The Green Sheet Online Edition
April 4, 2025 • 25:04:01
Green Sheet Advisory Board
Secrets of payments industry resilience - Part 2
Through the years, the payments industry has faced numerous curve balls—recessions, disruptive startups and technologies, data breaches, major lawsuits, and onerous legislation, for example. Every time, we've collectively risen to the challenges to not merely stay afloat but to adapt, innovate and thrive.
With this in mind, members of The Green Sheet Advisory Board answered the following questions: 1. Why are we so good at this? 2. And what plans should payments enterprises have in place to surmount curve balls we might face in the next 12 months?
Following is a portion of the responses we received. The first set of responses appeared in our second March issue, 25:03:02. Thank you to all who participated in this discussion.
Adam Atlas, Attorney at Law
- Three things position the acquiring business as fit for survival in turbulent times. First and foremost, acquiring is sales-driven. Like it or not, front-line salespeople lead the way in bringing business from one processor to another. Sales skills cannot be taken away. Indeed, an ISO is often valued as much for its deal-flow (that is, new sales) as it is for its existing portfolio of business.
Second, payments are not optional for merchants: they all need payment processing. The challenge of selling payment services is therefore not in the sale of the service itself, but the products around that core service and the pricing of the underlying service.
Finally, the rails on which payments operate are much much harder to change than we imagined. The first perceived challenge to traditional payment processing, as I recall, was Google Wallet in 2011. A lot of us had a scare that the whole niche industry would be gone in a flash. It didn't disappear, and more seemingly unstoppable challenges have come along since then, with the core function and service remaining more or less unchanged. - Get ready for settlement in stablecoin: Visa Ramp in Europe is already acquiring with settlement in stablecoin. It's just a question of time before the same comes to the United States, in particular with the openness of the current administration to crypto.
Be careful of wiz-bang POS platforms: A number of ISOs have put a lot of eggs in one basket with neat cloud-based POS systems. When those systems fail, ISOs can lose their whole portfolio. ISOs should always have a Plan B system for merchants to use if the primary POS system disappears.
Rod Hometh. RPY Innovations
- Why the payments industry continues to thrive: The payments industry is foundational and evergreen because it serves the fundamental exchange of value for goods and services. As a result, interest in investment remains at high levels regardless of economic conditions. Even when confronted with challenges the payments industry demonstrates remarkable resilience.
By quickly integrating emerging technologies such as mobile wallets and real-time payments, we have been able to not only maintain market relevance but also set new standards for efficiency, security and the customer experience.
In addition, the payments industry’s data-driven approach helps us stay ahead of threats. Rigorous analytics enable real-time detection of fraudulent activity, and ongoing monitoring of legislative changes ensures that we can remain responsive. This alertness is critical when responding to curveballs like data breaches or regulatory shifts.
- Plans payments enterprises should have in place for challenges in the next 12 months?
- Good business fundamentals should remain a priority. Payments enterprises should have robust contingency plans that include diversified revenue streams and scalable infrastructure. Conduct regular stress tests on operational processes, and engage in scenario planning.
- Equally important is the old-fashioned act of maintaining open lines of communication with regulators and industry peers. Stay alert and stay connected to minimize the likelihood of real surprises.
- Maintain agility and flexibility with the expectation of change. For example, we may not know for certain how local and national regulations around fees, consumer protection or privacy will evolve. But we are certain there will be changes and the best companies will be able to respond nimbly to these and other market disruptions.
Dee Karawadra, Impact PaySystem
The payments industry has a Ph.D. in handling curveballs. Recessions? We pivot. Startups trying to eat our lunch? We adapt. Compliance nightmares? We drink … and then we comply. Every time we think we’ve seen it all, something new pops up: regulation changes, lawsuits, fraud schemes that look like they were cooked up in a Hollywood script. And yet, here we are, not just surviving, but thriving.
Why? Because payments isn’t just about processing transactions—it’s about keeping businesses running. When things get tough, merchants still need to get paid, consumers still need to buy, and we still need to find new ways to make all of that smoother, safer and more profitable.
The next 12 months won’t be any different. Here’s what’s coming and how we prepare:
- Embedded everything: Payments alone isn’t enough. If you’re not layering in software, lending or something that makes your merchants’ lives easier, you’ll be left in the dust.
- Regulation: As always, expect more crackdowns on surcharging, compliance headaches and card brands making life interesting.
- AI: AI is coming for fraudsters and underwriting decisions alike. If you’re still making risk decisions like it’s 2010, good luck.
