LAYER ONE
Critical barriers and drivers: Navigating a landscape of requirements
PERCEPTION CHECK
Is the payments industry falling behind
other industries when it comes to technological innovation?
Change is slow and stuck in old systems
Innovation is moving things forward
If the industry is moving, why is so much potential still untapped?
Critical barriers and drivers:
Navigating a
landscape of requirements
The research survey data paints a clear picture: The payments industry has a reputation as one of the world’s most innovative industries, second only to information technology.
This reputation sets lofty expectations. Customers, regulators, and partners all assume the industry will deliver experiences that work and are faster, safer, and smarter. To do that, progress must keep pace with those expectations.
87%
Information technology
Survey prompt: Please rank the following industries in order of how quickly they evolve and innovate (within the payments industry). Please rank based on your perceptions with 1 being the fastest-moving and 10 being the slowest-moving. N = 500 responders. N = 5,000 responses.
The Perception Paradox: Leadership vs. readiness
Most executives appear confident about the pace of payments innovation. Only 12% believe it’s falling behind other sectors on technological innovation. However, the same group admits they are not making full use of the technology already available (55%), and less than half (44%) completely agree payments innovation is a C‑suite priority.
12%
agree to completely agree that the payments industry is falling behind in tech innovation
55%
moderately agree to completely agree that technology products and solutions are underutilized
44%
agree to completely agree that their C-suite prioritizes payments innovation
The survey results show a contrast between perception and reality. While companies believe they’re leading (69%), they also believe they’re not using technology to its full extent. In other words, the industry’s confidence is high, but many organizations remain unprepared to move at the speed customers and regulators now expect.1
As the cost of delay keeps rising, hesitation has a price. If the technology is ready, what’s keeping companies from adopting it?
Confronting the barriers:
The forces holding back progress
Our research highlights four major obstacles slowing payments innovation:
Cybersecurity and fraud
The top barrier for 77% of respondents. Fraudsters are more sophisticated than ever. Security must be treated as a collective priority: ongoing renewal of defenses, pre-emptive action against emerging risks, and collaboration across the ecosystem, all without adding friction for customers.
Regulatory complexity and fragmentation
63% list regulatory requirements as a major barrier. Institutions must navigate a patchwork of local, regional, and international rules and regulations. Compliance consumes time and resources that could otherwise support innovation, yet deprioritizing regulation is not an option.
Organizational resistance to change
53% cite resistance. The issue is likely rooted in culture and reinforced by organizational structures and budget constraints, reflecting impediments that slow decisions and coordination.2 Executives and organizations are better served by aligning payment strategies across the business units within their companies to prioritize organizational and capital priorities.
Legacy systems and infrastructure
44% identify legacy platforms as a major barrier to innovation. While these systems are difficult to modernize, they continue to limit agility, increase maintenance costs, and slow the rollout of new services. In this context, “newer technology” refers to modular, API-first platforms, intelligent payment hubs, or AI-driven fraud orchestration.
Security and compliance are table stakes in payments—the absolute requirements to stay in business. However, while they are necessary, they are not sufficient to be a force in driving significant change.
77%
cite security and fraud risks as a barrier
63%
say regulatory complexity and fragmented requirements slow down innovation
53%
say organizational resistance to change is a barrier
44%
say legacy systems and infrastructure are slowing innovation
- cite security and fraud risks as a barrier: 77%
- say regulatory complexity and fragmented requirements slow down innovation: 63%
- say organizational resistance to change is a barrier: 53%
- say legacy systems and infrastructure are slowing innovation: 44%
Survey prompt: What are the biggest barriers slowing down innovation and development in the payments industry? Please rank your top 5 barriers, with 1 being the biggest barrier. N=500 responders. N = 2,500 responses.
The engines of change:
Forces driving the industry forward
There are several drivers pushing to accelerate progress and the pace of innovation.
Evolving customer expectations
79% of respondents name customer demand as the most significant catalyst. Consumers expect payments to be instant, easy, and reliable.3
Regulatory mandates
As we saw before, 63% view them as a barrier, but 61% also see them as an industry driver. Mandates like ISO 20022, open banking, and real‑time payment schemes set new standards for interoperability, speed, and transparency, raising the baseline that all market participants must meet.
Competition from fintechs and big tech
While some may be threatened by new entrants like fintechs and big tech, most (58%) see the competition as driving the industry forward. When asked what types of companies are setting the pace, fintech startups come out ahead. However, while fintechs are seen as setting the pace overall, merchants point more often to big tech as the primary force. They’re feeling the pressure of big tech’s scale, fearing disintermediation and lost sales as platforms like Amazon capture customer relationships through personalized recommendations, low prices, and frictionless delivery. Meanwhile, financial institutions and service providers4 place slightly greater emphasis on fintech innovation, viewing fintech startups as the faster-moving threat, reshaping customer expectations with sleek digital experiences and specialized solutions.
79%
cite evolving customer expectations as a driver
61%
say regulatory mandates are driving change
58%
state competition from fintechs and big tech is moving the industry forward
- cite evolving customer expectations as a driver: 79%
- say regulatory mandates are driving change: 61%
- state competition from fintechs and big tech is moving the industry forward: 58%
Survey prompt: What are the biggest drivers pushing the payments industry forward? Please rank your top 5 drivers, with 1 being the biggest driver. N = 500 responders. N = 2,500 responses.
The duality of regulations, standards,
and requirements: Barrier and driver
As we’ve seen, maintaining compliance is more than just another barrier. It has always been a uniquely defining driver in payments. On one side, a patchwork of local, regional, and international requirements force organizations to invest heavily in compliance. For many, it feels like a drain on time and resources that could otherwise drive innovation.
Conversely, however, regulatory and industry mandates can also accelerate progress. Mandates for data standards, open access, and real-time payments compel institutions to modernize and collaborate within and across borders.⁵
This shows that, paradoxically, the same rules that seem to slow down innovation also open the door to faster, safer, and more connected systems.6
The challenge for rising leaders is to treat regulation and standards as a strategic driver. Organizations that see compliance as an opportunity position themselves to innovate, build trust, and navigate changing market shifts.
The path is clear:
The leaders in payments are those who modernize with intent, orchestrate with intelligence, and treat regulation as a motive for innovation. Today’s landscape is shaped by opposing forces: powerful drivers promoting change and persistent barriers slowing its impact. Long-term success belongs to the organizations that can convert this tension into advantage, advancing quickly enough to lead while building resiliency to endure.
