The payments industry is undergoing a deep transformation, not seen in decades. It appears to be headed towards a more decentralized and more integrated ecosystem. In that sense, I would argue it would be appropriate to term this seismic shift as a “system rebuild” as against disruption.
At the heart of this transformation is a fundamental shift from the traditional “card-and-rail” model to a multi-layered, open-network future. This “system rebuild”, of payment services is spawned by four key crosscurrents.
Firstly, the engine powering this “system rebuild”, are the host of new technologies that have created “alternative rails”. that operate independently of the traditional card networks.
RealTime Payments (RTP) enable instant 24/7 bank-to-bank transfers. They bypass card networks offering a cheaper and faster alternative for any type of transaction – from bill pay to e-commerce.
Open banking mandate requires banks to share customer data securely with authorized third-party APIs. This enables Fintechs to build innovative service offerings that can initiate payments directly from a customer’s bank account.
Digital Wallets and Mobile Payments Platforms such as Apple Pay, Samsung Pay, Pay Pal currently use Visa and Mastercard rails today. But they are rapidly deploying new technologies to integrate RTP or ACH that offer low-cost options for consumers.
Blockchain, Stablecoins, and CBDCs are evolving rapidly, and have the potential to enable direct peer-to-peer as well as cross-border transactions that can disintermediate current payment architectures.
The second major crosscurrent is the shifting consumer and merchant expectations. They are now demanding a seamless, embedded, and highly personalized payment experience.
The “on-demand” economy has conditioned consumers to expect instant gratification, a need that real-time payments are perfectly positioned to meet.
Consumers are increasingly comfortable with payments being an invisible part of another experience, such as ordering an Uber, streaming a movie, or paying within a business’s own app. This trend favors platforms that can be easily integrated via APIs.
The third crosscurrent is the explosive growth of BNPL services, projected to reach a global market size of over $560 billion in 2025, has demonstrated a strong consumer appetite for alternative credit and installment-based payments at the point of sale, a space historically dominated by credit cards.
Finally, governments and regulators worldwide are taking a more active role in fostering competition and transparency in the payments market. Antitrust enforcement and fee caps (EU) are reshaping incentives and opening space for alternatives. The DOJ’s lawsuit against Visa is a high-profile example.
Many countries are actively promoting their own domestic real-time payment networks to reduce reliance on foreign card schemes, enhance monetary sovereignty, and lower costs within their economies. (e.g. India’s UPI)
Agile, tech-native fintech companies continue to innovate at a rapid pace, unbundling the services traditionally offered by banks and card networks. Companies like Stripe and Adyen have built global payment platforms from the ground up on modern, API-first architecture, allowing businesses to easily accept a wide array of payment methods, from cards to digital wallets to bank transfers, thereby commoditizing the underlying payment rail.
What is obvious is that the “system rebuild” will result in rebalancing and unbundling of the payments industry. The emergence of new players will certainly challenge the monopoly of the card networks. But the networks will continue to be big players as a lot will depend on the success of their initiatives to reinvent themselves. They certainly have seen successes at that. Their tokenization technology secures Apple Pay. Their AI fraud-scoring systems are used to verify payments on other networks. Their cross-border networks (Visa Direct, Mastercard Send) are being used to power remittances, even if the transaction doesn’t involve a traditional card.
My view is that in this “system rebuild” there will be no single winner. The decentralized pieces of architecture will enable new leaders to emerge. But the real winner is the merchant, who for the first time will have a genuine choice, leading to increased competition and lower costs across the entire system. I think, the biggest winners of this “system rebuild” will be the consumers.