PaymentsJournal

One of the most effective tools in the fight against cybercrime is information sharing—particularly through anonymized consortium data signals—a practice increasingly referred to as cyber fusion. Despite its promise, many institutions remain wary of collaborating in this way, often even within their own organizations. Greater cooperation—through shared data and interoperable fraud, anti-money laundering, and cyber tools—not only enhances the ability to detect and prevent financial crime, but also delivers measurable benefits to the bottom line. In a PaymentsJournal Podcast, Teresa Walsh, an intelligence professional with over 20 years experience in both the government and financial services sector, and Tracy Goldberg, Director of Cybersecurity at Javelin Strategy & Research, spoke about the advantages of adopting cyber fusion and the key barriers that keep financial institutions from pursuing it more widely. Breaking Down the Silos The financial industry is notorious for operating in silos, with people focused myopically on their own teams’ responsibilities—often without considering how one function impacts another. As organizations network and build stronger internal connections, it becomes clear that no single group holds the complete picture. Combating cybercriminals effectively requires consolidating information and fostering collaboration across functions. Companies approach cyber fusion in different ways. In some cases, it involves integration within the information security department—bringing together not only the cyber threat intelligence team but also incident responders, forensic teams, AML teams, and Financial Intelligence Units. Each of these groups plays a role in the broader effort. “First you have to understand what exactly you're fusing,” said Walsh. “I see an increasingly prominent blurring of lines between what we would define as cybercrime versus nation-state or cyber espionage attacks. We need to get outside the box a little bit and realize that whether it's a scam that's impacted a consumer or a phishing attack that has compromised an employee, all of this ties together. The sooner we can connect those dots and share information across these different industries, the better off we're going to be long-term.” Starting Within the Organization Cyber fusion can start within the organization by cross-sharing information and tools across departments such as AML, communications, and HR. From there, the effort can expand to include cross-industry collaboration and broader information sharing. Cyber fusion should remain fluid. There’s no way to predict what the landscape will look like in five years, so it’s essential to develop a strategy that allows for adaptability and agility. Intelligence needs to be integrated into the process, supporting decision-makers at all levels. It shouldn’t be produced for its own sake—it must serve a clear purpose. “You're trying to deliver intelligence to help people looking at expanding out into a new country or deciding whether or not the technology stack that they currently have is good enough, and you're helping them make those decisions,” said Walsh. “They need objective intelligence that's not just about the technical ones and zeros. Most risk equations are going to talk about the threat that's out there.” “There's a certain threat actor, there's a certain tool that they're using, and it could present a risk to your company,” she said. “What is that and how much exposure do you have? Risk managers need to have good intelligence to help them understand that threat. Analysts try to bring to the table a good understanding of that threat intelligence landscape, helping risk managers decide whether we're doing well, and if not, how can we do better?” Cyber risk goes beyond technology; it also involves the human element, where individuals can be psychologically manipulated. Sourcing threat intelligence experts may require thinking outside the...

Many organizations treat their reconciliation and reporting as mere check-the-box activities, investing only the bare minimum to remain compliant. However, companies that deprioritize these critical back-office functions risk being caught unprepared when faced with a more stringent regulatory environment. In a recent PaymentsJournal podcast, Roger Binks, Chief Commercial Officer at Kani, and James Wester, Co-Head of Payments at Javelin Strategy & Research, explored the current state of the back office, the challenges organizations face, and how businesses can modernize their reconciliation and reporting functions amid regulatory headwinds. A Traceable and Consistent Baseline Research from Kani found notable trends among payment leaders. Just over a quarter of respondents said their firms were using fully automated tools, while many still relied on spreadsheet-based solutions for this complex process. Nearly two-thirds of respondents also reported frequent data errors during reconciliation—errors that are expected to become more expensive and time-consuming as compliance requirements increase. “The regulatory environment is becoming way more prescriptive than it ever has been,” Binks said. “Reconciliation reporting outputs not only have to be consistent, but they have to be traceable. If you're having a manual process in there, the workarounds that you have to put in place to make that traceability consistent is really tough.” “In the UK, the FCA is extending operational resilience requirements into payments,” he said. “What this means is daily reconciliations, real-time controls, and clearly documented processes are going to be mandatory. They're going to be the sort of baseline of everyone's business.” As compliance tasks continue to grow, they add pressure to already strained operations. The report found that roughly 80% of respondents often miss reporting deadlines. These difficulties will mount for organizations that don’t take steps to modernize. “Things like reconciliation, reporting, compliance, these are things that we all talk about and we have for a long time,” Wester said. “We have talked about workarounds and band-aids and fixes and manual processes that are employed, while we also know that regulatory compliance and all of the things that that entails, it's only getting more complex.” “It's a known issue, we all talk about it, and yet it continues to be something in 2025 that we are still talking about,” he said. “I'm almost sad about it. It's almost like, ‘When do we start fixing some of this stuff, especially when we know that regulation and compliance are not going to get any less complex in the future?’” Saving 700 Hours One reason manual processes and reporting issues have lingered is that they haven’t been a priority for many organizations. “Whenever you see regulation or some type of mandate for the way a report must be submitted—or            anything like that—a financial institution, a bank, or a business, they often look at what they must do and they work back from there,” Wester said. “It's almost as though they try to find the least efficient way to do it. To me, I think we look at it the wrong way.” Instead of viewing compliance as a chore, organizations should recognize that the reporting process produces a critical output: data. Through this lens, reconciliation and reporting become valuable assets—ones that can deliver dividends by offering deep insights into operations. Beyond increased visibility, a modernized reporting process also offers tangible efficiency gains. “We asked some questions around how long it took for people to prepare data—just getting it ready for the reconciliation process,” Binks said. “We found that the average UK payments business spends about three hours preparing data before reconciliations can even happen. With that mandatory daily reconciliation process being a requirement—if you work that out—it's about 700 hours ev...

