PaymentsJournal

PaymentsJournal

Payments Content, Expert Insights and Timely News

  1. 18h ago

    When Payment Choice Becomes the Expectation

    No one likes waiting for a check to arrive in the mail. Today’s consumers are accustomed to instant, digital experiences, and those expectations extend to payments. Whether they’re receiving a refund, reimbursement, or settlement, recipients expect fast, secure and flexible options. That shift is prompting organizations to rethink how they disburse funds, with prepaid cards emerging as a practical option for many use cases. By giving payees more direct ways to receive their money, organizations can reduce reliance on paper checks while improving access to funds for recipients. In a PaymentsJournal Podcast, U.S. Bank’s Ashley Downey, Treasury and Payment Solutions Senior Product Manager and Kristin Ridgway, Prepaid Payment Solutions Consultant, as well as Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, discussed how modern payment hubs can help organizations reduce costs, improve security, and provide recipients with greater choice. By moving payments away from paper checks and toward prepaid cards, payors can simplify disbursements while improving the payment experience. Moving Away from Checks Despite the continued shift toward digital payments, many companies still reflexively turn to paper checks for disbursements. Paper checks remain an expensive and inefficient payment method. The cost per check can exceed $4, with some estimates reaching as high as $20. “Think about all that goes into printing checks—the postage, labor, manual approvals, stuffing envelopes, tracking lost mail,” said Ridgway. “Probably the most time-consuming and expensive is check fraud. As they move those payments to prepaid cards or other pay methods, all those issues are eliminated, especially the fraud.” Checks have become less convenient for payees as well. Consumers expect speed and convenience in nearly every aspect of their lives, making a trip to the mailbox and a stop at a check-cashing location feel outdated—especially when additional fees may be involved. Fortunately, organizations have a growing range of alternatives to paper checks, including prepaid cards, payroll cards, digital payments, and even peer-to-peer services like Zelle. “All of these things are part of the arsenal every recipient uses, and they need to get those funds where they need it and as quickly as they can,” said Downey. “Having that access is key to consumers’ ability to take hold of their own personal finances.” The Benefits of Prepaid For recipients who may not have a traditional bank account—or simply want immediate access to their funds—prepaid cards can offer a practical alternative to paper checks. “Why do people use prepaid cards for themselves?” said Hirschfield. “People feel like it’s a safer option versus checks or cash. But it also turns immediately into the ability to access the money. It’s much easier to use a card on an open loop rail, especially when you’re under banked, when you have poor credit and don’t qualify for a credit card.” There’s also compliance consideration. Uncashed checks must be tracked, reported, and remitted to the state, creating additional administrative burden and audit exposure. “When a payment is made to a prepaid card, we handle statement responsibility according to the state where the recipient resides,” said Ridgway. “We take that burden away from our clients when the payment is made to a prepaid card.” A Focus on Flexibility In most cases, payee preferences and payment use cases help determine the optimal payment method. What U.S. Bank has found works well for its clients is conducting an assessment of who they’re paying and why they’re making those payments. There may be situations where funds are urgently needed, such as providing food or services to victims of a natural disaster. Or a business might have a vendor on-site who needs payment in hand before leaving. The ways those individuals prefer to receive payment could be very different—and critical to their missions. Increasingly, customers are demanding not just faster payment methods but also more payment options. The challenge for many organizations is that they may not be prepared for that level of complexity. One emerging solution is a single disbursement platform connected to multiple services and tools, such as U.S. Bank’s Payee Choice. A decision engine can process each payment and determine the ideal outcome for both the payor and the recipient. “We simplify the process so the end recipient doesn’t have to fully know or understand all the options available to them,” said Downey. “We use what information we receive from the client to best identify what solutions or payment methods best fit that recipient. “A good example of that is Zelle,” she said. “We can identify if a person is already enrolled in the Zelle network using the aliases provided by the client. And we can suppress showing that option to individuals who aren’t already enrolled. If they are enrolled in Zelle, click this button, you’ll get the payment in minutes. That’s just a better experience.” Protection from Fraud As organizations evaluate their payment mix, security has become just as important as efficiency and consumer preference. Fraud continues to be a major concern in the payments space, with paper checks remaining a primary target for criminals. Providing alternative payment options can help reduce that exposure while giving recipients greater choice. “Any type of electronic and card payment gives a much deeper programmatic fraud management solution,” said Hirschfield. “There are many more steps needed to protect these programs.” Having multiple layers of fraud prevention built into the process minimizes the need for organizations to collect and store sensitive data, thereby reducing their exposure and risk. Payee Choice continuously monitors for fraudulent activity. “We’re validating that person is the rightful owner of the account that’s being linked for payment for ACH or an instant payment, for example,” said Downey. “For Zelle, we can do a name match as well. And we’re making sure we’re preventing any misguided payments.” Final Thoughts Paper checks are becoming increasingly disconnected from how recipients actually want to be paid today—particularly among younger consumers who have never used them.   “We live in this digitally-native society—especially younger generations,” said Hirschfield. “Having these options to have any kind of digital payment or electronic payment is critical.” Offering payment choice helps close that gap, reducing friction for recipients and operational complexity for organizations.   “It’s been really powerful to have our customers move away from issuing checks and manual processes to be freed up to work on other things at their business,” said Downey. “Helping those clients move from just thinking about a payment solution and being able to drive overall improvement for them has been really successful.”

