones by Open Banking and linking their bank accounts.” “It’s not surprising that these areas are growing, especially as consumers continue to embrace digital payment methods,” said Danner. “We’re in the early stages of adoption of true Open Banking in the U.S., and there’s still tremendous potential for ongoing and expanded adoption of that and its ability to enable ACH payments.” “Younger generations of consumers and employees are enrolling in ACH payments for transfers and payroll Direct Deposit,” he said. “And there’s still a lot of potential there for it to become even more mainstream.” New Rules for the New Year Even with the rise of Open Banking and faster, more frequent ACH payments, Nacha also remains focused on safety and soundness. New Nacha Rules are set to go into effect to enhance the system’s value and security. In 2026, ACH participants will begin implementing upgraded transaction monitoring rules, with additional improvements—including for international transactions—also on the way. These changes aim to support the growing volume and speed of payments while maintaining reliability for both consumers and businesses. “Over the long run, we have better risk management across the entirety of the ACH system,” said Herd. “That creates an environment that is receptive to and encourages additional adoption and growth.” “An example we’ve experienced in the past is account validation, which is a rule we added in 2018,” he said. “It created a whole new industry of account validation services that enabled better ACH risk management quality and therefore better adoption. That’s the kind of thing we’re looking for to contribute to even further growth in the future.” Taken together, these trends show the ACH Network’s continued growth is the outcome of thoughtful integration, ongoing adoption, and continuous modernization. It continues to be well positioned for businesses and consumers who are moving away from paper checks and towards faster, safe electronic payments.

Fraud is evolving faster than ever, with AI-powered scams, deepfake-enabled identity theft, and a surge in account takeovers putting financial institutions on high alert and accountholders at risk. As the most visible safeguard of the past few decades, the humble password is coming under increasing scrutiny. In a PaymentsJournal podcast, Dr. Adam Lowe, Chief Product and Innovation Officer at CompoSecure and Arculus, and Suzanne Sando, Lead Analyst of Fraud Management at Javelin Strategy & Research, explored the rising fraud challenges facing financial institutions and how some of the latest solutions may be inspired by innovations in retail. Emulating Retailers Without much fanfare, two of the most successful online retail sites have been moving beyond passwords. eBay has embraced passkeys for years, while Amazon has announced plans to go entirely password-less by 2030. For banks, adopting similar approaches could reduce account takeovers and streamline customer access without compromising security. “In the same way that they think about completed carts when you’re buying your favorite collectible on eBay, a bank or financial institution should think about completed user journeys,” said Lowe. “Whether I’m trying to send a wire, ACH, get a mortgage, whatever, I’m trying to complete a journey. If we can look at these tech leaders, take what they’ve learned, and apply those learnings to FIs and banks, we’ll be in a great spot.” Fraud on the Rise It’s clear that urgent action is needed to combat the rising instances of financial fraud. Around 60% of financial institutions have reported an increase in fraud over the past year—a figure number that climbs to nearly 70% among enterprise banks. Javelin’s research revealed a 90% increase in losses suffered by consumers targeted by identity fraud between 2023 and 2024. Meanwhile, the incidence of traditional identity fraud has also been rising year over year, though at a slower pace. These losses are not just financial—they demand significant time, operational effort, and resource allocation to detect and resolve identity fraud issues. We have entered the AI era, accelerating both the volume and speed of attacks. Many financial institutions are struggling to counter these sophisticated threats while relying on aging legacy systems. Banks that fail to act now risk finding themselves even further underwater. “A lot of those losses are attributable to account takeover and new account fraud, where criminals are relying on AI to increase the legitimacy of their phishing attacks,” said Sando. “They’re finding ways that bypass authentication and ID verification. Nine in 10 consumers in our annual survey report that they fear AI will be used against them to commit identity fraud.” Even some biometrics can be faked. Any scenario in which a consumer can be tricked into giving a code can expose biometric templates, and weaker biometrics, such as voice, are increasingly easy to replicate. Beyond the Password Many in the industry recognize that operating from a purely