When credit unions look for ways to improve service for their members, accounting systems may not be the first thing that comes to mind. But when Texans Credit Union upgraded its accounting platform, the benefits cascaded throughout the organization—saving money, streamlining operations, and even boosting morale. In a PaymentsJournal Podcast, Tracy Montez, SVP, Controller at Texans Credit Union, and LaChrisha Dourisseau, Vice President of Solution Consulting at Fiserv, shared a behind-the-scenes look at their migration to a new account platform, Prologue Financials. They were joined by James Wester, Co-Head of Payments at Javelin Strategy & Research, who contributed additional insights on the discussion. A Cumbersome Process With $2.2 billion in assets and more than 130,000 members, Texans Credit Union was eager to enhance service delivery. In 2020, leadership began exploring ways to scale operations for greater efficiency and speed. With a new community charter allowing them to serve all of Texas, Texans Credit Union also set its sights on growth.   “One of the things I wanted was an upgraded general ledger system,” said Montez. “While a core general ledger is great for processing loans and deposits, they're not made with accountants in mind, so things take a lot of clicks and a lot of time. We went on a journey to find a product to help us.” Under the old system, sharing financial reports with the CFO meant exporting data to Excel. If discrepancies arose, accountants had to manually trace each line—determining which combination of four GL accounts fed into a number, isolating the variance, and then investigating the source within the ledger. “You would think a financial institution would be the place that would have the latest and greatest,” said Wester. “But oftentimes it's folks in the back-office that are the ones that are having to make do.” Enter Prologue Financials To solve these and other challenges, Texans Credit Union adopted Prologue Financials, an accounting system from Fiserv. The workflow within Prologue saves time and increases efficiency across the entire organization. Previously, closing the books took the team approximately five days; now they consistently close in four. When a three-day close is required, like Thanksgiving, they deliver. “It's a lot easier to get the reports we need to do general ledger balancing in accounts payable,” said Montez. “It helps with our month in review. When I'm going over financials with the CFO, if he has a question about a variance, we pull up prologue on the spot to view what caused the variance.” It's not just about efficiency—it's about morale. After all, nobody loves accounting except accountants. “I can't tell you how many managers have come up to me telling me how much they love the AP workflow because it saves them so much time,” said Montez. “People turn their invoices in faster because they don’t have to allocate an hour to approving all their invoices.” The Conversion Experience Texans CU ended up converting in January—typically one of the busiest months for accounting—but it still managed to close January's books within its usual five days. “We had a good conversion experience,” said Montez. “The data was clean and the people that helped us where experienced. It let us add on a lot of new processes and GLs that we could reconcile without adding any people. We didn't add another person to our team until late in 2024, whereas I think if we would have been on our old general ledger system, we probably would have had to add that person a year ahead of that schedule.” Another advantage for Texans Credit Union was realizing just how much time they’d been spending on manual tasks. Once those processes were automated, the work became noticeably easier. And with remote work, it’s no longer practical to walk over to a filing cabinet to hunt through files. Now, everything is right there on the computer.

As the technology behind payments processing accelerates, it's also reshaping how merchants need to think about the ways their customers pay. Increasingly, acquirers are discovering that by focusing on areas like reconciliation and streamlining the payments workflow, they can build stronger relationships—not only with their customers, but also with their employees. In a PaymentsJournal podcast, Highnote’s Chief Revenue Officer, TJ Grissom, and James Wester, Co-Head of Payments at Javelin Strategy & Research, to explore how Highnote is helping drive the unification of the payments workflow and the benefits this trend is bringing to retailers and other payment acquirers. Looking Beyond Revenue Most merchants just want to run their business. They care a great deal about the business side of things, but not so much about the payment side. That can make it difficult for payment vendors to know which features to highlight, because at the end of the day, the acquirer is primarily concerned with simply being able to accept a payment. Once they’re confident in that, merchants are more willing to explore which bells and whistles might be right for them. And when they take the time to learn more about the process, they often discover the many ways payment solutions can positively impact their bottom line. “There's been an awful lot in the press lately about what core payments really look like,” said Grissom. “The word ‘ledger’ has popped up in payments more in the last three years than it probably had in the previous 50. The core understanding of what true reconciliation looks like—being able to track a payment through its entire lifecycle—has just jumped off the page. We are seeing tremendous value in modern platforms—like what we’ve built at Highnote—that bring to bear a truly unified payment lifecycle.” As a result, merchants are viewing payments not just as a mechanism to grow revenue, but also as a means to create stickiness—with their customer, their vendors, and even their own employees. They're seeing payments as a way to bring cohesion to every step of their value chain. “When we speak with merchants, we think they're going to start by saying, ‘Let's talk about core acquiring and the issues we want to resolve on that front,’” said Grissom. “It's incredible how quickly it turns into, ‘I have a consumer issue that I want to target as well,’ or ‘I have an employee issue.’ By bringing a more unified platform to bear, the conversation quickly switches from money in to money out.” Cost Is Only Part of the Equation Of course, the predominant concern remains cost, which varies for every customer. They each consider it from different angles and paradigms. But they all want two things. First, to reduce the core cost of payment acceptance. Second, to minimize the opportunity cost. “If you're not closing the payments loop rapidly enough or getting your money settled quickly enough, it's costing you in many other areas,” said Grissom. “It’s not only costing you in core time to money, it's costing you in experiences.” Customers are starting to broaden their understanding of what that opportunity cost entails. There is a real loss in not having payments operate as efficiently as possible. “We used to not be able to do a whole lot with the settlement—it was just cost,” said Wester. “Now vendors can do something to influence that. You begin to see different parties that might not have been at the table from an acquirer standpoint when they're talking to a merchant. It's no longer just an accounting function. It might be a treasury function, or a customer facing discussion.” The Restaurant Use Case More merchants are viewing their acquired revenue stream as an asset that can help them address other challenges. They’re seeking opportunities to use payments to make the ecosystem work more efficiently. “I love the example of restaurant ecosystem with its fully integrated vertical SaaS solutions,