  2. 1d ago

    Why Crypto Will Be the New Standard for Global Payouts

    Many companies expect gig workers to deliver fast, reliable work—but the way they’re paid often tells a very different story. Behind the scenes, payouts can lag days or even weeks, get chipped away by fees, and disappear into layers of currency conversion and compliance hurdles that most contractors never see coming. This gap between real-time work and delayed compensation becomes even more pronounced in cross-border payments, where long-standing friction points persist: settlement delays, hidden costs, currency conversion, regional regulations, and limited visibility into where money actually is at any given moment. In a recent PaymentsJournal podcast, Kate Lifshits, CEO of NOWPayments, and James Wester, Director of Cryptocurrency at Javelin Strategy & Research, discussed the many ways in which leveraging digital assets for payouts can create a more effective solution. Not only can crypto payouts address operational challenges, but implementing efficient global payout systems can also be a key differentiator when it comes to attracting and retaining vital talent in a competitive market. The Operational Pain Points The issues with cross-border payments only intensify as organizations scale high-volume international payouts. Although cost is often the most visible concern, many of these expenses are not immediately obvious. “It’s not the payout itself that costs a lot, it’s the operational overhead that comes with this payout,” Lifshits said. “There are things like reconciliation, operational failures, and support tickets that come with failed payouts, and all kinds of manual operations are needed. If we’re talking about 100 payouts, it’s one fee. If we’re talking about 100,000 payouts, it’s another fee because at scale we’re talking about additional infrastructure.” Understanding fee structures is just one aspect of the broader operational complexity facing finance teams at global organizations. These teams must manage multiple banks and fiat currencies while continuously staying current on regional regulatory, tax, and compliance requirements. While this is challenging for organizations, payout inefficiencies can be even more detrimental for contractors. One of the biggest obstacles for small businesses—and especially freelancers, creators, and gig workers—is cash flow. Budgets are often stretched thin after covering supplies or subcontractors, and financial pressure can rapidly escalate when payouts are delayed, inaccurate, or subsumed by fees. Unfortunately, all of these issues are common in the current payment system. “The system itself was built by banks for banks, for their convenience and not for either end of the transaction,” Wester said. “It’s not built for the sender. Tthe sender has to figure out the complexity, they have to figure out where it’s going, and they have to figure out the cost. And the recipient, it’s definitely not designed for them because they have to wait. They are the ones where often the fees are built into whatever it is that they received.” Translating Speed into Trust These payment challenges don’t align with current customer expectations. When users can send peer-to-peer payments almost instantly with full visibility in a seamless digital experience, traditional cross-border payment systems can feel archaic. “They want settlement and they’re even beginning to understand the differences between when a payment is made and when a payment settles,” Wester said. “They are expecting that settlement to be immediate. Nobody wants to wait for a payment to clear anymore, you don’t want to hear that phrase. You just expect a payment to happen and the money to move and for it to be available in an account right away.” For their part, many organizations want similar clarity on the other side of the transaction, since understanding cash flow is essential to operations. However, the complexity of cross-border payments—combined with managing multiple platforms, freelancers, and contractors—makes it difficult to track cash flow accurately. This creates a difficult environment, because organizations that rely on gig workers and contractors at scale understand that speedy, reliable payouts are the lifeblood of their business model. “In this case, speed translates into trust and reputation and that in its turn translates into bigger volumes, because speed means that the users will trust this provider or this business—whichever is sending the payouts—and that in its turn will bring in more usage,” Lifshits said. “It all goes together.” Improving the Economics of Global Payouts As merchants increasingly recognize the importance of efficient payouts, many also acknowledge that current cross-border payment systems fall short of expectations. Digital assets can provide near real-time payment and greater transparency, while often reducing currency conversion friction and regulatory overhead. Perhaps most importantly, crypto payments can help reduce the spiraling costs of global payouts. “It’s different with crypto payment gateways because they can help scale without ballooning the fees. The fees stay the same even with a big scaling,” Lifshits said. “All the pain points could be dealt with in this traditional infrastructure, but it will cost very, very much. But if it’s a crypto payout infrastructure, the fees will be what they are supposed to be in a world that makes sense.” At the center of this infrastructure is the crypto gateway, which bridges payments processors and merchants. While early crypto gateways were little more than a “Pay with Crypto” button at checkout, modern systems have evolved into sophisticated payment orchestration platforms that optimize routing while maintaining compliance. Crypto gateways have become essential for managing the many components of the digital asset ecosystem, including cryptocurrencies, wallets, integrations, and infrastructure layers. This is transformative for organizations that are drawn to the cost and efficiency benefits of digital assets but hesitant about operational complexity. These gateways also address one of the most significant barriers to adoption: volatility. Crypto gateways allow merchants to choose how actively they manage digital assets, from fully automated conversion to more hands-on control. All these advantages make crypto payouts as user-friendly as other payment tools in a merchant’s stack. “Crypto is not something now that a business needs to look at and think that is different from the standard way of doing things,” Wester said. “It has become a standard for business-to-business payments, and it is not something that is strange or foreign or weird or exotic. It’s a standard tool for making payments and has become so very quickly.” Changing Business Economics Crypto has been adopted rapidly in part because it often offers a more efficient alternative to many traditional payment methods. However, the benefits of using digital assets for payouts extend beyond cost reduction. “If you think about gig economy marketplaces or about any time there has to be a payout, when you think about making that payment better, faster, and cheaper, it becomes something that those businesses can now use as a competitive advantage,” Wester said. While crypto gateways are powerful tools, they were not entirely fee-free—until now. NOWPayments recently introduced zero-fee payouts with near-instant processing for wallets within its ecosystem. This solution is designed for high-volume global operations and delivers meaningful improvements in efficiency and scalability. Beyond reducing costs, NOWPayments introduces a new value proposition for partners: the ability to generate additional revenue when their users engage with ChangeNOW PRO. This makes NOWPayments the first crypto payment gateway to enable partners not only to accept payments, but also to participate in and benefit from the broader ecosystem. Along with settlement times of roughly a second, zero-fee payouts and new revenue opportunities present a compelling alternative—even compared to already low-cost crypto gateways. “The problem here is that every fee looks small until you scale it and multiply it by millions or billions of transactions,” Lifshits said. “The small businesses that are scaling to become big businesses, they will face issues even if the fee is $0.01.” “That is why our zero-fee instant payouts are meant to change business economics, because they’re free, they are available to everyone, and they’re instant. And that means lower operational costs and a far better user experience,” she said. “It’s not even about reducing costs or saving money; it’s about enabling new business models and new revenue streams.”

