07-08-2025
Breaking Barriers: How Payments Infrastructure Is Evolving
Mustafa Khanwala is the Founder and CEO of MishiPay Ltd.
Payments infrastructure may look sleek today, but the foundations were built decades ago, and many legacy dynamics still shape the industry. New players are pushing innovation faster than ever, delivering better experiences, smarter technology and faster go-to-market strategies. The payments landscape is shifting fast, shaped by legacy entrenchment, challenges facing new methods and the rise of smarter, more agile solutions.
The Legacy Lock: How Traditional Banks Tied Payments And POS Together
Payments and point of sale (POS) have always been deeply intertwined. As a retailer, you weren't given much choice because banks offered bundled packages: 'Do you want POS systems? We'll provide POS and payment processing.'
This bundling built powerful relationships between banks and early giants like WorldPay, Verifone and First Data. They didn't dominate by offering better tech; they tied payments to essential financial products that businesses relied on.
Even today, that lock persists. The leader of a $100 million business seeking a line of credit often hears, 'We'll offer great rates if you take our payment processing.' The incumbents are still bundling payments with business-critical services, making it hard for new entrants to compete.
The Rise Of The Disruptors
For decades, the payments world moved slowly, tied to banking relationships, old tech and complicated onboarding. Disruptors broke that model.
New providers decoupled payments from banks, focusing on speed, simplicity and APIs. Onboarding could be completed in hours. Businesses could integrate through a modern API and instantly access new payment methods.
Better experiences and faster deployments allowed these companies to charge premium margins—something legacy providers couldn't match.
This model gained traction first in the U.K. and Europe, then rippled into the U.S. As more acquiring licenses opened up, barriers fell, and agility, innovation and customer experience began to matter more than legacy ties.
Why New Payment Methods Struggle To Break Through
When people ask why new payment methods like open banking haven't exploded in markets like the U.K. or U.S, the answer comes down to a few key points: entrenched networks, superior user experiences and the lack of a true 'sign-up moment.'
Strong companies like Visa and MasterCard want to keep their structures firmly in place. They're deeply embedded across merchants, banks and consumer habits due to the sheer entrenchment of their systems globally.
When open banking launched, it wasn't offering a dramatically better experience for consumers in the U.K. and U.S., because we already have systems such as Apple Pay. And looking at it from a user experience perspective, Apple Pay and open banking are the same. You tap, you authenticate with Face ID or Touch ID, and you're done. There was no compelling reason for the average consumer to switch to something new.
Compare that to markets like India or China, where open banking services like WeChat Pay, PayTM and UPI emerged because services like Apple Pay or Google Pay weren't established. Those ecosystems were wide open for disruption because the baseline experience was still more manual.
Beyond that, there's the 'sign-up moment.' In London, for example, when the London Metro enabled direct TAP access with your bank card during the Olympics, it created a huge inflection point. Millions of people were given a reason to use contactless payments seamlessly and necessarily. Open banking never had a moment like that in Westernwestern markets, a large-scale, practical reason for consumers to try something new.
Without a better experience and a catalyst moment, new payment methods have struggled to break through. The bar for changing consumer behavior in payments is incredibly high, and Visa, MasterCard and contactless wallets still meet or exceed that bar.
The Critical Role Of POS Evolution
The future of payments is about fully integrated POS systems. That's why Fiserv acquired Clover, and Square bundled payment processing with its POS offering. Controlling both sides lowers costs and deepens merchant relationships.
But scaling from small businesses to enterprises is tough. Large retailers can't afford one minute of POS downtime—it would mean a massive loss of revenue. Enterprise businesses demand industrial-grade reliability, uptime and performance, making it difficult for some providers to move upmarket. They need to be able to guarantee operational scale.
How Customer Expectations Are Driving Change
Customer expectations are now the biggest force reshaping payments. Consumers want the fastest, best and cheapest experience.
That's why buy now, pay later (BNPL) models like Klarna took off. They made it easy: users were already signed up and could split payments instantly. The experience stayed fast and simple, while purchasing power improved.
Today, it's not enough to offer cheaper processing behind the scenes. You have to improve the customer experience while making it easier on their wallets. Without both, adoption stalls.
What's Next: Wallets, Credit Products And Embedded Finance
The next wave of disruption will come from smarter credit products, digital wallets and embedded financial services.
Credit options like BNPL are just the beginning. Companies like Adyen and Stripe already offer microloans based on real transaction histories, not outdated credit scores. Instead of applying for financing the old way, retailers can access capital instantly, based on how their business is performing.
Wallets will also keep expanding. Apple Pay offers a great tap-to-pay experience, but the future is about more than speed. Wallets will soon integrate payment, financing, loyalty and even identity into one seamless platform.
We're also starting to see true frictionless commerce with biometric payments. On Yas Island in Abu Dhabi, visitors link their Face ID to a wallet and pay for rides, food and shopping without pulling out a card or phone. It's faster, smarter and better for both consumers and merchants.
The payments industry is moving faster than ever, but the challenges of legacy systems, customer expectations and operational scale aren't going away. Success will come to those who can blend the best of both worlds, delivering smarter, more affordable solutions without sacrificing the seamless experiences that consumers and businesses demand.
