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In what areas are banks the most behind in terms of their payments infrastructure?

In our view, payments is one of the primary value propositions of a bank: store value, move and receive value. Yet most banks treat it as plumbing, not a product. The result is a set of specific capability gaps that are increasingly hard to defend.

Many smaller banks and credit unions don't yet have connections to all payment rails, let alone the ability to route intelligently across ACH, RTP, FedNow, Zelle, and wire from a single platform. The rails that are connected often sit on different payment hubs — older platforms that can't be easily upgraded and don't support newer payment rails. That makes something as simple as choosing the optimal rail for a given transaction either manual or impossible.

Real-time processing capability is limited or absent. The cores were built for batch. In a world where same-day ACH limits are rising and RTP and FedNow expect instant settlement, batch-native architecture is a fundamental constraint, not just on speed but on the fraud, risk, and exception-handling processes built around it.

Many banks don't have API layers exposing payments as a service. They can't offer payment initiation, status, or reporting through modern interfaces, either internally across business lines or externally to partners and clients. That excludes them from embedded finance and banking-as-a-service entirely.

Payments data is siloed. There's no consolidated view of transaction flows across business lines, which means limited visibility into cost, performance, and customer behavior. And support for richer messaging standards like ISO 20022 and capabilities like request-for-payment remains thin.

Cross-border payments remain one of the least modernized areas. While domestic rails are getting faster, international payments still run through correspondent banking networks that are slow, opaque, and expensive. Fintechs have moved aggressively into this space with faster settlement, transparent pricing, and better tracking. For banks, particularly those serving commercial and SME clients, this isn't just an infrastructure gap — it's a revenue protection problem. Customers have seen what better looks like — fintechs have set a new baseline, and expectations have moved with it.

Card issuing infrastructure for embedded finance is another growing gap. Many banks still rely on legacy issuer processors built for traditional retail and commercial card programs. Those platforms are not well suited to API-driven card issuing, virtual cards, or tokenization use cases. As that market grows, banks without modern program management and issuer processing infrastructure will find themselves missing out on a significant area of payments growth.

These aren't emerging risks. They're current gaps. And they compound — each one makes the others harder to close.

What are 3–4 ways banks can modernize their payments infrastructure to keep up with faster payment trends?

First, create a centralized payments product function. This is organizational, not technical, but it's the most important move. Someone needs to own strategy across every rail, every business line, and every vendor. Without that, each line of business optimizes locally and the bank never gets to a coherent infrastructure.

Second, implement a modern payment hub. This is the simplest path to multi-rail support with a lower compliance burden. Every time TCH or the Fed introduces something new, that's uplift work. A hub forces all payment flows through one orchestration layer. When you unlock a capability, you unlock it for every business line at once. Done well, that means anyone initiating a payment can see the available rails and understand the cost, speed, and settlement trade-offs in a single view. Over time, this evolves into intelligent payment orchestration — routing each transaction dynamically based on cost, speed, risk, amount, time of day, and customer preference. That capability is increasingly becoming the strategic control point in modern payments infrastructure.

Third, monetize payments through the hub's API layer. Modernization needs a funding model. Once you have clean APIs, you can expose payment capabilities to partners and fintechs. That turns infrastructure investment into a revenue line, not just a cost.

Fourth, upgrade fraud, risk, and exception-handling operations for real-time. Most banks run fraud detection in batch, processing exceptions a few times a day. Real-time payments need real-time decisions. Banks will need to make deliberate choices about which exceptions require instant resolution and which can wait until the next business day.

And if there's a fifth priority, it's cross-border. For many commercial banks, international payments are a significant revenue line through fees and foreign exchange margins. As fintechs improve speed, transparency, and pricing in that space, banks with slow, opaque cross-border infrastructure risk losing high-value commercial relationships and the revenue that comes with them.

What specifically is holding banks back? Is it cost? Inertia? Lack of focus?

The absence of a central payments function — which we've covered as the first modernization priority — is the starting point. But there are deeper structural blockers that explain why that function doesn't exist yet.

The technology estate is one. Organic growth, M&A, and separate vendor decisions made by different teams at different times have produced a patchwork of systems that don't talk to each other. The vendor landscape compounds it. A small number of legacy providers control much of the payments technology market for banks and credit unions, and they tend to sell their more established products into that segment. Long-term contracts lock banks into those platforms, making it hard to decommission, simplify, or introduce modern alternatives. Banks end up running two estates in parallel, and the integration between payments and core banking platforms makes transitioning to a modern solution even more complex. That's expensive, slow, and carries significant execution risk.

Cost is a factor, but not in the way it's usually framed. Most banks aren't short on budget. The problem is that the money goes to maintaining the existing estate rather than funding what replaces it. It's a misallocation problem, not a spending problem.

Many banks also can't clearly describe their own payments architecture. Buy-over-build decisions have hollowed out internal expertise, which means they're dependent on vendors for decisions they should own. It's hard to plan where you're going when you can't describe where you are. Smaller banks often have no internal build capability at all, relying entirely on third-party vendors. Compare that with neobanks, which have large engineering teams that ship changes quickly.

And the talent market makes everything harder. Banks need payments product managers with technical vision, but they're competing for that talent against fintechs and platform companies that offer faster career progression, more modern tooling, and equity upside. Most banks can't match the equity, the tooling, or the pace. That's not a criticism — it's a structural reality of competing for highly sought-after talent.

What can banks do to overcome those particular challenges?

The modernization steps we've outlined address the "what." The harder question is how to execute when the blockers are already in place.

