Modernizing the Payments Stack for Operational Efficiencies and Revenue Growth
- Emerging technologies now power modern, scalable bank payment stacks
- APIs and events enable real-time routing, pricing, and settlement decisions
- Payments modernization aligns efficiency, revenue, experience, and integrated fraud and risk controls
The PaymentsJournal article “How Emerging Technologies Are Powering the Modern Payments Stack,” by Wesley Grant, explains why modernizing payments infrastructure has become a strategic priority for banks, rather than just an IT clean-up exercise. Drawing on Javelin Strategy & Research’s report “Unpacking the Modern Payment Stack: What Matters Most for Banks,” it outlines how APIs, event-driven architecture, and cloud-native infrastructure form the core of a next-generation payments stack designed for flexibility, speed, and continuous innovation.
APIs as the Heartbeat
Mr. Grant, quoting analyst Matthew Gaughan, describes the application programming interface (API) as “the heartbeat of the new paradigm.” A modern payment stack should, Mr. Gaughan says, “provide the functionality to expose and consume customer-permissioned financial data via standardized restful APIs,” enabling banks to build, modify, and launch products more quickly. These APIs -- whether owned by the bank or delivered by a core provider -- let institutions adjust pricing and routing logic across different payment rails, turning previously static systems into dynamic platforms that can react to emerging rails and customer expectations for instant settlement.
Mr. Gaughan highlights event-driven architecture as a key shift away from traditional batch processing, noting that event-driven design “allows banks to respond to real-time triggers and different data flows,” supporting more efficient payments and enabling responsiveness to real-time payment types while acknowledging that batching will not disappear entirely.
Cloud computing is presented as equally foundational: Mr. Grant emphasizes that an optimized stack should be truly “cloud-native,” built on scalable, containerized, service-oriented infrastructure so banks can better handle payment volume spikes and deliver 24/7, real- or near-real-time settlement.
Revenue Growth and Operational Efficiencies
Mr. Gaughan notes in the article that "APIs can also signal potential growth or revenue opportunities within a business.” APIs enable financial institutions to quickly build, modify, and launch new products in a flexible, dynamic way.
Additionally, show which APIs are most used and how third-party developers engage with them. This usage data can help banks identify services worth monetizing—either by charging other corporate clients for API access or embedding banking services into partner ecosystems—creating new revenue streams while enhancing customer value.
APIs is a method that many banks, or their core providers, use to leverage new AI technologies like OrboAnywhere. Check images and meta data can be transferred instantaneously to the AI-powered solutions and receive results within seconds -- enabling true straight-through processing for check recognition and real-time check fraud detection for on-us and deposited items. This not only provides operational efficiencies, but also detection and review of fraud items before funds are lost.