  3. 2d ago

    What Happens When a Credit Union Outgrows Its Accounting System

    As financial institutions merge and evolve, the pressure on back-office operations grows just as quickly as it does on member-facing services. Accounting teams that once relied on manual processes and patchwork systems are now expected to deliver greater accuracy, faster reporting, and the flexibility to support future growth. As a result, many banks and credit unions are reevaluating whether their current accounting platforms can keep pace—and looking for partners that can support both today’s demands and tomorrow’s challenges. In a PaymentsJournal Podcast, Kellie Rychwalski, Chief Financial Officer at Del-One Federal Credit Union, Kandra Person, Senior Solution Consultant at Fiserv, and James Wester, Co-Head of Payments at Javelin Research and Strategy, discussed the accounting solutions available to financial teams today. Newer platforms have made significant advances compared to the way things were handled in the past. “I was just looking for efficiencies,” said Rychwalski. “Simply being able to attach a PDF of an invoice to an accounts payable or fixed asset transaction instead of filing is a huge time saver.”   Seeking a Platform with Greater Functionality When Rychwalski joined Del One in 2012 as the Director of Accounting, she found an integrated general ledger (GL) system that lacked much of the functionality the credit union needed. “We were looking for something that was core agnostic,” said Rychwalski. “We knew that we would be changing data processors or core systems at some point, and didn’t want to have to continuously move the GL.” Del-One eventually selected Fiserv’s financial accounting and finance operations platform, Prologue, in a hosted environment. The credit union would receive full support from Fiserv, and if they changed core systems in the future, they wouldn’t need to replace the entire GL again. When the credit union merged with Louviers Federal Credit Union and migrated its GL into Prologue, the transition was easy for the team to absorb. From day one, they were able to produce consolidated financials without waiting for the operational merge date. “We could still balance to the different core processors of their different outside vendors, but we could bring our financial statements together as one consolidated financial statement,” Rychwalski said. “For the person who spent two months manually combining them, that was a really big deal.” Streamlining Approvals The sheer volume of AP that flows through a thriving credit union can be daunting. Prologue helps alleviate the burden by assigning approval limits, connecting the appropriate invoices to each transaction, and routing everything through the approval workflow automatically. It eliminates the need for staff to chase down approvals manually. “The system knows that anything over $100,000 has to go to my supervisor, so it’ll come and get my approval and then it’ll send it over to my supervisor,” Rychwalski said. “Nobody is running around trying to make sure they got all the signatures, and the actual transaction has the invoice and approval history attached to it.” Prologue allows Del-One to establish policy limits that determine who can approve transactions and at what amounts. If an amount requires a second approval, the workflow automatically routes it to the appropriate person. Instead of tracking down signatures on paper invoices, approvals are connected digitally from the start. “Many of the prior processes were ad hoc processes that solved the problem when they were first developed, then they just became standard operating procedures,” said Wester. “Having a system that can automate that and make people more efficient gives you more time to do other things that are more important to the business.” Moving Beyond a Patchwork System Many legacy systems exist only in the minds of long-time employees. Rychwalski explained that previous budgets were prepared through an elaborate network of spreadsheets—a process that was not only unsustainable, but also difficult to transfer to others. “I needed something that would calculate interest income and expense that would allow me to project based on rates,” Rychwalski said. “And that’s what Vantage brought to us. I’m able to project that if the rates go up, this is the way it’s going to look. I can build formulas.” The previous spreadsheet process consumed a tremendous amount of time, both in maintaining the files and in training others. It also created accuracy issues, since manual processes inevitably introduce human error. “The accuracy also increases because Vantage brings in the account level detail, the instrument level detail from those cores,” Person said. “With it being core agnostic, it’s bringing in all that detail to calculate all the cash flows for those specific investments, loans, shares, and deposits.” Ready for the Future Organizations investing time and money into these products must understand that proper mapping is critical. Teams need to understand how the GL is structured, what accounts are grouped together, and how to maintain consistency while still leaving room for future changes and growth. “You’re going to create products that you haven’t thought about yet,” said Rychwalski. “You have to be able to understand how to update new products, create new products, and change the ones that you have.”

