Navigating the Changing Dynamics of the US Payments Ecosystem

Every economic activity has a payment transaction at the core, enabling every deal, purchase, and monetary interaction. Across different regions, market forces, economic development trajectories, regulatory schemes, the power of incumbents and the needs of consumers & businesses has led to different outcomes for how consumers and businesses experience payments.

Travel to India and you will find UPI powered digital payment options that are pleasingly simple. Speak to a small business owner in China who uses Alipay and you will hear that it is remarkably easy to receive payments and manage cash flow with clever AI driven financing.

The payments landscape in the US is more established; and whilst it delivers reliability and steady revenue streams, it could be argued that it is now under-serving both consumers and businesses, especially compared with payment services in emerging markets.

This indicates that there is an opportunity for new payment products and experiences whether that could be provided by large banks hunting market share, forward thinking regional banks or new market entrants. With the value of non-cash payments reaching $128.51 trillion in 2021 (Federal Reserve Payments Study) and Deloitte predicting that real-time payments could replace US$18.9 trillion in ACH and check-based B2B payments in the United States by 2028 — it is an opportunity worthy of investment.

So this series will explore the constellation of innovations that are changing payments for the better, exploring the impacts of ISO 20022, payment rails like FedNow, and the pivotal challenges of modernizing core payment systems and infrastructure, while sustaining existing revenue streams and creating new ones.