Start with the current state. Map every integration, every vendor dependency, every workaround. In our experience, most banks underestimate how much institutional knowledge has been lost through outsourcing and attrition. You can't sequence a modernization program without that baseline.

On talent, use blended models. Working with specialist partners while building internal capability over time is more pragmatic than waiting for the perfect hire.

On vendor lock-in, design every modernization decision around optionality. Will this increase or decrease the bank's long-term flexibility? If the answer isn't clear, that's the answer.

And plan for the transition explicitly. Add new rails through new vendors while running dual estates in parallel, migrating rail by rail until the new infrastructure is proven.

What are the dangers for banks that are behind the curve in payments infrastructure modernization?

Customer loss, and it starts with commercial clients. Businesses with treasury operations feel the infrastructure gap first — they need real-time visibility, multi-rail flexibility, and API access to payment data. When a bank can't deliver that, the relationship moves. On the consumer side, the gap shows up differently but just as clearly. Products like Zelle have set the expectation for instant money movement. Banks that can't support modern rails and the network integrations those products require get left behind on both sides of the equation.

Cross-border is often where the cracks show first. The gaps in speed, transparency, and cost are most visible on international payments, and that's where commercial clients start moving volume to other providers. Once a bank loses cross-border, the broader treasury relationship tends to follow.

The less obvious risk is compounding constraint. Falling behind doesn't just limit today's products — it limits the bank's ability to respond to whatever comes next. New rails, new regulations, new commercial models. Rigid infrastructure narrows strategic options at exactly the moment the market demands more of them. Left unaddressed, customers quietly start looking for alternatives, and by the time a bank notices, the relationship is already moving.

What are some examples of banks that have been doing a good job at payments infrastructure modernization?

The honest answer is that the best examples aren't transformation stories. They're institutions that made payments infrastructure a core strategic bet early and built from there. That's worth naming, because it tells you something about the gap between where most banks are and what good looks like.

Cross River Bank built their own API-driven banking core, COS, in-house and used it to power embedded payments, card issuing, and lending for fintechs at scale. They were early on RTP, added FedNow and push-to-card, and recently launched request-for-payment with Plaid as the first partner. They move over $1 billion monthly in real-time disbursements across RTP and FedNow alone. They built the infrastructure to make real-time the default.

The Bancorp Bank went early on prepaid card-issuing sponsorship and scaled it into one of the broadest BaaS platforms in the market. According to the Nilson Report, they're the largest issuer of prepaid cards in the US and among the largest debit and commercial card issuers. They issue the Venmo Mastercard, among others. They leaned into the operational complexity of supporting diverse fintech programs at scale rather than trying to simplify it away.

Mercury is a useful example from the fintech side. They've built a business banking platform serving over 200,000 companies through a multi-bank strategy with Choice Financial Group and Column N.A. Their recent move away from a legacy bank partner toward institutions with faster ACH and foreign currency wire capabilities shows what infrastructure-driven decision-making looks like from the demand side.

The common thread is intentionality. None of these institutions stumbled into modern infrastructure. They made payments a core bet, built API-first, and invested in compliance and operations to support it. Which is either a blueprint or a warning, depending on where you sit.

SEATTLE AND LONDON — Payforge, the money movement engineering services company, today announced it has been certified as an Adyen implementation partner. Payforge joins a select group of systems integrators worldwide accredited by Adyen to deliver implementations across its full suite of modular financial products — payments, accounts, capital, and issuing.

Under the partnership, Payforge will support merchants and platforms deploying Adyen — covering technical integration, migrations, and go-live. For merchants and platforms, that means expert delivery from a certified partner within predictable commercial parameters. For Adyen, it means faster integrations and faster time-to-transacting for customers.

Payforge was selected for its expertise across payments and embedded finance, and its track record of delivering complex integrations on time and within budget.

"Adyen's single platform API is world-class, but most merchants and platforms don't have payments specialists on staff. They need help implementing the infrastructure, and then getting real value from the data it exposes. That's where we come into play," said Septimiu Mitu, COO at Payforge.

Payforge works with PSPs, merchants, ISVs, and banks globally to design, implement, and evolve payments infrastructure.

SEATTLE AND LONDON — Payforge, the payments-focused engineering firm, today announced a strategic partnership with TSG (The Strawhecker Group), combining deep consulting expertise with hands-on engineering to deliver an end-to-end enablement solution for payments product and technology teams.

The partnership brings together two specialized firms: Payforge, a software engineering company focused on payments infrastructure for PSPs, banks, and fintechs; and TSG, a leading strategy and analytics firm in the payments space. Together, they offer a single solution spanning market intelligence, business and product strategy, architecture, development, and deployment.

Payments companies face growing pressure to modernize platforms, reduce complexity, and scale securely. Yet few partners support both strategic insight and technical execution. The Payforge–TSG model bridges that gap—helping teams move faster with less risk.

"This partnership is a natural fit," said Petru Metzger, CEO of Payforge. "By aligning our engineering capabilities with TSG's strategic expertise, we're creating a powerhouse that can deliver world-class outcomes across the payments industry."

The solution is designed for product and technology teams looking to simplify operations, reduce vendor sprawl, and accelerate delivery. From due diligence and product design to full-platform delivery, Payforge and TSG offer an integrated path from vision to production.

"TSG has long been the go-to for consulting, analytics, and intelligence," said Mike Strawhecker, President of TSG. "Now, with Payforge's engineering capabilities, we give clients even more: the ability to define their vision and build it with precision, speed, and confidence—all under one roof. This partnership is a game-changer for the payments industry."

This collaboration reflects both firms' commitment to helping the industry evolve faster—with less friction and greater clarity.

Learn more at www.tsgpayments.com.