  4. 6d ago

    The Missing Piece in Banks’ Identity Protection Strategy

    Every bank wants to earn its customers’ trust. Today, protecting customers’ identities is just as important to earning that trust as safeguarding their money. Too many financial institutions, however, still treat identity protection as an afterthought. They fail to recognize that identity protection is not only a cybersecurity imperative but also a powerful driver of customer loyalty and engagement. In a PaymentsJournal Podcast, Javelin Strategy & Research’s Tracy Goldberg, Director of Cybersecurity, and Dylan Lerner, Senior Analyst of Digital Banking, discussed the opportunity for banks and credit unions to offering identity protection services to customers and members. While these services deliver clear security benefits, financial institutions should also consider the risks of leaving customers vulnerable to identity-based attacks. As the saying goes, trust arrives on foot but leaves on horseback. Seeking Security Identity theft remains a widespread problem. Consumers are increasingly looking to trusted partners to help them navigate identity theft risk, creating an opportunity for banks and credit unions to partner with identity theft protection services (IDPS) providers. “There’s so many different ways to look at this, but at the end, it comes down to the fact that you should do anything you can to tell your customers, ‘Hey, security is important to us too,’” said Lerner. “Then all those ancillary benefits come into play.” Banks and credit unions are uniquely positioned to help consumers recover from identity theft. Not only do they safeguard much of a customer’s or member’s financial assets, but banks and credit unions also carry a reputation for stability and trustworthiness. “Cybersecurity generally is never thought of as a customer service or loyalty topic,” said Goldberg. “But consumers are telling us that when it comes to a cybersecurity incident—whether it’s a socially engineered attack like a scam or even malware that may have infected their device—they more often than not want to turn to a trusted partner like a financial institution.” Not every institution has the resources to build a comprehensive cybersecurity program that includes identity theft resources in-house. As a result, many turning to white-label IDPS solutions that provide identity protection under the financial institution’s brand. “I want the IDPS to be with my name and my branding, to not only build credibility but loyalty,” Lerner said. “There is something to be said about having a strong brand name associated with it.” At the same time, there are advantages to partnering with a third-party provider that brings strong brand recognition and established expertise. The key is selecting a solution that best aligns with the financial institution’s overall strategy and customer experience goals. Making It Accessible An effective IDPS strategy should enhance, not complicate, the customer/member relationship. Prioritizing sophisticated technology at the expense of accessibility can ultimately undermine adoption and engagement. “The most important thing in banking relationships is ease of use,” said Lerner. “Security is always second to being able to use something.” There is risk in relying too heavily on generic educational messaging. When consumers are inundated with scam alerts and warnings, they often start to tune them out. Financial institutions should leverage their own data to personalize communications and tailor recommendations to individual needs. Just as importantly, every alert should include clear, actionable guidance on what customers can do next. “So often when we look at the top 20 financial institutions, one of the missing key elements in education is making it actionable,” said Lerner. “That’s what a lot of these identity protection services provide. Rather than an identity theft kit that says, ‘Contact each of the three bureaus,’ provide a trusted provider that can help with the next step. That actionability is a big upgrade over education.” Ultimately, identity protection works best as a partnership between the customer/member and the financial institution. That collaborative approach strengthens trust and builds longer-lasting relationships. “If consumers find that identity theft protection adds value, you might find that your customers either add more products or stay with your financial institution longer,” said Goldberg. “That ancillary benefit is now available to them beyond just offering basic banking products and services that are pretty commoditized in today’s market.” Customize the Offering Financial institutions can bolster those relationships by ensuring that identity protection and other security offerings are customized. For instance, seniors may benefit from features designed for caregivers or family financial management. Other consumers with young children may have more interest in identity monitoring that includes the entire family. Different consumer segments face different risks, giving financial institutions an opportunity to deliver more relevant, personalized security solutions. “This just goes to show me that the financial institution has the consumer’s best interest at heart,” Goldberg said. “They are helping me to shore up my cybersecurity, not only within my bank account, but also in my personal life.” Financial institutions don’t have to be the experts in every aspect of identity protection. A well-chosen IDPS partner understands where consumers are most vulnerable and can identify when consumers need additional safeguards, enhanced monitoring, or offering hands-on support during identity recovery. “The more secure your customers and members are, from a cybersecurity standpoint, in their personal lives, the more secure their accounts are going to be,” said Goldberg. “And the less risk you’re going to see as a financial institution.”

