Payment System Modernization

🚨 𝐇𝐨𝐰 𝐭𝐨 𝐏𝐨𝐰𝐞𝐫 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐰𝐢𝐭𝐡 𝐀𝐈 — by DEUNA👇 Modern payments no longer just process — they reason, adapt, and optimize. This post breaks down the architecture of an AI-native payments ecosystem — and how leading enterprises are using it to reduce friction, improve approval rates, and drive intelligent growth. — 𝐓𝐡𝐞 𝐄𝐯𝐨𝐥𝐯𝐢𝐧𝐠 𝐑𝐨𝐥𝐞 𝐨𝐟 𝐀𝐈 𝐢𝐧 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 AI connects the dots between data, security, speed, personalization, and behavior — enabling intelligent action in real time. 🔹 Security → Real-time fraud scoring and behavioral anomaly detection. Microsoft leverages AI to detect coordinated fraud attacks across geographies, using real-time IP fingerprinting and dynamic 3DS decisions. 🔹 Speed → Automated decisioning and optimized checkout logic. eBay deploys AI models to streamline its global checkout flow, dynamically adjusting the experience by market, device, and payment method trends. 🔹 Personalization → Adaptive routing and dynamic UX. Checkout.com enables merchants to personalize payment options at checkout based on customer history, issuer behavior, and local preferences. 🔹 Behavioral Data → Continuous learning from patterns in issuer behavior, retries, fraud triggers, and consumer habits. — 𝐓𝐡𝐞 𝐂𝐨𝐫𝐞 𝐋𝐚𝐲𝐞𝐫𝐬 𝐨𝐟 𝐀𝐈 𝐢𝐧 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 (hypothetical examples) 1️⃣ Unified Data → Consolidation of data from PSPs (e.g., Getnet, Stripe, Payplug), fraud tools, CRMs, and internal commerce systems. → eBay standardizes transaction-level data across global PSPs and marketplaces to enable unified performance insights and routing logic. 2️⃣ Agentic Intelligence → A reasoning layer that evaluates and ranks millions of routing paths, retries, and fraud strategies based on expected outcome. → Getnet merchants in LATAM use ATHIA to switch routing strategies in real time during issuer outages. 3️⃣ Machine Learning → ML models tailored to commerce — optimizing for approval rates, fraud risk, customer type, and payment method behavior. → Google uses ATHIA’s ML models to proactively adjust retry windows for license renewals based on historical bank acceptance timing. 4️⃣ Analysis & Visualization → Data is transformed into dynamic visualizations that surface anomalies and opportunities without requiring deep SQL or manual dashboards. → Stripe provides merchants with visual routing breakdowns and simulated outcomes — 𝐓𝐡𝐞 𝐎𝐮𝐭𝐜𝐨𝐦𝐞: 𝐀 𝐒𝐲𝐬𝐭𝐞𝐦 𝐓𝐡𝐚𝐭 𝐀𝐜𝐭𝐬 — 𝐍𝐨𝐭 𝐉𝐮𝐬𝐭 𝐑𝐞𝐩𝐨𝐫𝐭𝐬 ✅ Contextual checkout experiences by geography and device ✅ Lower transaction costs via intelligent acquirer routing ✅ Higher approval rates through dynamic retries ✅ Reduced fraud and false declines with adaptive scoring AI in payments is no longer experimental. It’s the backbone of scalable, programmable commerce. Intelligence in motion. — Source: DEUNA ► 𝐓𝐡𝐞 𝐏𝐚𝐲𝐦𝐞𝐧𝐭𝐬 𝐁𝐫𝐞𝐰𝐬: https://lnkd.in/g5cDhnjC ► Connecting the dots in Payments... | Marcel van Oost

The UK is transforming its payments system with the New Payments Architecture (NPA), a bold initiative designed to simplify and modernize how money moves between banks. But what does this mean for you, whether you’re a business owner, a consumer, or just someone who transfers money to friends? Let’s break it down with real-life scenarios. Imagine the current payment system as multiple roads leading to the same destination—each with its own rules, speed limits, and tolls. Systems like BACS, Faster Payments, and Cheque Clearing operate separately, creating inefficiencies. The NPA brings all these systems together under one highway: a unified platform built on ISO 20022 standards. This means faster, safer, and more flexible transactions for everyone. Here are some examples of how NPA will make life easier: 1. For Businesses: • Scenario: You’re a small business owner paying salaries via BACS. Currently, it takes up to three days for payments to process. • With NPA: Payments will settle in real-time, ensuring your employees get paid instantly. 