A consumer purchases a product and receives exactly what was described. However, they experience buyer’s remorse and want to return it. Unsure if they’ll be refunded, they falsely report the transaction as fraudulent instead. This kind of misuse may seem minor on its own, but it is part of consumer-engaged fraud—a category often mislabeled and misunderstood. In a recent PaymentsJournal podcast, Nicole Reyes, Managing Vice President of Risk Operations at Velera, and Suzanne Sando, Lead Fraud Management Analyst at Javelin Strategy & Research, discussed how to differentiate types of consumer-engaged fraud, the emerging threats within the category, and the steps organizations can take to protect themselves. Defining the Divisions As many businesses have strengthened their fraud defenses, criminals have shifted their focus to consumers. This shift has had an impact—consumer-engaged fraud has become one of the leading drivers of fraud losses in the industry for both financial institutions and merchants. While there is broad consensus that consumer-engaged fraud is growing, there is still division over how to define it. “It can be really hard to track and quantify this type of fraud for each financial institution, especially because of challenges such as mislabeling,” Reyes said. “Some people would consider first-party and scams together. Some would continue to keep first-party reported as fraud, and other financial institutions—once it's determined it is first-party—they may move those into the collection bucket. So even from a settlement perspective, each financial institution can vary.” Consumer-engaged fraud breaks down into two classifications: misuse and persuaded. Misuse occurs when an authorized party reports a legitimate claim as fraud without any outside influence. This includes the traditional first-party fraud model, where a consumer orders an item with no intention of paying—knowingly exploiting a loophole in the system. The persuaded form of consumer-engaged fraud happens when an authorized party acts under outside influence. Most scams fall into this category, such as when a criminal convinces a victim to pay upfront legal fees in exchange for a promised inheritance. While there are just two overarching classifications of consumer-engaged fraud, a deeper look reveals a wide range of subclassifications. “I think it's kind of alarming when we lay out all of the various types of misuse and consumer-engaged fraud and the scams that there are out there,” Sando said. “It's alarming to see all of the various ways that consumers are being targeted. But I think it also hammers home the importance of understanding the nuances of these types of fraud and that they each come with their own signals.” Misuse and Persuaded Under the misuse umbrella is unintentional fraud, where a consumer reports a fraud claim in error. “They thought that they were purchasing something from Nike, but the billing website had a different name,” Reyes said. “When they called and asked to validate this transaction, maybe they didn't recognize it. Then later they call back and say, ‘Oh, I do recognize that is my charge.’ Or they provide their card to a friend or family member and don't recognize exactly what was spent.” There are also various forms of intentional misuse. For example, a person may order an item—typically a big-ticket or luxury product—and then file a false fraud claim. Other types of misuse include cases where a consumer claims an item was never delivered or reports it as damaged in transit. There are perhaps even more instances of persuaded consumer-engaged fraud. These include the many variations of scams and phishing schemes. “One of the big ones that we're seeing lately is the imposter or the impersonation scams, where a fraudster may impersonate an employee or a financial institution and convince the consumer to complete an action that would result in a financial loss,

Financial institutions are among the most trusted entities in the world. Consumers believe their banks act in their best interests—especially when it comes to protecting them from fraud. They expect strong, effective solutions that support their everyday financial activities, safeguard their accounts, and secure their identities. But trust isn’t automatic—it must be earned. Nowhere is this more true than in the fraud dispute process. In a PaymentsJournal Podcast, Ryan Sorrels, CRO at Quavo, and Suzanne Sando, Lead Analyst of Fraud Management at Javelin Strategy & Research, discussed how, instead of letting disputes drive customers away, banks can use these moments to build deeper trust and strengthen relationships. Restoring Confidence After Fraud There is a lot of room for improvement within the fraud dispute process. According to Javelin, nearly half of fraud victims wished their financial institution had treated them like a victim—not a burden. Banks need to refocus on ensuring that this difficult experience doesn't lead to further negativity. In fact, many customers say the way a bank handles the resolution process has a greater impact on their trust in the institution than the fraud itself. “They're already having a negative experience of fraud,” said Sorrels. “We don't want to compound that with another negative experience. Let's take that negative experience and show up to give a great experience. You're doing a tremendous amount to reinforce loyalty as opposed to compounding the problem and eroding loyalty even further.” Many fraud victims want better tracking throughout the claims and dispute process. A small subset of bank consumers file fraud disputes and then never receive any follow-up. This could be due to a lack of standardized and automated procedures to make the dispute process more efficient. Some of these cases might be falling through the cracks, leaving customers feeling like they’re not a priority. Ultimately, that would make anyone feel unhappy with an organization they do business with. The Customer Cost Historically, the dispute resolution process has been viewed as a back-office function—primarily focused on cost, efficiency, and staffing requirements. What's been less examined is the economic impact on the customer experience. When banks deliver a strong dispute experience, they build trust and enhance loyalty. But a poor experience can have the opposite effect, driving customers away. In fact, many customers say the way their bank handles fraud disputes influences their loyalty—and some are even willing to switch banks after a negative experience. “We're so interconnected with our accounts, so it's a lot of work to go through the process of closing an account, opening a new one and getting everything set back up,” said Sando. “There's a lot of rigamarole around closing those accounts, reopening somewhere else, reestablishing all those connections, making sure your information is correct. If fraud victims are willing to go that extra mile, that speaks volumes to the importance of making sure that the customer experience is prioritized, and that you're focusing on reducing that unnecessary friction and maintaining that loyalty and trust.” Banks invest millions of dollars in customer acquisition, with the average cost exceeding $700 per customer. Maybe only 10% of people presenting disputes have a negative experience, but two-thirds of those are at risk of leaving. The cost to reacquire those customers can add up quickly. Even if just 200 customers ultimately leave due to a negative experience, that’s nearly $150,000 just in customer acquisition costs alone. Customers who don't leave risk moving the bank to the back of their wallet. They may stay, but they might adopting fewer products or use existing ones less frequently. Eliminating Friction with AI Much of the friction in today’s dispute process stems from outdated, inefficient systems.

