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Education

Flipping the script: them, which is typically the front-end or authorization
side. The back-end requires extensive coding to a legacy
Visa's platform solution.
Adyen recognized the limitations of legacy processors,
connect especially when entering new markets and geographies,
and built a native, ground up, modern tech-stack payments
solution. Adyen's solution will enable faster integrations
By Ken Musante and open more markets and products, but it comes at a
Napa Payments and Consulting cost. Customers are beholden to Adyen, have limited
integrations, scarce device certifications and are not in a
raditional processors FIS, Fiserv and Global position to negotiate costs.
Payments collectively process over half of all
U.S. originated payment transactions. Some To overcome some legacy issues, Visa and others are
T banks, like Chase and U.S. Bank have their own developing solutions that will elevate development efforts.
processing. All of them have a legacy problem: their code Visa introduced Visa Platform Connect APIs to enable
was outdated decades ago. acquirers and fintechs to process through a direct interface
to Visa—and for all card networks. The connection may
At the millennium, these processors scrambled for COBOL be either via a cloud-based or traditional server. While
developers to ensure the world would not end at the the end points and certifications are limited, it allows for
dawn of the 21st century. To enable this, engineers were instant, embedded connection to Cybersource with all
scrambling to modify two-digit years to four, but because Cybersource's capabilities and integrations.
the code was written in COBOL, they had difficulty
finding engineers who could interpret and modify the This solution will speed time to market and enable fintechs
code. to focus on their own solutions rather than processing
payments. Payment platforms will need to employ and
These same legacy systems continue to power card integrate with a back-end settlement provider, and while
transactions. They are difficult to replace. To do so, the path may take them back to a legacy processor, they
you would need to duplicate the certifications to all may choose an alternative, modern processor to settle
endpoints—every certified device or solution multiplied transactions.
by the number of card brands. Any end-to-end encryption
and the connection to the card brands themselves would To provide context, I reached out to Kapil Pershad, CTO
need to also be certified. of Payzli and Travis Chrisman, President of CoastalPay.
The platform's modern API structure, product stack,
Thirty years ago, a large processor endeavored to ease of integration, and embedded Cybersource gateway
consolidate all of its platforms onto a single platform. This drew Pershad's initial interest. Pershad also found the
failed because of the unique functionality or integration access to robust data sets and the simplified fee structure
within each platform. Out of a dozen or so platforms, only appealing. As Payzli collaborated with the Visa Team,
one was eventually sunset after many years. Pershad appreciated the flexibility and responsiveness in
tailoring the emerging offering to the requirements of a
Thus, these processors maintain monolithic code contemporary payments platform.
repositories that are expensive to upgrade. Nearly all
of their bandwidth is decked out against the card brand Chrisman and Coastal Pay appreciated many of the same
mandates and little if any discretionary projects are features cited by Pershad but mentioned additional,
prioritized. Ideally, new functionality is built outside the specific use cases. Coastal Pay will utilize Visa Direct as
processor as a module. a way to serve gaming clients via push payments. Both
Payzli and Coastal Pay expect to be live in the first quarter
This can work for some features but is impractical for core of 2024.
functions. For example, a gift card solution could exist
entirely as a separate code base and invoked when needed, I remain excited by the prospects and capabilities of a
but this would be difficult if the feature was to evaluate modern authorization provider that may be accessible by
every transaction such as a currency conversion solution. traditional processors and fintechs alike.
Consequently, legacy processors endeavor to maintain the As founder of Humboldt Merchant Services, co-founder of Eureka
existing code base as stable as practical. Payments, and a former executive for such payments innovators as
Overcoming legacy issues WePay, a division of JPMorgan Chase, Ken Musante has experience in
all aspects of successful ISO building. He currently provides consulting
To enable easy connectivity, these processors built modules services and expert witness testimony as founder of Napa Payments
that allow for modern connectivity via API's. While this and Consulting, www.napapaymentsandconsulting.com. Contact him
is needed and allows for much quicker integration, the at kenm@napapaymentsandconsulting.com 707-601-7656 or www.
modules are only effective for the solutions connected to linkedin.com/in/ken-musante-us.
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