2. For Consumers: • Scenario: You’re splitting the bill at dinner and transferring money to a friend using Faster Payments. • With NPA: The transaction will be faster and more secure, with enhanced fraud protection. 3. For Banks and Fintechs: • Scenario: A new fintech wants to offer innovative payment services but faces high entry barriers due to outdated systems. • With NPA: Lower barriers will encourage competition and innovation, benefiting consumers with better services. The key benefits include: • Real-Time Payments: Say goodbye to delays; transactions will happen instantly. • Enhanced Security: Improved fraud prevention protects your money. • Better Data Insights: ISO 20022 enables richer data exchange for tracking payments. • Innovation and Competition: New players like fintechs will bring fresh ideas to the market. With increasing digitization, stricter regulations, and rising fraud risks, the old systems can no longer keep up. The NPA ensures resilience and adaptability in an ever-changing financial landscape. Whether you’re paying bills, running a business, or developing fintech solutions, the New Payments Architecture promises faster, safer, and smarter transactions for everyone in the UK.

Reading Samora Kariuki's interesting newsletter this morning on Kenya's Payments Ecosystem, my first thought was, "Heck! Why do we need another payment system?" Why not strengthen PesaLink  and make it robust like the Central Bank of Nigeria did with the Nigeria Inter-Bank Settlement Systems PLC? The more I internalized Samora's thesis, the more I was like - this makes sense... So here are my thoughts:- While Kenya does have existing payment systems like M-Pesa and PesaLink , the Central Bank of Kenya's (CBK) push for a new Fast Payment System (FPS) aims to address several limitations of the current infrastructure and create a more integrated, efficient, and inclusive financial ecosystem. Some thoughts: 🔗 Seamless interoperability across all financial institutions Current systems like M-Pesa and PesaLink have limitations when it comes to interoperability. The new FPS aims to create a universal system across the financial services ecosystem. 💰 Lower costs and increased efficiency Existing systems can be expensive for users, especially for cross-platform transactions. The new FPS is expected to reduce costs and increase efficiency. 🔓 Open APIs for innovation The proposed FPS will likely be built on open APIs, allowing for greater innovation and integration in the financial ecosystem. 🏛️ Enhanced regulatory oversight A centralized FPS gives the CBK greater oversight and control over the payment infrastructure, which is crucial for maintaining financial stability. 🌐 Adoption of international standards The new system is expected to adopt international standards like ISO 20022, which allows for richer data exchange and better integration with global financial systems. 🛡️ Addressing Systemic Risk The current dominance of M-Pesa poses a systemic risk to Kenya's economy. A centralized FPS reduces dependence on any single private entity. ⚡ Lightning-fast settlements While PesaLink offers real-time transfers, the new FPS may offer even faster settlement times and higher transaction limits with lower costs. 🎛️ Advanced features   The new system is expected to support advanced features like request-to-pay, direct debits, and more sophisticated business payment solutions. 🤝 Greater financial inclusion A universal FPS can potentially reach more unbanked and underbanked populations, furthering Kenya's financial inclusion goals. 🏆 Leveling the playing field for all players The new system aims to level the playing field, allowing smaller banks and fintech companies to compete more effectively with larger institutions and mobile money providers. While strengthening PesaLink could be an option, the CBK likely sees the need for a more fundamental overhaul of the payment infrastructure to meet future needs and maintain Kenya's position as a leader in financial innovation in Africa. The new FPS represents a strategic move to create a more robust, flexible, and future-proof payment ecosystem.

