The payment industry is massive. In 2025, it generated $2.5 trillion USD in revenue from 3.6 trillion transactions globally. The sector is changing fast with new checkout flows, digital wallets, and slick frontends. But the real shift is happening in the infrastructure: how payments get built, secured, regulated, and embedded into products. There’s a huge incentive for improvements that make payments more cost-effective, more accessible, and easier to handle.

Below, we’ll break down where innovation is happening in payments right now and what it takes to build for it.

What’s in this article?

• What is payment innovation?
  
• How does modern infrastructure support payment innovation?
  
• Why are instant payments and open banking reshaping customer expectations?
  
• How are payment-as-a-service and orchestration layers changing payments?
  
• Where do data privacy, fraud, and compliance concerns slow innovation’s pace?
  
• How can enterprises link payment innovation to systems and compliance goals?
  
• How Stripe Payments can help
  

What is payment innovation?

Payment innovation is a meaningful change in the underlying mechanics of how payments work. A true improvement will either reduce structural cost or reach people who didn’t have access to the system previously. Here are a couple of examples:

• The global payment system costs each customer roughly $1,000 USD per year. They pay part of that cost in nearly every transaction. If a new product or system lowers that number, it’s solving a significant problem.

• Apple Pay built a modern look, but it still settles payments through the same card networks and clearing systems that have existed for decades. M-Pesa in Kenya and Alipay and WeChat Pay in China, on the other hand, built parallel systems for people who didn’t have access to traditional finance.

True innovation builds new networks, speeds up payments, reduces costs, expands reach, or makes the system programmable in ways it wasn’t before.

How does modern infrastructure support payment innovation?

Payments used to be locked inside banks and batch files. Now they’re embedded directly into software products. For example, a ride-hailing app can offer instant driver payouts, or a marketplace can have built-in financing. That makes payments programmable, modular, and even invisible, and it gives the software provider more control.

These are some technologies that support payment innovation.

Application programming interfaces (APIs)

APIs are the core of modern transaction infrastructure: They make embedded payments possible. They enable real-time services for payment acceptance, settlement, identity verification, risk analysis, and foreign exchange. With APIs, companies can build smart routing, dynamic retry rules, and instant recordkeeping. This kind of programmability often causes businesses to redesign nearly everything from onboarding flows to treasuries.

Tokenization

Tokenization is an important security feature of embedded payments. It swaps sensitive data (e.g., card numbers, bank details) for a secure placeholder, which makes payments safer to store and faster to route. For example, in digital wallets, your card becomes a device-specific token that can’t be reused elsewhere.

Banks are also experimenting with tokenized deposits, such as digital representations of real balances, that could move on new networks entirely. This opens the door to continuous, instant, and simultaneous settlement across systems.

Why are instant payments and open banking reshaping customer expectations?

Instant payments and open banking are reshaping customer expectations regarding speed, visibility, and control. Here’s how:

• Real-time payments: These payments are projected to grow by 289% between 2023 and 2030. Demand is growing as customers don’t want to wait for a weekend batch run. But legacy systems weren’t built for instant payments. So behind the scenes, banks are overhauling fraud tools, customer ops, and treasury processes just to keep up.

• Open banking: This allows customers to link accounts across apps, initiate payments directly from their banks, and authenticate instantly without retyping routing numbers. This ability is powering the rise of account-to-account payments, which sidestep card networks entirely.

How are payment-as-a-service and orchestration layers changing payments?

As payments get more complex, businesses are assembling flexible stacks. Rather than spending years building core infrastructure, some opt for prebuilt platforms such as the following:

• Payment-as-a-service (PaaS): Companies can use API to integrate with a platform that handles payments efficiently and at scale. Banks can add new payment methods without rewriting their backends, and nonfinancial companies can embed payments into their products. PaaS can also help a business manage developing compliance requirements around the world.

• Payment orchestration: Payment orchestration platforms act as traffic control. From a range of processors, gateways, and payment methods, they decide in real time where to send a transaction for the best cost, highest authorization rate, or fastest path.

These models give businesses more control without requiring them to manage dozens of integrations. They can toggle providers on or off, respond to outages instantly, and fine-tune for performance across regions.

Where do data privacy, fraud, and compliance concerns slow innovation’s pace?

Payment innovation is often checked by regulations. Data privacy, fraud, and compliance are shaping what’s possible to launch, especially at scale.

Developing privacy rules are tightening scope

Fintechs have to address an ever-changing body of global laws that govern how data is collected, shared, and stored. Payment products often need to pass a privacy test that determines what data you’re using, whether you have permission to use it, and whether you can prove it.

These added layers of protection can slow down progress and increase requirements for launch. That’s why privacy by design needs to be incorporated from the start.

Fraud shifts faster than product teams

The better the customer experience is, the less time there is for fraud detection.

Online payment fraud losses are projected to exceed $360 billion globally by 2028, and 80% of companies experienced payment fraud in 2023. This necessitates investment in smarter prevention measures such as machine learning-driven scoring, behavioral analysis, and dynamic limits. It also means some features get delayed or limited while teams do pressure tests on edge cases.

Compliance is the slowest-moving variable

Compliance often lags behind user experience. A business can’t accept a global payment method if it doesn’t have global compliance coverage, but creating a strong system for compliance takes time. Compliance can be one of the most difficult obstacles for innovation.

How can enterprises link payment innovation to systems and compliance goals?

Resist the urge to build fast. Safety should be your top priority. As you modernize payments, that means communication across product, ops, and risk.

Here’s how to get it right from the start.

Make your build cross-functional

Improvement doesn’t get far without compliance. That’s why high-performing teams tend to involve legal, risk, and ops before the build starts. Up-front collaboration avoids costly rewrites and accelerates approval once the product is live.

Invest in the right tools and partners

You want to redesign support models, treasury operations, and fraud detection to work in real time. That redesign will require picking partners who’ve already solved the most difficult issues, such as settlement timing, Anti-Money Laundering (AML) and Know Your Customer (KYC) coverage, and API reliability. Many businesses are using PaaS platforms to handle these issues since the platforms can shorten time to market and tighten compliance when used well.

Test in production—just not all at once

Use controlled pilots and sandboxes before your launch to test new payment features with real users and measurable risk limits. This builds confidence with regulators and gives teams the signal data they need to expand.

How Stripe Payments can help

Stripe Payments provides a unified, global payment solution that helps any business—from scaling startups to global enterprises—accept payments online, in person, and around the world.

Stripe Payments can help you:

• Optimize your checkout experience: Create a frictionless customer experience and save thousands of engineering hours with prebuilt payment UIs, access to 125+ payment methods, and Link, a wallet built by Stripe.

• Expand to new markets faster: Reach customers worldwide and reduce the complexity and cost of multicurrency management with cross-border payment options, available in 195 countries across 135+ currencies.

• Unify payments in person and online: Build a unified commerce experience across online and in-person channels to personalize interactions, reward loyalty, and grow revenue.

• Improve payment performance: Increase revenue with a range of customizable, easy-to-configure payment tools, including no-code fraud protection and advanced capabilities to improve authorization rates.

• Move faster with a flexible, reliable platform for growth: Build on a platform designed to scale with you, with 99.999% historical uptime and industry-leading reliability.

Learn more about how Stripe Payments can power your online and in-person payments, or get started today.