From Reaction to Prevention: Rethinking Payment Fraud

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.”

[contact-form-7]

The post From Reaction to Prevention: Rethinking Payment Fraud appeared first on PaymentsJournal.

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.”

[contact-form-7]

The post ACH and the Path Toward Future-Ready Payments appeared first on PaymentsJournal.

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.”

The post Not Just Another Bank: How Credit Unions Can Reach Younger Members appeared first on PaymentsJournal.

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 you have either become victims of scams or they’re holding illegal money from scams.”

“Banks are becoming very aware of it and at the highest levels they are making it their KPI to combat this entire ecosystem of different scam typologies and different attack vectors so that they can make their base more profitable and have better quality deposits,” he said. “That’s where my hope is that this trend continues, where banks are getting more aware of what needs to be done and taking action.”

The post Escalating Scams Demand a Dedicated Response appeared first on PaymentsJournal.

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 post How Developers Are Driving the Future of Embedded Payments appeared first on PaymentsJournal.

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, bolstering loyalty programs, and diversifying marketing efforts are all critical lessons from the holiday season that can be applied year-round.

“What I would say is, going into 2026, really watch where your consumer is,” Kositzke said. “Watch where they’re researching, watch the way in which they’re speaking to AI about what it is that they’re looking for, and find a way to be present. We talked about TikTok, YouTube, Cash App, and all these different sites. It’s making sure you’re staying relevant where the consumer is, that’s going to be very important in 2026.”

To learn more, check out BHN’s 2025 post-holiday gift card report infographic, How holiday shoppers adapted to affordability challenges. Just click here.

The post The Gift Card Shift: From Convenience to Core Shopping Strategy appeared first on PaymentsJournal.

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.”

The post From Cross-Border Payments to Community Banks: The Future of Zelle® appeared first on PaymentsJournal.

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.”

The post Stablecoins and the Future of B2B Payments: Faster, Cheaper, Better appeared first on PaymentsJournal.

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 channels, there’s more payment types, and payment methods that are out there. That makes payments orchestration all the more important as we go forward. Number two is AI. It’s been a big topic and we’ll be implementing methods to use and leverage AI to address those challenges.”

“Number three is agentic commerce, which has become a strong topic—and will continue to be—because it is at the crossroads of all those things,” he said. “When we think about multi-acquirer and multiple payment methods—we’re leveraging AI and we’re leveraging crypto potentially along with those things—it’s bringing that all together in one single place. It’s an exciting time to be in payments.”

Get a copy of the survey findings in the report Unlocking Opportunity: How Payments are Powering Merchant Growth

The post Multi-Acquiring Is the New Standard—Are Merchants Ready? appeared first on PaymentsJournal.

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.

The post What’s Driving the Rapid Growth in ACH Payments appeared first on PaymentsJournal.