defensive position is no longer sufficient. With the rise of artificial intelligence, a proactive approach to blocking fraud—through stronger authentication methods—is key. Financial institutions need to recognize that the passwords consumers are comfortable using are not enough. These credentials are frequently reused across multiple accounts, both financial and non-financial, fueling the proliferation of account takeover incidents. “It’s a habit that is unfortunately being reinforced by banks at this point to encourage the use of a username and password,” said Sando. “Stronger and more advanced authentication is removing those weaknesses, and it also instills confidence in the validity of the identity of the user on the other end of the interaction.” Financial institutions and consumers alike are seeking credentials that are resistant to spoofing and don’t impose penalties for legitimate use. That’s where passkeys provide a solution. Similar to signing a check, a passkey allows users to digitally authenticate into a banking app or card using a unique key that proves identity in a zero-trust manner. Trust doesn’t need to be assumed or guessed; cryptographic verification ensures authentication in a secure and reliable way.” “Technology like our Arculus tech—where a passkey is built into the card when you need to have a user step up or authenticate it—goes back to those easy-to-use but zero-trust methods that allow banks and FIs to protect their consumers,” said Lowe. “I was in Las Vegas for work and I got locked out of my banking account because I didn’t get to a text message that got delayed fast enough. “Here you could have a user seamlessly prove who they are with something that’s in their pocket every day. And you don’t lose that customer relationship, you don’t lose that revenue, and you don’t get that false decline.” Doing Fraud Prevention Right Passkeys are poised to become a cornerstone of the next generation of fraud-fighting tools. While there is often too much reliance on consumer education to detect and prevent fraud, education still plays an important role in helping customers understand why this step is necessary and how it protects them. What’s needed is to show consumers real, concrete examples of how easy it is to crack or bypass traditional authentication methods such as passwords and OTPs—and the true scale of fraud losses that result. There’s plenty of industry chatter and data on this topic, but far less understanding of the real-world impact of fraud on consumers themselves. “Consumers want to know how their bank is protecting them from identity fraud and how they are securing their accounts,” Sando said. “They don’t want to just bury their heads in the sand and hope for the best. Consumers look to their bank and their financial institutions as the experts in protecting their identities and their accounts. And as consumers, we want to take the necessary steps and actions to protect our accounts.” Customer buy-in is essential to the success of any fraud prevention program. It cannot succeed unless users actually adopt it, find it easy to use, and clearly see its value. “When banks and financial institutions get fraud prevention correct, it’s a better user experience, it’s better brand loyalty, and they are actually reclaiming revenue at the top line as well,” Lowe said.

Banks are no strangers to artificial intelligence. For years, machine learning and deep learning models have quietly powered fraud detection, transaction monitoring, and risk analysis. But the industry is now approaching a more consequential shift: agentic AI—systems that don’t just analyze data, but can act on it. With that shift comes a fundamental question about how much authority banks are prepared to give to machines. Trust sits at the center of the debate. Is AI ready to be trusted with decisions that carry financial and regulatory consequences? That question was featured prominently in a recent conversation between Deepak Gupta, Chief Product Engineering and Delivery Officer at Volante, and Christopher Miller, Lead Analyst of Emerging Payments at Javelin Strategy & Research. And if the answer today is “not yet,” what needs to change for banks to get there? Ways to Leverage AI Across financial institutions, AI adoption is accelerating for a clear reason—efficiency. Internally, banks are under pressure to do more with fewer resources. AI is increasingly used to automate repetitive tasks, improve accuracy and consistency, reduce investigation backlogs, and bring greater predictability to operations that have been historically labor-intensive. Externally, the focus shifts to customer impact. Banks are exploring how AI can lower operational costs for clients, reduce friction across payment flows, and strengthen compliance. Some of the most compelling opportunities sit at the intersection of both. In payments operations and exception handling, AI can repair and enrich payment data, classify exceptions in real time, and route transactions to the right place. Machine learning models