One of the most important resources for any card portfolio manager is understanding cardholders’ spending patterns. This requires not just full access to data, but also the ability to interpret what the data reveals. Growing business intelligence tools like Card ExpertSM from Fiserv are helping issuers gain deeper insight into their customer base, allowing them to serve cardholders more effectively. In a PaymentsJournal Podcast, Janine Wilson, Director of Data Solutions at Fiserv, discussed innovative ways financial institutions are now leveraging cardholder data. She was joined by Deana Bartel, Vice President of Payment Services at Randolph-Brooks Federal Credit Union, and Derek Hayes, Senior Products Manager of Cards and Payments at 1st Source Bank—both of whom are using Card Expert to inform strategy and deliver stronger results. Decisions Driven by Data At the strategic level, cardholder data is essential for understanding not just where clients are transacting, but how they're transacting—whether through digital wallets, e-commerce, or traditional card-present channels. Insights into spending behaviors and peer benchmarking are critical for assessing issuer performance, Hayes noted. “At a more granular level, the data allows issuers to build detailed client personas by analyzing variables such as age, available balance, transaction frequency, and preferred shopping channels,” Hayes said. “Questions like whether a client uses a digital wallet or shops online are easily answered.” “It's absolutely critical that our clients have access to data and use data to drive their decision making,” said Wilson. “We created Card Expert a number of years ago to address this challenge. This tool takes the mountain of transaction and card usage details that exists and distills it into actionable insights. It's a single platform containing lots of data around card portfolio performance for our clients, as well as showcasing how their customers interact with and utilize the various card surrounds that support their portfolio.“ Card Expert highlights where banks and credit unions are performing well—and where they have opportunities to improve. This might include reducing time and expenses related to reporting tasks, identifying areas of decline within their portfolios, and engaging specific groups of cardholders to drive actions like activation and usage. Without clear insights into portfolio performance, it's impossible to make informed decisions or target the right customers with the right offers. “Card Expert has been an easy and effective way for my team to access that data,” said Bartel. “We're using that data to improve things like the rate of cardholder declines, driving digital wallet engagement and taking a more proactive approach to personalization versus segmentation when engaging with our cardholders.” The solution provides an executive-level overview of an issuer’s portfolio while making it easy to drill down into the data. RBFCU uses Card Expert to review declines and identify ways to improve the member experience. It plans to use these insights to send near real-time notifications, allowing members to self-correct without needing to call or switch to another card. Increasing Card Usage 1st Source Bank used Card Expert segmentation tools to analyze clients at different levels, pinpointing those with no or minimal card activity. The data allowed them to design campaigns encouraging these customers to use their card for the first time or increase their usage. Another campaign focused on expanding digital wallet usage. Card Expert provides visibility into which clients were actively using digital wallets, in turn allowing 1st Source Bank to design campaigns that encouraged clients either to add their card to digital wallets or to increase their usage, ultimately driving both engagement and transaction volume. “We want to make sure we’re making data-driven decisions,” said Hayes.