  5. Jul 22

    The Case for Not Building Your Own Remittance Stack

    Entrepreneurs bring tremendous enthusiasm and energy to building their businesses, but they’re often less excited about the everyday—yet essential—tasks like building the infrastructure needed to accept and send payments. When they do tackle those tasks, they usually discover they’re far more complicated than expected. That’s why more startups are turning to outside partners to help them build remittance platforms. In a PaymentsJournal Podcast, Avinash Chidambaram, Founder and CEO of Cybrid and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed how these partners can help growing businesses with everything from compliance to building payment applications. Complications Abound There’s much more to a remittance platform than simply collecting payments. Building one typically requires significant and expensive developer resources, particularly in early-stage startups and expanding fintechs without existing systems. Challenges include onboarding, Know Your Customer (KYC) requirements, compliance, and other features that can affect or delay a launch. Further, these requirements vary depending on the business, so it’s difficult to copy a playbook across an industry. Sending stablecoins across borders, for instance, presents fraud and KYC challenges that are very different from those facing a local hardware store or even a domestic-only bill pay platform. The challenges of sending and receiving payments across borders are already complex, and they are made worse by the fact that companies must adhere to the unique compliance requirements in every jurisdiction involved.  A startup that has found customers halfway around the world has enough on its plate without also navigating the complexities of remittance infrastructure in every market where it operates. “What surprises people when they start looking at remittances or cross-border [transfers] is that all the complexities that you have in payments in one market are now multiplied for every market that you’re trying to go into,” said Chidambaram. “You have to think about all of those rules, all of those regulations, all of the requirements, all the compliance things across every different corridor.” Rather than outsourcing to a service provider, which can get expensive, a key unlock is to work with technology vendors that handle the compliance posture on your behalf. Not only can experienced partners take the burden off a business’ shoulders, but they can also manage these issues more efficiently and cost-effectively. “Go do the stuff that you do well, go build your business,” said Wester. “You don’t need to be paying attention to the regulatory happenings in a particular jurisdiction that you may be dealing in or sending monies to. Let somebody else do that because that’s the part where it’s changing.” Solving the Same Problems Despite operating in different markets, remittance and B2B companies face similar challenges. For instance, both require significant data collection on users, called KYC for individuals or KYB for businesses. This data is necessary for compliance reasons, but handling sensitive personal information is also a risk to individual businesses. Again, this is where a technology vendor can help; pre-built APIs make this data collection easier and more secure, with fewer developer resources required. Given the rapid pace of change in payments, organizations must continually adapt to new requirements. Speed, in particular, has become ever more important in B2B payments as suppliers have come to expect real-time transactions whenever possible. And in today’s global economy, payments now move through a 24/7 cycle. Consider a company purchasing goods from China. It must manage everything from payment timing to constantly fluctuating foreign exchange rates. Rather than manage all of that internally, many organizations find it easier to rely on partners that have already solved these challenges. “We realized we’re already helping other customers make payments to China,” said Chidambaram. “So why wouldn’t we take that information and bundle it all together? The network effect isn’t just having more endpoints. It’s also experiencing all those pain points, learning from everybody else’s experience, because I think generally that’s going to be good for all of us. The rising tide will lift all boats.” Drawbacks of Infrastructure Vendors Of course, not every outside partner offers the same level of support. Many businesses turn to infrastructure vendors to power money movement. The challenge is that these providers typically focus on the underlying technology, leaving implementation and the front-end user experience to the client. “It’s pretty straightforward to get the basics in place,” said Chidambaram. “But it doesn’t necessarily directly fit the setup for a particular jurisdiction, and it doesn’t necessarily meet the strict compliance requirements and standards in the jurisdictions that we operate in.” Some organizations have relied on open-source repositories or the growing array of AI tools. While both can provide the basic building blocks, they often fall short as businesses scale and their requirements become more sophisticated.  Another issue is fraud and risk considerations, which can require reserve funding. “If there’s money lost [due to fraud], we’re just going to take it from [reserve funds],” said Chidambaram. “It’s an actual direct cost to those entrepreneurs and to those companies because they don’t have anyone helping them manage any of that risk.” Final Takeaways The core message for any organization developing an international remittance or B2B payments platform is to find a partner that approaches the challenge holistically, freeing the business to focus on growth. The right partner can manage capabilities that may not initially seem like competitive differentiators, such as liquidity management and 24/7/365 money movement. The most optimal B2B payment platforms deliver a stronger, more seamless payment experience for everyone who uses their applications. Given the size and complexity of many B2B payments, every aspect of the transaction has become increasingly important. Similarly, the best remittance platforms automate the necessary things that don’t provide competitive differentiation, like KYC collection, but prioritize their developer time on building market-leading user experiences. “The devil is in the details,” said Wester. “The messy stuff may be that 10% that you didn’t know you needed to pay attention to. You got 90% of the way there, but it was the 10% that you missed that will get you fined or will get you shut down or will lose a partner.” Chidambaram added: “We’ve made it easy for you to go beyond the core infrastructure of minting a stablecoin and sending it to a wallet. We are empowering entrepreneurs so that they don’t have to worry about the payment side of it anymore. My advice is if you are an entrepreneur or a startup and your business is do not do payments, go do the thing that you do.”