can identify fraud as it happens while reducing false positives. Conversational AI adds another layer, enabling natural language queries such as “Why did this payment fail?” “Where did it get stuck?” “How was a similar issue resolved before?” Meanwhile, banks are applying AI to intelligent payment routing, liquidity optimization, and funding prediction—turning what were once reactive processes into proactive ones. Cutting Down on Time For the moment, the simplest answer is that AI reduces the amount of time required to perform certain tasks. This progress tends to happen in fits and starts, which makes the impact feel uneven—especially when AI affects only one part of a task or workflow. To understand the impact that ultimately shows up on the bottom line, it is important to take an end-to-end view. The real benefit is not solving a specific problem, although that remains important. Understanding how AI is changing outcomes requires an end-to-end perspective across an entire domain or set of workflows. “Our approach is learn to walk before you run, and run before you sprint,” said Gupta. “We are thinking of AI as an assistant to payment operations teams. Maybe in a couple of years, the confidence level increases, the predictability increases, and the algorithms gain more acceptance, to a stage where you might be able to say to a subset of your payment system: OK, go ahead and approve it automatically.” How to Measure AI’s Success The first area of impact is efficiency. For example, has the cost and effort required to process a payment been reduced? Given a fixed volume of payments handled by a single person, AI can enable a higher volume to be processed with the same headcount. In concrete terms, efficiency is reflected in the number of transactions processed per person before and after AI. The second area is risk reduction, such as identifying and minimizing false positives or preventing compliance violations. The goal is to create business value, whether by lowering the cost per transaction or allowing customers to expand their revenue base. Finally, there’s adoption. Even the best tool has no value if it’s not used. Building Trust Achieving widespread adoption depends on organizational trust in AI. Miller analogizes this to career ladders used to develop individuals over time, where capability and responsibility increase gradually. “If you show up as a new hire, you get limits around the amount of damage you can do,” Miller said. “It might be that you can only approve things below a certain volume, or you can’t work with certain clients. We build guardrails around people to limit the amount of damage that their learning process can cause. As we think about how to measure the effectiveness of AI, we might have to actually return to that.” “These guardrails are not because AI is dangerous,” he said. “It is because learning is a process that generates risk. AI has to prove that it’s trustworthy. If it can’t do that, there will be no adoption. But for trust to emerge, you have to start using it first.” That trust has to be prevalent on both sides. “When I get in my Tesla, I find it safer for Tesla to drive than myself, because I get distracted,” Gupta said. “I get a phone call or I’m looking at something else. But once I put the car on self-drive, I know it will stop itself at the right time. In fact, my family says when we go together, ‘Dad, why don’t you let the car drive itself? It drives better than you do.’ “The key is to take the risk to let the car drive itself first,” he said. “You can still be in control, but let the car drive itself. The same thing that should happen in payments: trust the new technologies, trust the new paradigms.” Looking to the Future One development already underway is the emergence of systems capable of taking action autonomously. Guardrails are not just controls—they form the foundation of trust, allowing leaders and operations teams to delegate more tasks to AI that can learn and adapt. “Instead of delegating the workflows as they exist, you create the possibility of a world where the systems might reinvent the workflows on their own,” Miller said. As AI continues to evolve, banks will not just respond to payments. They’ll anticipate them, becoming more proactive, efficient, and strategic in managing the flow of money. “Payments will transition from largely a transactional back-office function to an intelligent continuously available capability,” Gupta said. “AI will enable banks to shift from reactive processing to proactive and predictive operations. When you go to FedEx, you don’t tell them which plane you want the package to go on. You just say when you want the package to get there and how much you’re willing to pay for it. And then voila, FedEx does the magic for you and says: OK, these are the options, which one do you want? “Similarly, you shouldn’t have to figure out which payment is the cheapest option. Should I send it through RTP or FedNow? Just let the AI do that for you. AI will find the fastest and the cheapest path.”