At best, an inefficient accounts payable process can result in delayed payments or limited visibility into spending. At worst, it could lead to misrouted payments and an increased probability of fraud. Yet many organizations still rely on outdated AP processes—jeopardizing relationships with the suppliers that keep their business moving. In a recent PaymentsJournal podcast, Marchelle Becher, Business Development Executive at B4B Payments, and Hugh Thomas, Lead Commercial Payments Analyst at Javelin Strategy & Research, discussed the obstacles businesses face in the AP process, the role of prepaid and virtual cards in payouts, and how a unified payments platform can streamline accounts payable. Holding on to Outdated Systems One of the main challenges with many AP processes is that they still depend on manual invoices, requiring a high degree of administrative involvement. They also often rely on siloed systems. “There are so many companies that have multiple banking accounts or solutions,” Becher said. “It's very fragmented. We see that there's an increase in reconciliation errors in general, and they're still using older payout methods like wires and writing checks and ACH. Today we've got so many other solutions that streamline the whole process.” Many companies continue to use outdated procedures because, despite their flaws, they have mostly been sufficient. As a result, businesses have chosen to invest their time and resources in other areas, such as improving the customer experience. Additionally, there is often a reluctance to innovate in a process that could impact both an organization’s finances and its partnerships. These concerns have been amplified by an increasingly stringent regulatory environment. However, both businesses and suppliers have become more aware of new payments technologies through their experiences as consumers. The rise of digital payments—easily initiated through an app and settled in near real-time—has many users wondering why this functionality isn’t available in B2B payments. “Consumer payments experiences are driving what's expected in commercial payments experiences,” Thomas said. “This is definitely one area where getting outdated is a concern, because you're falling behind where people's expectations are for the technology.” Standing In Sharp Contrast These technologies can bring dramatic benefits to the AP process. For example, the flexibility of prepaid and virtual cards stands in sharp contrast to traditional payment methods such as wire transfers and paper checks. “It definitely reduces the lag time in processing payments, transactions settle immediately and finance teams have real-time visibility into cash flow,” Becher said. “Prepaid and virtual cards are going to reduce the time it takes to write checks, and there's also more controls around them—you can send a virtual card out that can only be used online, or it could be just a one-time use card as well.” A virtual card can be configured with restrictions—such as use at a specific merchant or for a set amount—enhancing control and reducing risk. Similarly, a key feature of a prepaid card is its ability to limit the funds disbursed. With a digital prepaid card, the payout is available for immediate use and can even be loaded into a digital wallet. With both virtual and prepaid cards, organizations retain recourse if a payment is made in error or in the event of fraud. For instance, if a supplier short-shipped an order or a contractor failed to complete the expected work, the company could retract or adjust the payment. Fraud risk is further reduced, as no bank account information is exchanged when using virtual or prepaid cards. “The card can come completely hashed, so nobody is disclosing any financial information on either side of the two counterparties, and you've got the value added of potentially mitigating cash management goals on buyer and seller side,” Thomas said.

Digital cards saw a significant boost in adoption during the pandemic, initially driven by necessity. However, it quickly became clear that hygiene was just one of many benefits—and not even the most compelling one. Both consumers and retailers have found digital to be faster, more cost-effective, and more efficient than traditional physical options. In a PaymentsJournal podcast, Fiserv’s Wesley Suter, Senior Director of Product, and Kush Patel, Senior Product Advisor, as well as Brian Riley, Co-Head of Payments at Javelin Strategy & Research, discussed the advantages digital cards offer over their physical counterparts, and how banks can tap into those strengths. The Card-Not-Present World Post-pandemic, the world has shifted from predominantly card-present to card-not-present transactions. Consumers can now order groceries from the comfort of their couch, then drive to the store where someone loads them into the car. There’s also been growth in digital acceptance at the point of sale, as merchants adopt tap-to-pay systems. “Roughly 30% of in-person transactions are click-to-pay or digital wallet transactions, and that's going to grow to over 50% in the next couple of years,” said Patel. “Anecdotally speaking, I live in a neighborhood where our restaurant association has gone completely cashless. Tap-to-pay and digital wallet transactions are very important to cardholders, not just at home but when they're shopping in stores and at restaurants.” Beyond shopping, businesses are working to make it easier for cardholders to digitally complete tasks that were traditionally done through human interaction. That can include something as simple as activating a card or more complex and curated experiences like disputing a transaction. Ultimately, it's not just about making cardholders’ lives easier, but making it easier for them to do business with issuers. Engaging customers to the point where incorporating digital tools becomes a part of their routine sets the stage for stickier relationships, cross-selling opportunities, and deeper engagement. “When you see the throughput that the integrated experience has with the debit and credit card portfolios, you start to think about the foundational aspects of card management,” said Suter. “How do we get those cards not only in their hands, but active and used. With the integrated model, we have seen digital banking platforms increase 5% to 7% month over month in activation and usage.” Integrating Debit and Credit One area in which digital platforms have made a difference is in integrating credit and debit accounts. Issuers used to treat debit card holders differently from credit card holders. They might ask a debit card holder to download an app to manage their card, but if that same user had a credit card from the issuer, they could be directed to a third-party website to make a payment or view statements. “It's not the consumer's problem how the silos might exist in different companies,” said Riley. “To them, it's a card that they want to use to conduct a transaction. Whether they want the money to come out of a bank account with a debit card or to use a credit line, making that whole process seamless is important.”   By unifying debit and credit accounts, digital platforms make it easier for cardholders to do business with their issuer. It also better positions the bank to cross-sell between the two accounts. Creating More Engaged Customers Another advantage for issuers is that cardholders who can quickly access their funds tend to transact more frequently than those who are less digitally engaged. Credit card transactions were once primarily for big-ticket items, but thanks to digital cards, we’re now seeing an increase in smaller transactions across debit and credit. This results in greater engagement in terms of transaction volume and overall portfolio spend. They also give cardholders more uninterrupted access to their funds.