In my pre-Bain life I did a fair amount work focused on making government payments accessible, easy to use, and modern. Recent DOGE efforts draw attention to the need for improvement, but I fear the result will be chaos. But it is a wake-up call for how we can do better. Payment enabled eGov solutions ought to be seamless, secure, and efficient. Instead, they are often a mess of inefficiency, manual processes, and legacy systems that frustrate both citizens and businesses. Governments can (and must) do better. Based on my work with municipal, state/provincial, and national agencies here in the U.S. and abroad, here are my suggestions: 1️⃣ Go digital—but do it right Paper checks and manual processing should be relics of the past. e-payments reduce costs, increase speed, and improve security. But modernization needs to be done strategically, not as a rushed power grab. The Government Finance Officers Association (GFOA) stresses the importance of clear policies to ensure smooth implementation. 2️⃣ Prioritize security and access controls One of DOGE’s biggest missteps was attempting to override Treasury’s existing safeguards. To retain trust, governments need to implement robust security protocols, multi-factor authentication, and access restrictions to prevent unauthorized use of sensitive financial data. 3️⃣ Build transparency and accountability Every payment should be auditable, and every decision should be accountable. Establishing clear oversight mechanisms prevents fraud and ensures public trust. Solutions like real-time transaction monitoring and transparent reporting help keep everyone honest. 4️⃣ Leverage APIs and interoperability Government payment systems should integrate seamlessly with banking infrastructure, tax agencies, and social services. APIs allow for better data exchange, reducing processing delays and ensuring more efficient fund distribution. 5️⃣ Ensure 24/7 availability Citizens rely on government payments for essentials. Government agencies can take advantage of round-the-clock payment rails. But real time payment infrastructure isn't enough. Gov agencies need redundancy measures in place to prevent downtime and must streamline internal processes to ensure that benefits and refunds aren’t delayed by bureaucratic inefficiencies. 6️⃣ Use smart reporting and analytics Robust data analytics can help detect anomalies, optimize agency cash flow management, and prevent fraud. Government entities should invest in AI-driven insights to improve forecasting and decision-making. The Path Forward Government payment modernization isn’t just about technology—it’s about trust. DOGE’s overreach highlights the dangers of prioritizing speed over thoughtful execution. The alternative? A strategic, well-governed shift toward digital, secure, and interoperable payments that serve the public good. The stakes are too high to get this wrong. Let’s make sure we get it right. (photo is me in Islamabad back in 2016)

Card Management Systems: No Longer Optional for #Banks Looking to Lead Legacy CMS can’t keep up with digital-native customer expectations, global compliance mandates, or the race to embedded financial services. CMS modernization is no longer a backend conversation—it’s a business growth strategy.  Here’s a quick comparison: Legacy #CMS:  • Supports only credit/debit cards  • Manual, slow, batch processing  • Monolithic, rigid, on-premise systems  • Limited to ATM & POS transactions  • Manual KYC, slow onboarding  • No real support for multi-currency or cross-border  • Rule-based, post-event fraud detection  • Basic, static reports  • Limited compliance adaptability  • Hard-coded integrations, high effort  • Long development cycles to customize  • Friction in scaling or entering new markets Modern CMS:  • Supports prepaid, virtual, smart-chip, multi-currency, and corporate cards  • Real-time digital issuance, virtual cards, wallet provisioning  • Cloud-native, modular, microservices-based  • Handles contactless, QR, mobile, online & embedded #payments  • Digital onboarding with eKYC, biometrics & AML  • Native support for global multi-currency/card schemes  • AI/ML-powered real-time fraud detection & scoring  • Real-time dashboards, spend analytics, CLTV, RFM  • Built-in PCI-DSS, GDPR, PSD2, tokenization & biometric auth  • Open APIs for ERP, core banking, Fintech integrations  • Low-code/no-code for rapid card product configuration  • Scales globally, deploys fast, supports hybrid models Modern CMS platforms aren’t just back-office tools—they’re #growth engines. They enable faster innovation, deeper customer insights, and safer transactions. Legacy CMS was built for yesterday’s world. Modern CMS platforms are built for speed, scale, flexibility, and embedded finance—everything banks need to remain competitive in 2025 and beyond. Let’s start a conversation. Your modernization journey doesn’t begin with technology—it starts with the right questions. Ren Payments by Euronet #Issuing, #Acquiring, #ATM, #InstantPayments, #Platform, #Infrastructure, and #Expertise.