In today’s world, nearly anything a business or individual desires is available instantly. Yet, for most, receiving a payment still takes two to three days to clear, despite the availability of instant payments networks such as FedNow. What will it take for instant payments to reach a tipping point and become a standard expectation? In a PaymentsJournal Podcast, Justin Jackson, Head of Enterprise Payment Solutions, Digital Payments at Fiserv, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed potential triggers for an inflection point for FedNow and other instant payment methods, and how financial institutions should be preparing now. Looking for Hockey Stick Growth Although instant payments have experienced steady growth and adoption, a defining moment that pushes them into the mainstream has yet to occur. Instant bank-to-bank transfers and digital disbursements platforms process payments in real time, but a breakthrough use case that drives significant volume has not emerged. One likely catalyst for that critical moment would be the federal government. As the largest payor to both individuals and businesses, any major move toward instant payments could have a sizable impact on the U.S. economy. The government possesses the ability to shift the market. Steps in that direction have already been taken. The federal government has largely stopped issuing paper checks—with a handful of exceptions—so recipients of government funds increasingly require bank accounts for direct deposit. It’s a small step from there to instant payments. Europe has already completed a similar transition, with real-time payment methods integrated into everyday financial activity. “I was in the EU earlier this week, and I met with a large bank that recently deployed instant low-value payments in their markets, the equivalent of a FedNow or RTP transaction here in the U.S.,” said Jackson. “They didn’t do a bunch of marketing fanfare, and they didn’t automate conversion of their low-value batch transactions into instant transactions. They just put it out there so that users could take advantage of an instant payment. Within a matter of weeks, they’ve already seen usage approaching 20% for the instant transaction instead of the batch-based transaction.” Disaster Payments A critical opening for government intervention is providing instant payments for disaster relief. Anyone who has experienced a hurricane or wildfire knows the urgent need for immediate funds to cover basic necessities, such as clothing or temporary lodging. Receiving a check is often impractical in a disaster zone, as cashing it can be nearly impossible. While prepaid cards are sometimes used, they’re limited—recipients can’t pay rent or make other essential payments that require traditional banking access. What people truly need is direct deposit into their bank account. If their FI can’t process the transaction instantly, recipients are effectively cut off from accessing and using the funds when they need them most. “Having that instantly delivered transaction is critical, and being the financial institution that enables that is going to engender loyalty that you were part of the solution in their time of need,” said Hirschfield. “As opposed to, well, you weren’t ready, right? You weren’t at the table and able to take that transaction in real time. That’s a very different perception from your account holder as to the capability level for your institution, taking that instant payment at the moment when it was really important.” Options for the Gig Economy In the private sector, one promising use case is within the gig economy. Workers in this space are often paid irregularly. For example, someone who spends an afternoon driving so they can pay their rent may need to receive their earnings quickly. But that is not always possible. “We’ve seen gig economy companies telling workers that because of where they bank, they can’t get their money for another three days,” said Jackson. “Now put yourself in the mindset of that worker. The whole reason they just spent an afternoon doing this work is they need that money right now because the rent is due. Being told to either wait three days or go to a different bank, it might make sense for them to think about a different financial institution relationship.” The Challenge for Smaller Banks Financial institutions and banks serving smaller communities have been the least likely to enter the instant payments fray, yet they may be the ones who need it the most. They can’t afford to have a competitor down the street offer this service while they can’t. As more government payments start to flow across instant payment rails, and as more agencies disburse or accept funds this way, nonparticipating FIs will face even greater pressure to join the networks. That same dynamic will also spur the discovery and utilization of new use cases. Availability is the first step toward mass adoption, setting the stage for a critical mass of FIs nationwide to participate in the networks. As participation grows, so too will adoption and usage, ultimately making instant payments the norm rather than the exception. Don’t Get Left Behind So, what should smaller banks and credit unions be doing now to prepare for instant payments? The first step is to consider the implications for their own business. They should evaluate how their products can leverage instant payments—not just in terms of technology, but in how customers—from consumers and small businesses to commercial enterprises—actually want to use them. Most importantly, don’t wait for the inflection point before taking action. Banks that hold off until the government mandates instant payments for key transactions risk being left behind. “Social Security payments are not available as instant transactions right now, but don’t wait for that announcement to come out until you sign up,” said Jackson. “Otherwise you will have a whole list of customers asking, ‘Why can’t I receive my payment instantly?’ Because it’s guaranteed that someone else can.”