  6. Jul 21

    When Faster Isn’t Better: The New Rules of Business Payments

    Business customers today have more ways to move money than at any point in recent memory. The arrival of near-instant payment networks like FedNow and RTP has expanded the menu of options, giving companies new ways to balance speed, cost, and security when making payments. In a PaymentsJournal Podcast, Darren Beyer, Chief Product Officer and Co-Founder of Qolo, and Hugh Thomas, Lead Analyst of Commercial and Enterprise Payments at Javelin Strategy & Research, discussed how the business payments landscape has evolved. While faster payments have captured much of the industry’s attention, they noted that speed is only one consideration. In many cases, choosing the right payment method has become a more nuanced decision. A Panoply of Options According to Javelin’s 2026 Commercial Payments Factbook, one of the most notable developments in business payments is that virtually every alternative to paper checks is growing at the same time—a dynamic the industry hasn’t seen before. The payment method companies choose depends on the circumstances surrounding the transaction. When funds need to move immediately and both parties want real-time visibility into the transfer, businesses often gravitate toward RTP. In newer supplier relationships, where trust may still be developing, virtual cards are frequently the preferred option, particularly when buyers and suppliers are looking for working capital or cash management benefits. ACH remains a mainstay for established business relationships. Companies that have worked together for years often rely on ACH because the process is familiar, automated, and dependable. Whether using standard ACH or Same Day ACH, many businesses continue to view it as a simple and efficient way to move funds. The banking ecosystem has also split across newer instant payment networks. While many large financial institutions helped build and adopt The Clearing House’s RTP network, smaller banks have generally shown greater interest in the Federal Reserve’s FedNow service. “The problem is that while both of those are real time networks, they don’t talk to each other,” said Beyer. “If you’re a bank that does FedNow, you can’t accept an RTP for one of your banking clients. The best way that gets solved is by both of those reaching a critical mass of acceptance on the banking side. Until that problem gets solved, those are going to continue to be throttled.” Beyond Speed The conversation around faster payments has been building for more than a decade. Since the Federal Reserve first outlined its vision for modernizing payments, financial institutions and technology providers have invested heavily to expand available options. Now that those systems are reaching greater maturity, the focus is shifting. The challenge is no longer about enabling faster payments, it’s helping businesses understand when speed matters—and when it doesn’t. For many, delaying a payment can be advantageous. A company issuing large volumes of payments may prefer to preserve cash for a few extra days. In other situations, speed can be critical, such as when paying a six-figure supplier invoice and avoiding costly late fees. “If you were to ask 100 CFOs of varying size companies about RTP or FedNow, they might say, that’s kind of like a real-time ACH or something, isn’t it?” said Beyer. “That’s their level of understanding of what it is. Once you understand what something is, you can think about how are you going to use these things.” “Your CFO may realize, OK, I know what RTP is, now I can hang on to my funds till the absolute last moment and then push them out in my contractual obligation to pay a payee. All that becomes more material to the CFO. That cascades down through the organization in working with providers to better understand the mandates the CFOs push in terms of hitting those cash conversion cycle goals.” By and large, it’s less about choosing a single payment rail and more about applying rules-based decision-making. Today, more businesses have the ability to route payments based on factors such as timing, cost, and the nature of the relationship between counterparties. “Bank of America recently had a webinar about their use of RTP for home closing costs,” said Thomas. “I don’t know that 10 years ago you would have seen a bank talking about this. But the folks involved in the ecosystem understand there’s a need for broader education in terms of how all these various different instruments get used.” Matching the Tool to the Task Each payment method offers its own balance of convenience, control, and risk. Checks, despite their declining share of payments, still provide a level of flexibility. They may take longer to arrive, but senders can stop payment if something goes wrong. Electronic payment methods come with their own safeguards. Card-based payments, including virtual cards, offer dispute and chargeback protections. ACH transactions also provide mechanisms for addressing unauthorized activity. The trade-off becomes more pronounced with real-time payments. The same speed that makes these networks attractive can also create challenges when fraud occurs. Once funds have been sent and received, recovering them can be far more difficult. That reality reinforces a central point, according to both Beyer and Thomas. No single payment method is right for every situation. Each fills a distinct role, and the optimal choice depends on the context and the payer’s goals. “All the hard technical stuff is done,” Beyer said. “We’ve built all the piping, but now we need to help customers understand how best to orchestrate this. Banks have to catch up, they’re not going to go spend a bunch of money if they can’t monetize it.” “The rest of the world has to now do the hard part of coming up with the use cases, rules-based routing, all of those different things. It’s the old adage that it takes 90% of the work to do the final 10%. That’s where we’re sitting right now with RTP and FedNow. We collectively have to get that last 10% across the line.”