In the first half of 2024, £571 million was lost to card payment fraud in the UK alone, much of it driven by scams on social media. Fraud has clearly evolved, adopting more modern and sophisticated tactics. In payment, one standard governing how card data is protected, namely how it is stored, processed, and transmitted, is the PCI DSS directives. The Payment Card Industry Data Security Standard was created in 2004 and has been the backbone of payment security for nearly 20 years. This year marks a big shift. Its latest version, PCI DSS v4.0, will become mandatory in March 2025. This is the first major update in over a decade, so worth taking a closer look at the key changes. Overall, PCI DSS v4.0 focuses on critical aspects such as encryption, authentication, network segmentation, and vulnerability testing, ensuring businesses are better equipped to handle the 'modern' security threats that are increasingly sophisticated too. ◾As such one of the key changes is the introduction of a flexible compliance approach. This means merchants can choose security measures that best fit their specific needs and risks. This approach is well-aligned with how businesses today manage their security challenges. In the same way that authentication frameworks are becoming more adaptive to varying levels of risk, other security measures are also evolving to be more context-specific and scalable. ◾Another key update focuses on the Stronger Authentication framework. Multi-factor authentication (MFA) is now mandatory for all accounts accessing sensitive payment systems, including remote administrative access. Specifically, MFA is required for all accounts that interact with the Cardholder Data Environment (CDE). ◾Stronger encryption and better key management are now essential. Businesses must use modern encryption methods instead of outdated ones. They also need to improve how encryption keys are created, shared, and stored to reduce the risk of data breaches and unauthorised access. ◾Given the industry’s shift towards real-time data processing, the latest guidelines also encourage automated monitoring and the use of tools that enable businesses to detect and flag non-compliance in real time. 👉🏽#Paymentexperts any perspectives to share on #pcidss🎙️? --- 𝑾𝒐𝒏𝒅𝒆𝒓 𝒘𝒉𝒐 𝒘𝒆 𝒂𝒓𝒆? 𝑊𝑒 𝑎𝑟𝑒 𝑎 𝑡𝑒𝑎𝑚 𝑜𝑓 𝑃𝑎𝑦𝑚𝑒𝑛𝑡𝑠 𝑆𝑡𝑟𝑎𝑡𝑒𝑔𝑖𝑠𝑡𝑠, 𝑏𝑙𝑒𝑛𝑑𝑖𝑛𝑔 𝑐𝑜𝑟𝑒 𝑡𝑒𝑐ℎ𝑛𝑖𝑐𝑎𝑙, 𝑜𝑝𝑒𝑟𝑎𝑡𝑖𝑜𝑛𝑎𝑙, 𝑎𝑛𝑑 𝑐𝑜𝑚𝑚𝑒𝑟𝑐𝑖𝑎𝑙 𝑒𝑥𝑝𝑒𝑟𝑡𝑖𝑠𝑒 𝑤𝑖𝑡ℎ 𝑎 𝑐𝑟𝑒𝑎𝑡𝑖𝑣𝑒 𝑎𝑝𝑝𝑟𝑜𝑎𝑐ℎ. 𝑊𝑒 𝑎𝑠𝑠𝑖𝑠𝑡 𝑐𝑙𝑖𝑒𝑛𝑡𝑠 𝑡ℎ𝑟𝑜𝑢𝑔ℎ 𝐶𝑜𝑛𝑠𝑢𝑙𝑡𝑖𝑛𝑔, 𝑆𝑡𝑟𝑎𝑡𝑒𝑔𝑦, 𝑅𝑒𝑠𝑒𝑎𝑟𝑐ℎ, 𝑎𝑛𝑑 𝑇ℎ𝑜𝑢𝑔ℎ𝑡 𝐿𝑒𝑎𝑑𝑒𝑟𝑠ℎ𝑖𝑝 𝑝𝑟𝑜𝑗𝑒𝑐𝑡𝑠. 𝑳𝒐𝒐𝒌𝒊𝒏𝒈 𝒇𝒐𝒓 𝒑𝒂𝒚𝒎𝒆𝒏𝒕 𝒍𝒆𝒂𝒓𝒏𝒊𝒏𝒈 𝒓𝒆𝒔𝒐𝒖𝒓𝒄𝒆? ◼️ Sign up to our unique Payment Assets Library here: https://lnkd.in/dVXjGkzB ◼️Follow Paypr.work [ˈpeɪpəwəːk] for more #paymentinfographics #paymentstrategy #payprwork #paymentinsights

The payments stack is quietly being rebuilt — and the latest move from Visa shows how fast that transformation is accelerating. Visa Intelligent Authorization is a new capability on the Visa Acceptance Platform that allows acquirers to modernize payment processing through a single API integration, capable of processing transactions across multiple card networks. On the surface, this looks like an infrastructure upgrade. But the implications for the payments ecosystem are far bigger. 1️⃣ Payments infrastructure is becoming “API-first.” Instead of banks or acquirers building and maintaining their own authorization stacks, they can plug into modular infrastructure through a single API. This significantly reduces the cost and complexity of modernization. 2️⃣ Orchestration is becoming the new battleground. As payment flows become more complex — with wallets, A2A, stablecoins and AI-driven commerce entering the mix — the ability to intelligently route and authorize transactions across networks will be a key differentiator. 