The rise of artificial intelligence is coinciding with a shift toward instant payments that are increasingly difficult to stop once fraud occurs. Real-time payments put a stopwatch on fraud prevention, leaving businesses with only moments to detect and respond to suspicious activity. Striking the right balance between frictionless customer experiences and strong controls is becoming a critical challenge for businesses. In a recent 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 the importance of collaboration and highlighted how AI has become a double-edged sword—assisting fraud prevention teams while also giving criminals more sophisticated tools. A Growing Concern OpenAI tools have enabled scams to scale, increasing their ability to penetrate markets across the globe with minimal friction. Javelin’s research found that 88% of consumers are concerned that AI will be used to commit identity fraud against them. “What I’ve been hearing more is voice can’t be trusted and video can’t be trusted,” said Sahota. “The scale has increased, meaning that the cost of committing fraud is very low, meaning that the potential gains that the frauds can go after are even more exponentially higher year on year.” Sando added: “We’re all confident that the number one tool that’s going to be used by fraudsters is AI. We’re going to see a shift in focus to more manipulation and social engineering tactics versus just the more traditional way of trying to gain unauthorized entry into an account.” Faster Payments, Faster Fraud The rise of faster payments also means faster fraud. When money moves instantly from one domestic account to another, the sender often has little to no recourse to recover funds—regardless of whether the loss stems from fraud or simple error. In cross-border payments, fraud exposure rises exponentially, and the likelihood of recovering funds is even lower. While some countries offer consumer and business protections that can partially offset these losses, reimbursement is typically limited to specific regulatory or legislative corridors. Overall, the longstanding processing delays built into traditional payment channels have effectively disappeared. As a result, real-time detection and prevention of suspicious activity are no longer optional—they’re essential. Detecting Legitimacy Is Paramount Organizations should be analyzing every piece of data available to them to gain confidence in who is authorizing a payment or purchase. This includes the need for stronger shared network data and deeper network intelligence. Without access to that intelligence, organizations are likely to miss important signals—often at the exact moment they matter most. Detecting those signals in real time can prevent significant financial losses for customers and reduce future instances of identity fraud. The challenge lies in navigating this process in real time: collecting and analyzing information using faster, more accurate data signals at speed. This requires evaluating biometric attributes tied to the device and the transaction, as well as determining what constitutes normal versus abnormal behavior. How the Good Guys Use AI More transactions are conducted digitally than ever before, with trillions of transactions and a quadrillion dollars in value exchanged each year. How is it possible to identify a bad or suspicious transaction amid all that activity? One emerging answer is the use of AI. When combined with robust data and existing defense mechanisms, AI adds another layer of protection against attackers who are themselves using AI illegitimately. However, AI must play a proactive role—taking the offense in ways that can prevent fraud before it happens, not just detect it after the fact. Criminals can take greater risks and move faster because they’re not constrained by AI governance or risk management teams. To keep pace, fraud prevention teams need strong collaboration and the elimination of organizational silos. This enables them to adopt AI responsibly as it evolves, close the gap with criminals, and ultimately get ahead of them. Another major trend is the focus on authentication and identity proofing. Many banks are recognizing that they are losing confidence in the true identity of the user on the other end of a transaction. “How can we trust that transaction if we can’t even trust the person who may or may not be authorizing it?” Sando said. “That’s going to be particularly important as we see a rise in deep fakes and synthetic identities that are aided by AI.” Minimizing (but Not Eliminating) Friction This is also an important moment for organizations to consider what their optimal level of friction should be. The conversation often centers on balancing friction with the consumer experience, but the goal should be less about eliminating friction entirely and more about applying it where it matters most. Effective friction comes from confidently verifying who is being paid or confirming that biometric data aligns with patterns observed across recent transactions. Contextual signals such as biometric behavior, rich transaction data, and network and device intelligence provide valuable insight without creating unnecessary friction for consumers. These signals allow organizations to make confident decisions about whether fraud or suspicious activity is present without compromising the customer experience. When suspicious behavior is identified, authentication measures can then be appropriately escalated. “When businesses make payments, typically to their suppliers, those can be 30, 60, even 90 days out,” Sahota said. “And one of the areas that we’ve been working on is how can we create tools to verify who they’re paying well in advance of when they pay. The friction is done much earlier, but it’s the right level of friction.” Fostering Collaboration True market leadership today depends on deep collaboration—partnerships that go beyond traditional boundaries to address challenges collectively. One area where this is starting to take shape is in the sharing of fraud insights across market participants, enabling faster detection and smarter prevention strategies. “If we look at how our organizations manage fraud, whether that’s a bank, fintech or a multinational corporate, typically it’s done in some level of isolation,” said Sahota. “We need to get better with our cross industry and cross-border collaboration and data sharing. That’s where we have the strongest shot at reducing fraud and scam losses.” But these efforts must evolve far more rapidly and on a larger scale. Fraud networks operate globally, and the response to them must match that scope and sophistication. “A private-public sector collaboration and partnership would allow connections between everyone who has something to bring toward solving the problem,” Sahota said. “When we work together, we will get in front of the problem, and we will beat the fraudsters in their game that they play.”