When a financial institution’s customer is tricked into sending a payment, there has often been little recourse for the victim. As credit push fraud becomes increasingly prevalent—amplified by sophisticated technologies—the financial services industry must strengthen its protections. This is why Nacha has developed a framework of fraud management rules that will go into effect next year. In a recent PaymentsJournal podcast, Devon Marsh, Managing Director, ACH Network Rules & Risk Management at Nacha, and Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research, examined the requirements of the new rules and the steps financial institutions can take to comply and better protect their customers. Attacking an Emerging Fraud Trend Many bad actors have shifted away from attacks like account takeovers because financial institutions have implemented more robust fraud defenses. As a result, the path of least resistance now runs through the end user, as evidenced by the rise of automated push payment (APP) fraud. These social engineering attacks have become increasingly convincing, with cybercriminals leveraging artificial intelligence and cybercrime-as-a-service tools. The sophistication of these attempts makes it difficult even for well-informed users to distinguish scams from legitimate communications. “Recently, from personal experience, I've been getting more communications from the financial institutions that I do business with, alerting me of the various types of new scams to be aware of—many of which seem to involve credit push payments or authorized payments,” Tavilla said. “These include impersonation of a bank or sending SMSs with links that often express an urgency,” she said. “Last week I got a number of them saying I owed toll payments for states that I never even visited.” As one of the most predominant payment methods in the U.S., ACH transactions are a common target for criminals. Nacha recognized this threat and began developing its fraud monitoring and risk management rules in 2022. “We took an approach to develop a risk management framework to attack a developing, emerging fraud trend in credit push payment fraud,” Marsh said. “The risk management framework was well-received; we proposed some rules, the industry approved them, and that's where we are today. We have some rules that have been implemented and then some that are pending implementation in 2026 to address credit push fraud.” Risk-Based Processes and Procedures The rules going into effect next year pertain to transaction monitoring, instituting a requirement for originators, third-party senders, and originating depository financial institutions (ODFIs). The framework requires fraud monitoring for all transactions, including traditional and Same Day ACH. Under the framework, all ACH Standard Entry Class codes for both debits and credits must be monitored. This monitoring need not be completed prior to processing payments. While monitoring prior to processing is ideal, it is not required by the rule. “It's ideal if it's done prior, but what the rule calls for are risk-based processes and procedures to detect fraudulently initiated payments,” Marsh said. “There's a separate rule—it's very similar—but it requires receiving depository financial institutions to monitor incoming credits that they receive.” One of the most important aspects of the new regulations is that they require all financial institutions to institute processes and procedures—not technical solutions. “That's great if an organization wants to implement technology, but the rule would certainly allow for manual processes and existing processes—as long as they take that risk-based approach, they are documented processes, and they are effective within the organization's risk tolerance,” Marsh said. Assessment and Analysis The first step for many financial services companies is to conduct a risk assessment and establish their r...

For years, many businesses proclaimed they would never transition their payments to SaaS. Even as everything else moved to the cloud, financial professionals remained adamant that payment services and data would stay in-house. The data was considered highly sensitive, and few were willing to risk storing it outside their walls. But the benefits of Payments-as-a-Service (PaaS) have upended that thinking. More organizations are now realizing that leveraging external providers is transforming their payment structures—both for today and the future. In a Payments Journal Podcast, Mike Vigue, Head of Product at Finastra, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed how Payments-as-a-Service can give organizations of all sizes access to the latest technology, enhancing resilience and agility while enabling mid-market clients to compete with much larger institutions. Staying Ahead of the Curve Payment modernization is often viewed as a destination—a point at which payment operations will eventually arrive. In reality, there is no endpoint. Technology, regulations, and customer expectations will continue to evolve. Future changes will require systems that are not monolithic, but agile—enabling developers to build solutions that have yet to be conceived. While the exact direction of change is uncertain, it’s clear that tomorrow’s requirements will call for systems that are more modern. That means being cloud-native, API-first, and event-driven. According to Vigue, organizations that aren’t allocating 20% to 25% of their roadmap to maintaining modern infrastructure and technology risk falling behind. And the further they fall, the harder it becomes to develop new features. Staying modern enables technology to do more—and to do it faster. Changing on the Fly Nobody has the luxury of stopping time for a year and a half to develop a new platform. PaaS offers modular solutions like microservices that allow teams to modernize one piece of the application at a time and isolate service failures from bringing the entire application down. The process involves extracting a particular payment rail out of the platform, developing it in a new modernized way, and then integrating it back into the existing infrastructure—until the team has time to update the rest. “When I talk to certain customers, particularly about ACH for example, they're nervous,” Vigue said. “How can you take a bank that's doing like 300 million ACH transactions a year off of an application that's been in their business for 15 years, runs off a mainframe and put it on some modern system without bringing the bank to its knees?” “ACH is 50 years old and it's kind of been neglected, because banks all have the same technology,” he said. “There's not a lot of difference in what you get from functionality there. But you can differentiate your services by modernizing them. We're going to see some changes coming, particularly in 2026. For example, there's an upcoming mandate from Nacha to do fraud scans against ACH payments. I heard a quote recently that 44% of banks are thinking about looking at their ACH infrastructure over the next 18 months.” 1 According to Wester, the goal is to reach a point where you can start anticipating some of the changes. “Some of those changes are going to be things that you think that you already do well now,” Wester said. “It's not just about being prepared to do whatever is coming down the pike, it's also about how you can improve things you've been doing for a very long time.” These newer tools can result in a more modernized and responsive infrastructure, as the systems are built on today’s architecture rather than that of 15 to 20 years ago. While legacy applications currently offer more functionality, AI can help them catch up and modernize their technology faster. Resilience and Agility One key benefit of PaaS is resilience—keeping the payment system operational no matter w...