3️⃣ Lower barriers for ecosystem innovation. Fintechs, PSPs and software platforms can integrate once and access multiple payment rails, accelerating innovation for merchants and enabling new commerce experiences without rebuilding core infrastructure. 4️⃣ Networks are evolving into platforms. Moves like this reinforce a broader trend: payment networks are no longer just processing transactions — they are becoming programmable infrastructure layers that others build on. For those of us working in payments, this shift is fascinating. The industry is moving from “card networks” to “payments platforms.” And when infrastructure becomes programmable, the real innovation happens at the edges — where fintechs, merchants, developers and partners build the next generation of commerce experiences. Exciting times ahead for the ecosystem! #payments #fintech #apis #digitalpayments #innovation https://lnkd.in/gXkpYQ2i

Let’s Speak the Same Language: Rethinking Payment System Architecture with BIS’ Latest Model The BIS has released an insightful paper—Working Paper No. 1259—that introduces a formal model to describe and compare payment systems globally. For those of us navigating the complexities of cross-border payments, CBDCs, and ISO 20022 adoption, this couldn’t be more timely. 🔍 The Problem: We often lack a common vocabulary to describe how different payment systems work—from traditional card networks to modern stablecoin platforms. This ambiguity slows down innovation, regulation, and interoperability. 💡 The Solution: The BIS proposes “Payment Diagrams”—a simple, standardized visual model to map three universal functions across any payment system: 1. Issuance/Withdrawal – Where and how funds enter or exit the system 2. Holding – Who holds the funds and in what form 3. Transfer – How the funds move from A to B Whether it’s a cross-border pacs.008, a retail CBDC, or a stablecoin transaction, this model allows us to map it all clearly—without getting lost in technical or jurisdictional silos. 🌐 Why This Matters: • For central banks & regulators: Offers a clean lens to evaluate risks, settlement layers, and financial stability impacts. • For innovators: Speeds up product design, regulatory discussions, and system interoperability. • For global harmonization: Bridges traditional banking systems with emerging platforms like CBDCs and tokenized money. https://lnkd.in/e24csWgj #payments #financialservices #innovation #banking #cbdc #iso20022 #stablecoins

The Evolution of Global Payments: Three Paths, One Future The way we pay is a mirror of our economies—diverse, dynamic, and rapidly converging. From plastic cards to QR codes and real-time rails, here’s how the world’s payment systems are rewriting the rules of money. Three Models, One Mission: Financial Inclusion 1️⃣ The West: Cards to Digital Dominance Visa and Mastercard’s card rails, born in the 1960s, still dominate. But digitization turned cards into virtual tools embedded in smartphones, fueling e-commerce. While cards process over $9 trillion annually (Nilson Report 2023), their closed-loop model faces pressure from real-time alternatives. 2️⃣ China: The SuperApp Leapfrog China skipped cards entirely. By 2022, Alipay and WeChat Pay handled 90% of China’s $17 trillion mobile payment market (Statista). QR codes and closed-loop wallets created a “payments-as-a-platform” ecosystem, blending commerce, social media, and finance. 