- Changing merchant expectations: The new generation of merchants don’t just want to accept payments; they want a complete business solution. If you’re not offering integrations, automation and insights, someone else will.
Patti Murphy, ProScribes Ink
The resiliency of our industry reflects the entrepreneurial spirit of those who make up the industry, and the fact that payments are the fuel that keeps the economy running.
The second point cannot be understated. In the best of economic times people spend money seemingly with wild abandon. When times are bad they don’t stop spending. They may spend less, but they continue to spend, and much of that spending is tied to credit and debit cards.
But to reflect on my first point, since the first ISO was created, by Paul Green, this industry has been in a state of change. From knuckle busters and phone authorizations to biometrics and digital wallets, this is not an industry that stands still. People are always trying new ways to get things done faster, better and cheaper.
Recently, I attended the Northeast Acquirers Association meeting where a contest was held pitting four innovators against one and other, each of whom had built a new way of doing business that relied on artificial intelligence. I was floored by the ingenuity of those who participated, especially the winner – a company that leverages AI to help small mom-and-pop shops operate as efficiently and profitably as the big guys, dual pricing and all. This is not to shade any of the other competitors, however.
There was a company that developed an AI-based order-taking system to help understaffed and overwhelmed restaurant owners. Another showcased a system that used AI to help generate positive online reviews of businesses, and yet another had developed a suite of AI-powered products, including one that aims at tamping down merchant churn.
Looking ahead, I think AI and machine-learning tools are the latest pathway to success. We’re going to see more agents, ISOs and other payment services companies leveraging AI and machine learning tools to keep their customers happy, and the customers of those companies happy.
The plain fact is that in this business, as in many others, those that resist the inevitable march of change in the market risk being left behind.
Jeff Shavitz, Shavitz Group
Having spent 25+ years in the payments industry and having started and sold a few ISOs, I remember saying to myself in 2008 and then again in 2015 that the payments industry is over and, “Lets sell our company as it’s a race to zero, while we can still earn a good multiple on the portfolio." Shame on me. I was wrong, as our industry continues to reinvent itself with new offerings and services for merchants and new opportunities to earn money.
The payment processing industry has consistently demonstrated resilience and adaptability in the face of various challenges, including economic downturns, technological disruptions, data breaches, significant lawsuits and stringent regulations.
This adaptability stems from a commitment to innovation, a deep understanding of consumer behavior, and proactive engagement with regulatory changes and becoming an expert in payment processing to share with a merchant how and why your solution will benefit their business.
Current industry landscape
As of March 2025, the payments industry continues to evolve rapidly. Three issues that I focus on with my colleagues:
- Artificial intelligence (AI) integration: AI is increasingly being utilized to personalize payment experiences and enhance fraud detection capabilities. Advanced algorithms analyze transaction patterns in real-time, identifying potential risks and improving security measures.
- Integrated payments including SAAS fees and embedded payments for niche vertical markets: In my opinion, being a generalist is no longer a methodology to financial freedom in the payments space. Become an expert in a category and own that vertical.
- Real-time payments: The adoption of real-time payment systems, such as the Federal Reserve's FedNow service launched in July 2023, is transforming transaction processing by enabling instant fund transfers, thereby improving cash flow for businesses and consumers alike.
I recently started a new ISO for a specific vertical, and instant funding has proven to be very powerful – plus, very profitable as we can charge an additional 1.50 percent for this service. Cash is king, and giving merchants access to immediate funding is very powerful—versus waiting until the next day.
Impact of the Trump Administration
The second term of President Donald Trump has introduced several policy shifts affecting the payments industry. Without getting into a political discussion (which I won’t), I will say that the uncertainty of the markets which has affected the stock markets with ups and downs has adversely affected many of my merchants' monthly sales – which, in turn, affects the profitability of our monthly residuals.
Cryptocurrency and stablecoin policies: The administration has shown a supportive stance toward cryptocurrencies and stablecoins, encouraging traditional financial institutions to explore these digital assets. Major banks and fintech companies are entering the stablecoin market, aiming to enhance cross-border payment efficiency. Although I am not very versed in this space, I would love to learn from others who have taken a real position in this category.
By focusing on innovation, niche marketing and regulatory awareness, payments enterprises can continue to adapt and thrive amid the industry's evolving landscape. With all the technology that continues to enter our space, I still preach that great payments salespeople will always have a great business for the years to come.
Continue to do the simple things that differentiate you from the competition. 
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