  7. Jul 20

    For Gen Z, Banking Loyalty Begins with Payments

    Banking relationships often start earlier than most people realize—and they tend to last longer than expected. Roughly half of young consumers will stick with their bank into adulthood, and many never switch. This puts banks’ focus squarely on Gen Z, where the youngest members of the cohort are in their early teenage years and the oldest are already facing significant financial decisions. Still, many financial institutions have struggled to connect with this digital-first demographic. In a recent PaymentsJournal podcast, Fiserv’s Tina Shirley, VP of Product Management and Josh Mesaros, Inside Sales Executive, as well as Ben Danner, Senior Debit Analyst at Javelin Strategy & Research, discussed payments experiences across generational lines and the areas where banks fall short. What they uncovered was that when financial institutions improve payment experiences to better engage Gen Z, they also positively impact consumers across the board. The Gamut of Mobile Banking Experiences For most consumers, the best mobile experience isn’t the flashiest one—it’s the one that works seamlessly every time. While many banks focus on creating sleek new user interfaces, customers’ highest expectation for online and mobile banking apps is simply that they work—especially for everyday interactions like viewing checking account balances and reviewing credit card transactions. Over the years, many of these features have become taken for granted, but they represent a significant improvement over are far superior to the alternative. “I think back to when online bill pay was new for me, it was kind of a life-changing offering,” Shirley said. “Rather than writing a check and having to go get stamps and remember to mail a check, moving to online bill pay changed my routine from being annoying and inconvenient to just a couple of clicks to pay my bill.” Although many mobile banking activities have become ingrained behaviors, new technologies have driven significant shifts in other areas. This is especially true for Gen Z and millennial consumers. “The biggest one for me would be Zelle®,” Mesanos said. “I live with a bunch of buddies and every month I have my payment set and scheduled where on the first of the month I pay my roommate, who then pays all of our rent to our landlord at once. It is also very convenient when going out to dinner and for my yearly dues to my hockey team. Zelle®‘s just a must have for me.” The Fragmentation of Financial Apps Although Zelle® is a powerful tool, there is no monopoly in fintech—a reality that underscores one of the biggest challenges facing banks and credit unions as they compete for relevance among Gen Z. The market is now crowded with digitally native fintechs and neobanks, many of which have made early inroads with users. While many of the companies were created to addresses specific banking niches, several fintechs have since expanded their offerings to rival traditional banks. Companies like Venmo and Cash App can accept deposits, facilitate investments, and issue debit cards. However, while these services may be bank-like, they are not equivalent to full-service banking offerings. “Some of these third-party payment platforms—for example, Venmo—are not insured,” Mesanos said. “I once had a buddy in college that had a bunch of money sitting in his Venmo account because he didn’t want his parents to access that and see how much he had. But that not being insured scares me because you never know what’s going to happen.” Another issue with fintechs is that many operate as walled gardens, where users must join a platform to participate in its ecosystem. To accommodate these varied scenarios, customers often download multiple apps. This can quickly lead to financial fragmentation, where users hold balances across several platforms with no holistic way to manage them. “You might have a Gen Z customer bouncing around between all these different fintech apps and multiple banking apps, to the point where they have 10 to 15 apps on their phone that are just for banking and payments,” Danner said. “One single app that can do all of those different things would be huge because there is app fatigue in a way,” he said. Unifying the Banking Experience As consumers increasingly juggle multiple financial apps, banks have an opportunity to differentiate themselves by becoming the central hub for user’s financial lives. Unfortunately, many banks and credit unions are still behind the curve on the fundamentals. “I’ve banked with several small banks and credit unions that didn’t have a whole lot of features built into their mobile experience,” Danner said. “When we talk about these things that are table stakes at the large issuer—like budget tools, spend management controls, instant everything—some of the smaller banks and credit unions I’ve been with don’t have any of those tools in their app.” This lack of scope and functionality further contributes to fragmentation, as users often must rely on multiple apps to accomplish a single objective. Integrating these experiences is a critical first step, but an attractive mobile banking solution goes far beyond functionality alone. Perhaps more than any other generation, Gen Z consumers are accustomed to optionality. Instead of cable or satellite, they expect to curate their own mix of streaming services from a collection of options. However, this abundance of choice can also be overwhelming. As a result, many younger adults place a premium on guidance, especially when it comes to major life decisions. Unfortunately, too many banks still rely on one-size-fits-all messaging for a generation that expects tailored experiences. “I’m getting retirement notifications or notifications like, ‘Here is a $400 promo to open a small business account,’” Mesanos said. “It would be helpful if there was a ‘For You’ category where I could learn about mortgages or car loans, something that’s more relevant to my generation.” Personalizing Offers Via AI Banks now have more tools than ever to deliver personalized guidance at scale—and Gen Z consumers increasingly expect that level of customization. Institutions have substantial access to consumer data through onboarding information, transaction history, and product interactions. They also have artificial intelligence and other customization tools at their disposal, which can generate personalized recommendations with minimal staff involvement. These tools can be deployed at critical moments, while the customer is actively engaged with the bank’s app. Unfortunately, many banks and credit unions have continued to operate as usual—and the limitations are becoming increasingly apparent. “Truth be told, I don’t feel much pain, but I do feel like my bank is serving up the same experience that it did 10 years ago, or more,” Shirley said. “My journey has changed; my bank still has tools that are relevant, but maybe in a different way than they used to be. It’s continuing to invest in the technology that enables the experience that customers or members expect.” The Winning Combination for Gen Z For younger consumers navigating fragmented financial lives, the institutions gaining traction are often the ones that can simplify the experience while still making it feel personal. This blend of personalization, education, and AI has resonated strongly with younger adults. A centralized banking experience can cut through the noise for a generation inundated with financial advice from social media and accustomed to managing money across multiple banks and fintech platforms. However, becoming a central hub doesn’t mean a financial institution must be the sole provider of services. In many cases, consumers place greater value on institutions that can provide a holistic view of their financial lives, regardless of where their accounts or balances reside. That broader experience must be paired with functionality, which is why Zelle® has become such an important component of financial institutions’ payments stacks. The service offers a near real-time, low cost, and secure way to send payments that feel familiar and intuitive to Gen Z customers. As Zelle® approaches its tenth anniversary next year, some corners of the market have suggested the payments solution could begin to show its age—but the opposite may be true. “In my opinion, it is the right network enabling instant payments,” Shirley said. “Here at Fiserv, we are bringing things forward like allowing recurring payments and scheduled one-time payments. The user sees their recent recipients so they can easily transact, and they aren’t having to dig into a long list to figure out who to pay.” “There are things that we’re able to do and we’ll keep moving forward with from a user experience perspective, I’m looking forward to seeing what the next 10 years will bring,” she said.