3️⃣ India, Brazil, Africa: The Public Infrastructure Wave India’s UPI: 300 million monthly users, processing 10 billion+ transactions monthly (NPCI 2023). Brazil’s Pix: Launched in 2020, now used by 75% of adults (Central Bank of Brazil). Africa’s M-Pesa: Mobile money serves 51 million users across seven countries, driving financial inclusion from 23% to 83% in Kenya (GSMA 2023). Why These Models Are Converging Digitization is erasing boundaries: Real-Time Payments: FedNow (US) and SEPA Instant (EU) mimic UPI/Pix’s success. CBDCs: 130+ countries exploring digital currencies to bridge public and private systems (BIS 2023). SuperApps: Western fintechs like Revolut now emulate Alipay’s all-in-one model. The Future: Hybrid Systems The next era won’t be “either/or.” Examples: India integrates UPI with credit cards. Brazil’s Pix partners with WhatsApp Pay. Visa launches CBDC interoperability tools. The Big Question Will open public rails (like UPI) eclipse private giants, or will collaboration reign? McKinsey predicts 50% of global transactions will be real-time by 2027—a $48 trillion shift. Original source and inspiration: Panagiotis Kriaris Sources: NPCI, Central Bank of Brazil, GSMA, BIS, McKinsey Your take: Which model will shape the future of payments? 💬 Let’s debate! #Payments #DigitalEconomy #Fintech #FinancialInclusion #Innovation

💰 Did you know that check volume is down about 83% over the past 25 years? Meanwhile, daily automated clearing house (ACH) transactions have increased by 497% during the same period, showing a sharper incline than the decline in check usage. ACH payments are electronic transfers between depository institutions. While every organization is different, the trend suggests that shifting recurring flows to ACH can deliver near-term benefits. Checks still play a role, but usage is shrinking: 📉 47% of midsize businesses say they use checks today, down from 59% in 2024. 💻 Among firms that still use cash or checks, 33% plan to go all-digital within a year and another 42% within two to three years. What’s driving the decline? 📱 The convenience and immediacy of digital payments (bank transfers, mobile wallets, real-time clearing). 🚨 Concerns about security and fraud. ⏰ The operational cost and delays of physical processing. Yet, despite this momentum, many U.S. dental practices and DSOs still depend on mailed statements, check collection, and outdated billing workflows. 👇 Here is what I suggest to my clients which include both general as well as multi-specialty dental practices and DSOs operating in multiple states: ✅ Offer more payment flexibility. The more frictionless paths your patients have (tap, wallet, ACH, card), the sooner you get paid and the fewer aged receivables you carry. ✅ Modernize your claim processes. The shift to EFT shows that payers and providers both benefit; faster settlement, lower costs, more predictability. ✅ Target younger patients’ expectations. Gen Z and millennials expect payments to be as easy as buying coffee; and they’ll preferentially choose practices that deliver seamless billing experiences. ✅ Treat payments as part of treatment acceptance. Financial friction often causes treatment hesitation. Embed flexible, digital payment options at the point of care, or even ahead of it. Graphic Source: Citizens 🔔 Follow me (Sina S. Amiri) for daily dental industry insights. 🦷 My company has assisted 100+ DSOs and thousands of practices with multi-payer EFT and ERA/835 enrollment. We offer a SOC 2 Type 2 certified RCM software which automatically reconciles EOBs and ERAs against bank deposits for faster insurance claim payment posting into general as well as specialty DPMS. #Banking #FinTech #Healthcare #Dental #RevenueCycleManagement