The Future of Payment Infrastructure: Open Banking, APIs, and Beyond

• The future of payment infrastructure is shifting from closed, proprietary systems to open, API-driven networks enabling real-time payments, embedded finance, and seamless integration across platforms—with open banking adoption reaching 63.8 million users in Europe and 50+ million in the US by 2024.

• Open banking and payment infrastructure are converging to enable account-to-account (A2A) payments that bypass card networks, reducing transaction costs by 50-70% while providing instant settlement and enhanced data for merchants and consumers.

• Payment APIs are becoming the universal interface for accessing multiple payment rails, methods, and services through single integrations, enabling developers to build sophisticated payment experiences without managing complex banking relationships and compliance requirements.

• Embedded payments are transforming how commerce happens as software platforms, marketplaces, and vertical SaaS providers integrate payment capabilities directly into their workflows, creating a $138 billion market opportunity by 2026.

• Next-generation payment rails including FedNow, PIX, UPI, and real-time payment networks are replacing legacy batch-processing systems with instant, 24/7 settlement, fundamentally changing payment economics and enabling new use cases from instant payroll to real-time invoicing.

Open banking regulations have catalyzed fundamental changes in payment infrastructure by mandating that banks provide API access to customer account data and payment initiation capabilities.

Regulatory Drivers

Europe's PSD2 (Payment Services Directive 2) pioneered open banking, requiring banks to provide third-party access to customer accounts with consent. The UK's Open Banking Implementation Entity accelerated adoption with standardized APIs. Brazil's Open Finance initiative expanded beyond payments to investments and insurance. According to data from Juniper Research, global open banking users will reach 864 million by 2027, up from 150 million in 2023.

Account-to-Account (A2A) Payments

Open banking enables direct bank-to-bank payments bypassing card networks. This reduces merchant costs from 2-3% (card interchange) to 0.1-0.5% (A2A fees), provides instant payment confirmation and settlement, eliminates chargebacks and fraud associated with cards, and delivers rich payment data for reconciliation.

Companies like GoCardless, Plaid, and TrueLayer have built businesses on open banking payment infrastructure, processing billions in A2A transactions.

Data-Enriched Payments

Open banking and payment infrastructure convergence enables payments with contextual data including real-time balance verification before payment, transaction categorization and enrichment, and affordability assessment for lending decisions. This data transforms payments from simple money movement to intelligent financial interactions.

Payment APIs are becoming the abstraction layer enabling developers to access complex payment infrastructure through simple, standardized interfaces.

Unified Payment Orchestration

Modern payment APIs provide single integrations accessing multiple payment methods (cards, bank transfers, digital wallets, buy-now-pay-later), payment rails (card networks, ACH, real-time payments, wire transfers), and geographies (local payment methods across 50+ countries).

Stripe, Adyen, and Checkout.com exemplify this approach, enabling merchants to accept hundreds of payment methods through one API integration. According to research from McKinsey, payment orchestration reduces integration costs by 60-80% while improving authorization rates by 3-5%.

Embedded Payment Infrastructure

API-based payment solutions enable non-payment companies to embed payment capabilities including payment acceptance for platforms and marketplaces, payout distribution for gig economy and creator platforms, and financial account creation for neobanks and fintech apps.

This embedded payments trend is creating massive market opportunities. According to analysis from Bain & Company, embedded finance including payments will generate $230 billion in revenue by 2025.

Developer-First Design

Payment APIs prioritize developer experience through comprehensive documentation and SDKs, sandbox environments for testing, webhook-based event notifications, and transparent pricing and error handling.

This developer-centric approach accelerates integration from months to days, democratizing access to sophisticated payment infrastructure.

Legacy payment systems process transactions in batches with multi-day settlement. Next-generation payment rails provide instant, 24/7 settlement fundamentally changing payment economics and use cases.

FedNow (United States)

Launched in July 2023, FedNow provides instant payment settlement between US banks 24/7/365. This enables instant payroll, real-time bill payments, immediate merchant settlement, and instant refunds and disbursements.

While adoption is gradual, FedNow represents the most significant US payment infrastructure upgrade in decades. According to data from the Federal Reserve, FedNow processed over 10 million transactions in its first year, with volume accelerating as more banks connect.

PIX (Brazil)

Brazil's PIX instant payment system, launched in 2020, achieved remarkable adoption with 140+ million users and 3+ billion monthly transactions by 2024. PIX enables free, instant person-to-person and merchant payments using QR codes or account identifiers, dramatically reducing cash and card usage.

PIX demonstrates how modern payment infrastructure can achieve mass adoption when designed for simplicity, speed, and low cost.

UPI (India)

India's Unified Payments Interface (UPI) processes 10+ billion transactions monthly, making it the world's largest real-time payment system. UPI enables instant bank-to-bank payments through mobile apps, QR codes, and voice commands.

UPI's success shows how open, interoperable payment infrastructure can transform entire economies. According to research from NPCI, UPI accounts for 75% of digital payment transactions in India.

Other Real-Time Systems

The UK's Faster Payments, Europe's SEPA Instant, and Australia's NPP provide similar instant settlement capabilities. Globally, 70+ countries now have real-time payment systems, with more launching annually.