Organizations routinely ask employees to take clients out to lunch or attend industry conferences. Yet the expense management process designed to support these essential functions is often manual, time-consuming, and prone to delays, errors, and misuse. In a recent PaymentsJournal podcast, Susie Shyatt, Business Development Executive at B4B Payments, and Hugh Thomas, Lead Commercial Payments Analyst at Javelin Strategy & Research, discussed the common challenges businesses face in managing expenses—and how embedded payments can help streamline this inefficient process. Expense Reimbursement Vs. Corporate Cards One of the most common issues in the expense management process stems from employees being required to use their own funds to cover company expenses. First, this means the employee must have sufficient funds available—something that can be a challenge for costly business trips involving airfare and hotel stays. Another issue arises once the employee returns, as they must provide documentation for their expenses, which then needs to be manually processed. This can lead to delays or errors in reimbursement. There’s also the risk of abuse in the process—something that, in some cases, has even been inadvertently encouraged by management. “With some companies that we've worked with in the past, their C-level groups are touting the ability to get points and earn rewards using personal cards as a benefit to new hires,” Shyatt said. “Whereas the HR and payroll and finance people see it as a headache, where they're having to reimburse without knowing exactly what all of the payments are being utilized for.” These challenges with expense reimbursement have led many companies to adopt corporate cards. However, company credit cards can present hurdles of their own. “At the end of the month, you have to take this big bundle of receipts and photocopy them and get it back to somebody who then has to look through all that stuff and sign off on it,” Thomas said. “It creates tons of extra work for the payables department. It creates extra work for the payroll department. Frankly, it's not anywhere as safe or compliant a way to buy on behalf of a company as when you're having somebody submit their own personal expenses.” Embedding for Speed and Visibility Among all these pain points, one of the biggest barriers to streamlining the expense management process is that organizations are often unaware of just how inefficient it really is. Multiple groups within the same company may be involved, resulting in a fragmented, manual solution where items can easily get lost in the mix. As a result, the expense management process becomes frustrating not only for finance office staff, but also for employees. “Especially as younger generations have entered the workforce, they're used to everything being quick in their personal lives,” Shyatt said. “You can go to a restaurant with 15 people and after one person puts it on a credit card, within seconds, everybody has paid that person back. It's very confusing why a work payment should take so long, when I can make a transaction on a website, and everything is there in seconds.” Payments technology is the reason these interactions are possible. Much like the innovations that allow roommates to seamlessly split a rent payment, embedded payments can be used to accurately reimburse an employee for a hotel stay. Additionally, embedded solutions can equip employees with the tools they need to manage expense activities upfront, which can help mitigate concerns about payment delays. Embedding payments into the expense management process also brings substantial benefits to organizations. While this technology likely won’t replace staff members, it can reduce the amount of time finance personnel spend processing expense documentation—freeing them up to focus on more strategic tasks. It also gives organizations greater control over how funds are being spent.

The relationship between financial institutions and small businesses has grown increasingly strained. Many small businesses are becoming dissatisfied with their payment and banking services. In fact, more than half obtain their merchant payment accounts from providers other than their primary bank. In a PaymentsJournal podcast, Fiserv’s Tim Ruhe, Head of FI Payment Strategy, AJ Levin, Senior Director for Small Business Market Strategy, and Don Apgar, Director of the Merchant Payments Practice at Javelin Strategy & Research, discussed why small businesses are turning to fintechs for payment services and what banks need to do to remain competitive in this critical market. Fragmented Relationships Research shows that small businesses are turning to multiple providers—typically three to five fintechs—to meet at least one of their financial needs. This means they're stepping outside their primary financial institution and relying on nonintegrated solutions—a complex and fragmented approach. To run their day-to-day business, they're spending nearly 20 hours a week on cash flow and financial processes. Part of this burden stems from juggling so many different providers. “They're fragmenting their relationships, going to multiple places to serve their banking and payment needs,” said Ruhe. “They're not getting everything in one place the way we would like them to. If you ask them how they pay and get paid, you generally hear a pretty incredible fragmented journey and to me that leads to: OK, there's some work to be done. It's not enough to just have a lending product and a bill pay product, we need solutions tailored to the needs of those small businesses.” Take invoices, for instance. Many small businesses still send paper invoices but want to move to electronic invoicing and receive payments digitally. Ideally, they’d do that through their financial institution rather than a fintech, so the bank has visibility into where deposits are going. That's an area where banks haven't competed as well as they could. Fintechs and banking-as-a-service providers are gaining ground by leading with specialized offerings in niche categories, then expanding into payments. Before long, they start pulling customers away. To prevent that, banks have to make sure they’re offering the right solutions to protect against that. Small Business Is a Tweener Historically, banks have served small businesses using a mix of consumer and commercial mid-market products. Small businesses have to choose between consumer services—which are intuitive and easy to use but lack advanced capabilities—and commercial banking services, which are typically geared toward businesses with hundreds of millions in revenue and dedicated staff to manage payables and receivables. Small businesses are a tweener segment. They have merchant services, invoices, accounts payable, payroll cards, and loans, but they still need the simplicity of consumer banking. Often, the staff is just the owner and an accountant. They don’t have the time to learn new tools. If using their bank requires a learning curve, they're likely to move on. “That ultimately is the conundrum we've seen with financial institutions not having a dedicated small business solution,” said Ruhe. “We saw the seismic shift in real-time payments and mobile 10 or 15 years ago. Should banks offer P2P services? Now, it's no longer a question. This is in the same category. Should we have a small business-focused integrated payment capability? Increasingly the answer is yes.” These are revenue generating services. Small businesses expect to pay for quality solutions—whether it's invoicing, expedited payments, real-time payments, or the ability to pay with a card to better manage cash flow. Fintechs are actively monetizing many of these revenue levers, while traditional financial institutions are not. “For folks that have been in the merchant services space for a while,