Payments infrastructure may look sleek today, but the foundations were built decades ago, and many legacy dynamics still shape the industry. New players are pushing innovation faster than ever, delivering better experiences, smarter technology and faster go-to-market strategies. The payments landscape is shifting fast, shaped by legacy entrenchment, challenges facing new methods and the rise of smarter, more agile solutions.
The Legacy Lock: How Traditional Banks Tied Payments And POS Together
Payments and point of sale (POS) have always been deeply intertwined. As a retailer, you weren't given much choice because banks offered bundled packages: 'Do you want POS systems? We'll provide POS and payment processing.'
This bundling built powerful relationships between banks and early giants like WorldPay, Verifone and First Data. They didn't dominate by offering better tech; they tied payments to essential financial products that businesses relied on.
Even today, that lock persists. The leader of a $100 million business seeking a line of credit often hears, 'We'll offer great rates if you take our payment processing.' The incumbents are still bundling payments with business-critical services, making it hard for new entrants to compete.
The Rise Of The Disruptors
For decades, the payments world moved slowly, tied to banking relationships, old tech and complicated onboarding. Disruptors broke that model.
New providers decoupled payments from banks, focusing on speed, simplicity and APIs. Onboarding could be completed in hours. Businesses could integrate through a modern API and instantly access new payment methods.
Better experiences and faster deployments allowed these companies to charge premium margins—something legacy providers couldn't match.
This model gained traction first in the U.K. and Europe, then rippled into the U.S. As more acquiring licenses opened up, barriers fell, and agility, innovation and customer experience began to matter more than legacy ties.
Why New Payment Methods Struggle To Break Through
When people ask why new payment methods like open banking haven't exploded in markets like the U.K. or U.S, the answer comes down to a few key points: entrenched networks, superior user experiences and the lack of a true 'sign-up moment.'
Strong companies like Visa and MasterCard want to keep their structures firmly in place. They're deeply embedded across merchants, banks and consumer habits due to the sheer entrenchment of their systems globally.
When open banking launched, it wasn't offering a dramatically better experience for consumers in the U.K. and U.S., because we already have systems such as Apple Pay. And looking at it from a user experience perspective, Apple Pay and open banking are the same. You tap, you authenticate with Face ID or Touch ID, and you're done. There was no compelling reason for the average consumer to switch to something new.
Compare that to markets like India or China, where open banking services like WeChat Pay, PayTM and UPI emerged because services like Apple Pay or Google Pay weren't established. Those ecosystems were wide open for disruption because the baseline experience was still more manual.
Beyond that, there's the 'sign-up moment.' In London, for example, when the London Metro enabled direct TAP access with your bank card during the Olympics, it created a huge inflection point. Millions of people were given a reason to use contactless payments seamlessly and necessarily. Open banking never had a moment like that in Westernwestern markets, a large-scale, practical reason for consumers to try something new.
Without a better experience and a catalyst moment, new payment methods have struggled to break through. The bar for changing consumer behavior in payments is incredibly high, and Visa, MasterCard and contactless wallets still meet or exceed that bar.
The Critical Role Of POS Evolution
The future of payments is about fully integrated POS systems. That's why Fiserv acquired Clover, and Square bundled payment processing with its POS offering. Controlling both sides lowers costs and deepens merchant relationships.
But scaling from small businesses to enterprises is tough. Large retailers can't afford one minute of POS downtime—it would mean a massive loss of revenue. Enterprise businesses demand industrial-grade reliability, uptime and performance, making it difficult for some providers to move upmarket. They need to be able to guarantee operational scale.
How Customer Expectations Are Driving Change
Customer expectations are now the biggest force reshaping payments. Consumers want the fastest, best and cheapest experience.
That's why buy now, pay later (BNPL) models like Klarna took off. They made it easy: users were already signed up and could split payments instantly. The experience stayed fast and simple, while purchasing power improved.
Today, it's not enough to offer cheaper processing behind the scenes. You have to improve the customer experience while making it easier on their wallets. Without both, adoption stalls.
What's Next: Wallets, Credit Products And Embedded Finance
The next wave of disruption will come from smarter credit products, digital wallets and embedded financial services.
Credit options like BNPL are just the beginning. Companies like Adyen and Stripe already offer microloans based on real transaction histories, not outdated credit scores. Instead of applying for financing the old way, retailers can access capital instantly, based on how their business is performing.
Wallets will also keep expanding. Apple Pay offers a great tap-to-pay experience, but the future is about more than speed. Wallets will soon integrate payment, financing, loyalty and even identity into one seamless platform.
We're also starting to see true frictionless commerce with biometric payments. On Yas Island in Abu Dhabi, visitors link their Face ID to a wallet and pay for rides, food and shopping without pulling out a card or phone. It's faster, smarter and better for both consumers and merchants.
The payments industry is moving faster than ever, but the challenges of legacy systems, customer expectations and operational scale aren't going away. Success will come to those who can blend the best of both worlds, delivering smarter, more affordable solutions without sacrificing the seamless experiences that consumers and businesses demand.
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