Digital banking has trained consumers to expect speed, simplicity, and instant results. Yet, when those same expectations reach the commercial side of the house, many financial institutions fall short—leaving business clients stuck in slow, manual onboarding journeys that drive up costs and frustration. In a recent PaymentsJournal podcast, Penny Townsend, Co-Founder and Chief Payments Officer at Qualpay, and Hugh Thomas, Lead Commercial and Enterprise Payments Analyst at Javelin Strategy & Research, discussed the common challenges that often hinder commercial banking onboarding and explored how organizations can meet rising customer expectations while still maintaining compliance. Bridging Gaps in a Broken Onboarding Process One of the main issues contributing to onboarding deficiencies is the continued use of outdated systems. Paper documents and manual data entry are still a fixture in many processes, often causing delays and errors. What’s more, the complexity of onboarding commercial clients frequently requires back-and-forth communications, which can create bottlenecks and misunderstandings. Even when institutions manage to navigate these hurdles, they sometimes stumble at the final stage. “A number of years ago, I applied with a company and their onboarding process was particularly fantastic right at the beginning of it,” Townsend said. “But I couldn’t quite finish it when they were trying to authenticate who I was. Know Your Customer (KYC) was happening, and it went offline to try and figure out who I was as a person, and I couldn’t get through that process. I can’t even explain to you why I couldn’t get through it, but I couldn’t figure out how to take that last step.” These challenges often arise because organizations are trying to juggle multiple processes simultaneously—collecting data, performing authentication, ensuring compliance, and meeting security protocols. When institutions rely on outdated systems, more gaps emerge, making it harder to guide clients smoothly through the onboarding journey. This stands in stark contrast to the streamlined interfaces and seamless interactions that have become standard across other sectors. “I was trying to renew my driver’s license in the UK and the whole government process has been digitized,” Townsend said. “For me to prove who I was, it was a combination of using my phone and my passport. I had to put my phone next to my passport and it scanned my passport details. I had to take a picture of myself as well with my phone and that completed the KYC.” Commercial clients, accustomed to these modern experiences in their everyday interactions, are likely to resist onboarding processes that rely on paper documentation and lengthy communications. “Expectations for systems in things like B2B payments are being driven more so today by consumer experiences,” Thomas said. “If you can do this for my driver’s license, why can’t I onboard a new supplier with the same degree? Why is it not just a QR code or something like that? We securely exchange enough information that we know one another well enough to do business and to have a banking exchange between us.” The Juxtaposition of Departments Along with outdated systems, many onboarding processes are managed across siloed networks and fragmented workflows. When financial institutions rely on disparate systems for services such as cash management, lending, and onboarding, clients often have to provide the same information to multiple departments. This duplication can lead to longer approval times and higher costs. “A perfect example would be the separation that was driven by the changes that happened after 9/11 and with FinCEN, and this different structure where I have an underwriting policy in one department, but I also need to do my anti-money laundering with a different group,” Townsend said. “There was a reason why those two departments were segmented: because compliance has this strong role at a bank, but it’s juxtaposed with wanting to onboard customers, and then you have an underwrite as well.” “When you have people that have different focuses and they’ve not all been merged together, there’s going to be a lot of friction between what those teams do, and that typically creates a lot of the slowdown that happens,” she said. These delays may result from departments being physically separated, using incompatible technology, or operating under different rules. Additionally, a department’s main goal may not be to onboard customers efficiently. These conflicting goals create friction, which can lead to a poor first impression and even missed opportunities. “I’m always struck by the opportunity that often gets left on the table to better coordinate across departments for the betterment of everyone,” Thomas said. “A great example is if you do payables outsourcing and you look at the flow that’s going out to see what’s potentially going to FX providers.” “Off that, you say, ‘What could we do conceivably to get a piece