  8. Jul 14

    Tap-to-Pay Gives Small Merchants a Big Advantage

    A decade ago, accepting card payments at a farmers market, food truck, or pop-up shop often meant investing in bulky hardware, worrying about battery life, and paying for ongoing technical support. Today, a small business owner can accept secure, contactless payments with nothing more than a smartphone. Tap-to-pay is doing more than speeding up checkout for consumers—it’s lowering the barriers to commerce for micro merchant, giving them access to affordable payment technology, customer insights, and enterprise-level security once reserved for much larger businesses. In a PaymentsJournal Podcast, Sara Craven, General Manager at Visa’s Authorize.net, and Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, explored what micro merchants can gain from tap-to-pay. Despite the ease and convenience, these transactions are protected against fraud just as effectively as traditional card payments. Making It Easier on Customers Merchants used to be able to get away with accepting only certain payment methods. Today, consumers expect to pay however they want. They want to be able to tap their device—whether it’s Apple Pay, Google Pay, or a credit or debit card—anytime, anywhere. Tap-to-pay allows even the smallest businesses to accept nearly every type of payment. More importantly, it helps bring more consumers through the door, which can translate into higher revenue. “I was at a lacrosse tournament with my 14-year-old,” said Craven. “They had these long lines for folks who just wanted to buy a taco and they were only accepting cash. I sat there thinking, if they had tap-to-pay, with the ability to quickly move consumers through their lines and not have to worry about the change or the dollar bills, it could have been game changing.” Apgar added: “My personal use case is leaving the Kroger the other day and the Girl Scouts had the cookie stand set up out front. I only had $20 in my pocket, so I could only buy four boxes. It was really a heartbreak. Had they had they accepted cards, I certainly would have bought many more than I needed.” Simple Yet Comprehensive There’s no need for merchants to purchase dongles or dedicated hardware to set up tap-to-pay. They simply download an app or sign up online, and they’re ready to start accepting payments. From there, merchants can integrate payments into their broader customer experience. A farmers market vendor, for example, can not only accept payments but also record orders directly on their device, track customer information, and analyze purchase history. From an omnichannel perspective, this gives merchants a centralized view of their operations, including customer activity and overall business performance. “If we can’t get to the farmers market one week, tap-to-pay still shows my order both from when I purchased in person and also when I purchased online,” said Craven. “It creates a really nice, connected ecosystem for merchants.” The early days of wireless payment terminals were marked by bulky hardware that resembled old cellular phones. These devices required reliable cell signals, and battery life was often a major limitation. For merchants operating in places without easy access to electricity—such as farmers markets—keeping terminals powered throughout the day was a challenge. It has also historically been difficult for acquirers and PSPs to efficiently serve micro merchants. Deploying and programing payment terminals is expensive, and ongoing tech support adds even more cost. Tap-to-pay removes much of that burden by eliminating the need for dedicated hardware altogether. “We’ve got tons of partners who leverage on Authorize.net,” said Craven. “They’re reselling or offering our service to merchants as a streamlined approach to our products. They can also get their merchants onboarded without having to send them devices. It’s super easy for PSPs to scale in this space without the overhead of having to manage hardware deployment and support.” State-of-the-Art Fraud Controls Despite its simplicity, tap-to-pay offers the same level of security and reliability as more complex payment systems. “I joke that my mom is very nervous about using tap-to-pay because she’s worried that the minute she touches her phone or her credit card to someone else’s phone, they’re able to steal her credentials,” said Craven. “But everything is fully encrypted. You don’t see full credit card data. It has a token attached to it so that you’re able to purchase again without having to enter or show your clear card data. They don’t even have PIN numbers that the merchants have accessible.” Behind the scenes, advanced fraud prevention tools monitor transactions to ensure that in-person payments are being made by the authorized user, based on behavioral patterns and prior usage history associated with the card or device. Tap-to-pay is also more secure than swiping a card because payment data is encrypted instantly, and there’s no magnetic stripe involved. Consumer can feel confident that their information is protected and that transactions are secure. Much of this security is invisible to the user, but it helps create a seamless and trustworthy experience for both merchants and consumers. Final Takeaways As consumer expectations continue to shift toward faster, more flexible payment experiences, tap-to-pay is becoming less of a convenience and more of a competitive necessity for businesses of all sizes. For micro merchants in particular, the technology removes many of the traditional barriers to accepting digital payments, allowing them to operate with greater mobility, lower overhead costs, and more direct access to customer insights. As smartphones become all-in-one business tools, tap-to-pay is set to play a central role in how small businesses sell, grow, and engage with customers in the years ahead. “There are so many use cases for that today, especially when you look at the makeup of small business in the U.S.,” said Apgar. “Field services like plumbers, electricians, and real estate agents—the use cases are almost limitless.” Craven added: “It is table stakes that people expect to be able to tap their device anytime and anywhere. Then you have the age-old problem, I don’t have change for a $50 when I’m at the farmers market. It’s all the benefits of card payments rolled into an easily accessible platform.”

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Payments Content, Expert Insights and Timely News

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  • Creator
    PaymentsJournal
  • Years Active
    2023 - 2026
  • Episodes
    283
  • Rating
    Clean
  • Show Website
    PaymentsJournal