Embedded payments represent the future of payment infrastructure as payments become invisible infrastructure within broader software experiences.

Vertical SaaS Integration

Software platforms serving specific industries (healthcare, real estate, logistics) are embedding payment acceptance, invoicing, and payout capabilities directly into their workflows. This creates superior user experiences and generates additional revenue streams.

Toast (restaurant POS), Mindbody (wellness), and ServiceTitan (home services) demonstrate how vertical SaaS platforms capture payment economics while improving core product value.

Marketplace and Platform Payments

Marketplaces require sophisticated payment infrastructure including split payments to multiple parties, escrow and delayed settlement, and compliance with marketplace facilitator laws.

Stripe Connect, Adyen for Platforms, and similar solutions provide this infrastructure through APIs, enabling platforms to focus on core business rather than payment complexity.

Creator Economy and Gig Payments

Platforms paying creators, freelancers, and gig workers need instant, global payout capabilities. Modern payment infrastructure enables real-time earnings access, multi-currency payouts, and flexible payment methods (bank transfer, digital wallets, cards).

The future of payment infrastructure requires different technical approaches than legacy systems.

API-First Architecture

Build payment systems as API-first platforms enabling easy integration by internal and external developers. Prioritize developer experience, documentation, and SDKs.

Multi-Rail Strategy

Support multiple payment rails (cards, ACH, real-time payments, wires) through unified interfaces. Route transactions to optimal rails based on cost, speed, and use case requirements.

Real-Time Processing

Architect systems for real-time transaction processing, authorization, and settlement rather than batch processing. This requires event-driven architectures, high-availability infrastructure, and robust monitoring.

Compliance and Security by Design

Embed compliance (PCI DSS, PSD2, AML) and security (tokenization, encryption, fraud detection) into infrastructure rather than bolting on later. Modern payment infrastructure must be secure and compliant by default.

For Fintech Founders

Leverage modern payment APIs and infrastructure rather than building from scratch. Focus on differentiated user experiences and business models rather than infrastructure. Choose payment partners supporting multiple rails and methods for flexibility.

For Banks

Invest in API infrastructure and real-time payment capabilities to remain competitive. Partner with fintech companies rather than viewing them solely as competitors. Modernize core banking systems to support real-time processing and open banking requirements.

For Payment Providers

Build developer-friendly APIs and comprehensive documentation. Support emerging payment rails (FedNow, real-time payments) alongside legacy systems. Provide payment orchestration capabilities managing complexity for customers.

For Developers

Prioritize payment partners with strong APIs, documentation, and support. Design payment flows for multiple methods and rails from inception. Implement robust error handling and reconciliation for payment failures and edge cases.

Despite exciting opportunities, the future of payment infrastructure faces challenges including fragmented standards across geographies requiring localized approaches, regulatory complexity varying by jurisdiction and payment type, legacy system integration as new infrastructure must coexist with old, and security and fraud concerns as payment methods proliferate.

Looking forward, expect continued evolution including cryptocurrency and stablecoin integration into mainstream payment infrastructure, central bank digital currencies (CBDCs) launching in major economies, AI-powered payment optimization routing transactions across rails for optimal cost and speed, and biometric and passwordless authentication becoming standard for payment security.

According to analysis from Gartner, by 2030, 80% of payment transactions will flow through API-based infrastructure, with real-time settlement becoming the default rather than exception.

How should companies choose between building payment infrastructure in-house versus using third-party APIs?

Build in-house only if payments are core competitive differentiation and you have substantial resources (typically $10+ million and 2+ years). For most companies, third-party payment APIs provide faster time-to-market, lower costs, and better functionality. Evaluate payment partners on API quality and documentation, supported payment methods and rails, geographic coverage, pricing transparency, compliance and security capabilities, and developer support and community. Companies like Stripe, Adyen, and Checkout.com provide enterprise-grade infrastructure through APIs, eliminating need for most companies to build from scratch.

What are the cost differences between traditional card payments and open banking A2A payments?

Traditional card payments cost merchants 2-3% in interchange and processing fees. Open banking A2A payments cost 0.1-0.5%, representing 50-70% cost reduction. For a business processing $10 million annually, this saves $150,000-$250,000 per year. However, A2A payments currently have lower consumer adoption than cards, requiring merchants to support both. As open banking adoption grows, expect A2A payments to capture increasing share of transaction volume, particularly for high-value transactions where percentage-based card fees are most expensive.

How can businesses prepare for real-time payment infrastructure?

Modernize accounting and reconciliation systems to handle real-time transaction flows rather than batch processing. Update treasury and cash management processes for instant settlement. Implement real-time fraud detection and monitoring as batch review windows disappear. Connect to real-time payment rails (FedNow, RTP, local instant payment systems) through banking partners or payment service providers. Design customer experiences leveraging instant settlement (immediate refunds, instant payouts, real-time invoicing). Train finance and operations teams on real-time payment workflows. Start with pilot use cases before full migration from legacy systems.

This article provides general information about payment infrastructure and should not be construed as technical, legal, or financial advice. Payment regulations, technical requirements, and best practices vary significantly by jurisdiction and use case. Companies should engage qualified payment consultants, legal counsel, and technology partners when building or integrating payment infrastructure.