of this FX business, knowing the volume that’s going out and understanding we have this overall risk perspective on the customer and we park this much of their capital in different credit products,” he said. “They’d be that much more of an efficient type of customer, but I’m always struck by the fact that through siloed components of institutions, you just don’t get that kind of coordination.” Driving Through the Lifetime As regulatory and compliance demands continue to mount, financial institutions are facing an unprecedented challenge: how to stay compliant without stifling businesses growth. Many banks still rely on processes that require businesses to submit the same documents multiple times across different departments—adding friction and slowing onboarding. Manual compliance checks can also miss critical red flags, leaving institutions vulnerable to fraud, exploitation, and costly penalties. These risks are amplified by an ever-shifting regulatory landscape and the rise of transformative—but not yet fully tested—technologies. “The latest thing that’s probably going to be the biggest impact on how we think about privacy is artificial intelligence,” Townsend said. “You’re seeing the different states are having a different opinion and we’re seeing the federal government come in potentially with an overall arcing framework for what we should do. That, in itself, will impact how privacy is thought about and how we deal with people’s data and where it can be stored.” In this complex environment, financial institutions are under immense pressure to understand and navigate their obligations. Yet, embedded within these challenges is a significant competitive opportunity for organizations that can turn compliance into a strategic advantage. “It comes down to changing attitudes around how you create this onboarding experience,” Townsend said. “Javelin wrote a fantastic article that talks about the onboarding experience being not just this moment in time when you onboard the customer at the beginning, but it’s something you think about it through the lifetime of the customer.” “That sounds weird, but when banks have so many products that they can offer to a customer—whether it’s a business customer or consumer—that onboarding experience drives through the lifetime,” she said. “How do you meet and bring products at the right time, at the right moment to a customer?” Starting on the Other Side Shifting the mentality around the onboarding process can be challenging, especially since many banks have historically outsourced some or all of these functions. However, outsourcing has become an increasingly perilous tack to take, as numerous organizations are now waiting to step in and address the gap if banks are unprepared. To stay at the forefront of the commercial customer banking experience, financial institutions will need to start at the very beginning. “It’s just that shift in attitude of how you can think about things differently, where we think about customer satisfaction first and how we can make that experience better,” Townsend said. “Then, think about how do I apply compliance and how do I apply all these different things.” “Have a different way of framing it rather than starting at the other side of it—this is why we can’t do this, or this is why we can’t do that,” she said. “Shift how you think about it, and that will probably be the greatest opportunity for change that banking might have over where we are right now.” Building the Bridge Altering this mindset is essential, as fintech competitors are often more equipped to handle certain onboarding aspects than banks are. For example, recent research from Capgemini found it can cost up to two to three times more–around $496–for a financial institution to onboard a merchant for payment services, while a technology company can spend approximately $214 to accomplish the same task. This cost gap shows no signs of narrowing, which makes it even more difficult for many institutions to compete. This means the future of financial institutions’ merchant acquiring commercial banking products will belong to the organizations that can shift their mindset from gatekeeping to guidance, and from a compliance-first to a customer-first mentality. “With compliance as the backstop to what’s going on, modern onboarding cannot remain just that one-time event or that disconnected checklist,” Townsend said. “It has to evolve into a continuous and integrated experience that adapts during the life cycle of a client–and also when you want to add and remove products. All of this will help strengthen the relationship over time.” For a financial institution to achieve this transformation, it is critical to select the right technology and partners that can provide a holistic view of the process. This means the partner should be equipped to handle all aspects of onboarding, underwriting, and compliance payments, as well as the customer engagement life cycle. While turning to partners f