The traditional model of biweekly or monthly physical check payouts is rapidly becoming a thing of the past. For businesses, moving away from checks results in lower processing costs and a reduced risk of check fraud. While direct deposit offers clear benefits for employees, it’s not always their preferred method of receiving pay. In today’s competitive labor market, an organization’s compensation model can serve as a key differentiator. In a recent PaymentsJournal podcast, Kristin Ridgway, Vice President of Treasury and Payment Solutions at U.S. Bank, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed the changing compensation landscape and the growing role prepaid solutions play in attracting and retaining talent. “When we think of prepaid it becomes about gift cards—giving money away—and self-use,” Hirschfield said. “The payroll card opens up a window of opportunity that can expand almost exponentially in terms of all those things you can do for yourself.” A Window of Opportunity The need for more flexible payroll options is increasing. Businesses often have teams composed of various types of employees, not just long-term, full-time staff. In many cases, the traditional check and direct deposit model can complicate payments to a workforce with high turnover or those consisting of a mix of full-time employees, contractors, and seasonal workers.  “Prepaid payroll cards can reduce costs and administrative work by minimizing paper checks, and offer greater flexibility in delivering payments as needed,” Ridgway said. “Providing more payment options can improve the likelihood that workers will choose to continue working with that company.” Building strong relationships is especially important with gig workers, who are often critical to an organization’s everyday operations. The rise of digital payments has led consumers to increasingly expect flexibility—nowhere more so than in the growing gig economy. Most gig workers don't work traditional hours or fixed schedules, so they don’t expect their payments to follow a traditional model either. “If you think about a rideshare driver or an Instacart shopper, many want or need to have access to their pay as soon as they've finished their shift or the job,” Ridgway said. “With a traditional payroll system, they might not see those earnings for a week or more. With earned wage access and real-time payments to prepaid cards, they receive their money instantly by loading it to the card and could use it to buy gas or groceries or whatever that same day.” Since many gig workers contract with multiple companies, prepaid accounts that support payouts from multiple sources are especially valuable. Similarly, a full-time worker who picks up gigs on the side can conveniently receive all their earnings on a single card. Beyond the gig economy, full-time employees also have the option to direct a portion of their paycheck to a prepaid card. For example, a worker might allocate $100 from each pay period to save for the holidays, budget for dining out, or plan for a big-ticket purchase. Even at companies with high direct deposit participation, a secondary prepaid account can offer added value and engagement. While an employee may initially use the prepaid card to save for a vacation or receive a gig payout, the card remains active and can support a range of future needs. “There's an interesting opportunity to have that worker who has multiple work opportunities—maybe one's full-time and one’s a gig—to have funding onto a similar source,” Hirschfield said. “They want to be able to use that money exactly how the merchant, or wherever they're going to spend it, is accepting it. Tying that in is really a critical need, not just a want in this environment.” Retaining Well-Versed Employees Paying employees in their preferred payment type is important as more consumers become well-versed in the digital economy.

Community banks are the heart and soul of their localities, often providing the spark that helps small businesses achieve their goals. However, the emergence of new technologies in recent years means that more financial services companies are vying for a share of the smaller institutions’ markets. In a recent PaymentsJournal podcast, Matthew Wilcox, Deputy Head of Financial Institutions Group and President of Digital Payments at Fiserv, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed how community banks can select and implement relevant technologies and utilize the banking-as-a-service (BaaS) model to deliver a unique experience. A Definitive Role In addition to heightened competition, financial institutions are now serving a tech-savvy customer base with elevated expectations. Features like digital wallets, faster payment methods like Zelle or Same Day ACH, and account aggregation are increasingly becoming table stakes for every institution. For many community banks and credit unions, incorporating all of these features can be a daunting task. However, in most cases, they don’t have to be a one-stop shop for every financial service. “Many of the institutions that we're seeing in this banking-as-a-service movement—if I can call it a movement—are the community banks,” Wilcox said. “They're singling out specific use cases that they could play a role in. They're utilizing their infrastructure and their technology to be a part of that equation of banking-as-a-service. We're seeing a definitive role for community banks in banking-as-a-service, given their ability to focus in on it.” Organizations can zero in on niches thanks to the modular nature of the BaaS model. This allows smaller financial institutions to launch new financial products quickly, without requiring substantial capital investment or facing major regulatory hurdles. A community bank, for example, could use this system to significantly diversify its product line. However, given the rapid pace of innovation in the market, community banks must never lose sight of the factors that make them unique when expanding their product offerings. “Community banks are not trying to solve for everything, but for the right things,” Wilcox said. “They are focused in on solving for what type of innovation and technology is important to their communities. What are the partnerships and the adoption of technology that they need to be focused in on?” Finding Technology Evangelists Implementing new technologies will largely come to fruition through partnerships with financial technology firms. Through these fintech relationships, institutions can introduce features like contactless payments, real-time payments through FedNow or RTP, tokenization, and digital wallets. Two of the most powerful technologies in recent years have been artificial intelligence and cloud computing. A community bank might partner with a provider offering AI-driven fraud detection solutions or adopt cloud service to better organize and secure customer data. “It's about finding a solution for a community, not trying to be all things to all people, but focusing in on what is most critical, whether it's their geography or the banking space that they’re serving,” Wilcox said. “It’s about community financial institutions using their relationships to their strength.” While external partners will play a critical role in most banks’ strategies, a shift in mindset will also be necessary when it comes to building and empowering internal teams. “Community banks are tremendous when it comes to financial acumen, but they are going to need technology evangelists within those community banks to focus specifically on the things that they need to innovate on,” Wilcox said. “The talent that a community bank is going to have to start recruiting is going to be different than the type of people they recruited five to 10 years ago.”