For years, many businesses proclaimed they would never transition their payments to SaaS. Even as everything else moved to the cloud, financial professionals remained adamant that payment services and data would stay in-house. The data was considered highly sensitive, and few were willing to risk storing it outside their walls.

But the benefits of Payments-as-a-Service (PaaS) have upended that thinking. More organizations are now realizing that leveraging external providers is transforming their payment structures—both for today and the future. In a Payments Journal Podcast, Mike Vigue, Head of Product at Finastra, and James Wester, Co-Head of Payments at Javelin Strategy & Research, discussed how Payments-as-a-Service can give organizations of all sizes access to the latest technology, enhancing resilience and agility while enabling mid-market clients to compete with much larger institutions.

Staying Ahead of the Curve

Payment modernization is often viewed as a destination—a point at which payment operations will eventually arrive. In reality, there is no endpoint. Technology, regulations, and customer expectations will continue to evolve. Future changes will require systems that are not monolithic, but agile—enabling developers to build solutions that have yet to be conceived.

While the exact direction of change is uncertain, it’s clear that tomorrow’s requirements will call for systems that are more modern. That means being cloud-native, API-first, and event-driven.

According to Vigue, organizations that aren’t allocating 20% to 25% of their roadmap to maintaining modern infrastructure and technology risk falling behind. And the further they fall, the harder it becomes to develop new features. Staying modern enables technology to do more—and to do it faster.

Changing on the Fly

Nobody has the luxury of stopping time for a year and a half to develop a new platform. PaaS offers modular solutions like microservices that allow teams to modernize one piece of the application at a time and isolate service failures from bringing the entire application down. The process involves extracting a particular payment rail out of the platform, developing it in a new modernized way, and then integrating it back into the existing infrastructure—until the team has time to update the rest.

“When I talk to certain customers, particularly about ACH for example, they’re nervous,” Vigue said. “How can you take a bank that’s doing like 300 million ACH transactions a year off of an application that’s been in their business for 15 years, runs off a mainframe and put it on some modern system without bringing the bank to its knees?”

“ACH is 50 years old and it’s kind of been neglected, because banks all have the same technology,” he said. “There’s not a lot of difference in what you get from functionality there. But you can differentiate your services by modernizing them. We’re going to see some changes coming, particularly in 2026. For example, there’s an upcoming mandate from Nacha to do fraud scans against ACH payments. I heard a quote recently that 44% of banks are thinking about looking at their ACH infrastructure over the next 18 months.” ¹

According to Wester, the goal is to reach a point where you can start anticipating some of the changes. “Some of those changes are going to be things that you think that you already do well now,” Wester said. “It’s not just about being prepared to do whatever is coming down the pike, it’s also about how you can improve things you’ve been doing for a very long time.”

These newer tools can result in a more modernized and responsive infrastructure, as the systems are built on today’s architecture rather than that of 15 to 20 years ago. While legacy applications currently offer more functionality, AI can help them catch up and modernize their technology faster.

Resilience and Agility

One key benefit of PaaS is resilience—keeping the payment system operational no matter what happens. Even the best payments application is useless if no one can log into it. Requirements have become so stringent that some clearing systems are now expected to be down for a maximum of two minutes per month. Meeting this standard requires a comprehensive business continuity and disaster recovery plan.

“I previously worked at a different organization that had a third party doing our payment processing for us, and their bank went under,” said Vigue. “That was one thing I’d never really thought about from a disaster recovery plan. Because we were in the accounts payable automation space, we couldn’t send the payments that our customers needed to pay their vendors.”

Another critical element of Payments-as-a-Service is agility. The payments industry is undergoing rapid transformation, from the ISO 20022 changeover to new real-time payment schemes. Banks that want to compete effectively must be agile in this environment. Monolithic applications within legacy infrastructure that take a year to deliver a few enhancements simply won’t be good enough. PaaS enables banks to isolate and modernize specific payment rails—such as real-time or cross-border systems—without overhauling the entire platform. This approach not only accelerates time to market but also allows institutions to position those capabilities alongside offerings from major players, creating a competitive edge.

Building Toward the Future

It’s critical to work with a vendor that has a well thought-out roadmap—one that clearly outlines where the process is headed and how it will evolve over time. A strong partner provides support as new technologies emerge and the payments landscape continues to change.

Roadmaps are essential. Many consist of ideas under consideration, but forward-thinking vendors go further. They’re willing to say, “This is where we’re going, this is what will be happening, and this is what we’re building toward.” That level of clarity allows customers to confidently invest in the process, knowing both what the vendor will be supporting and how they will be supported. The result is that even mid-market organizations gain cost effective access to the sort of technology they would struggle to deliver themselves, positiong them strongly alongside the major players.

“We talk about people adopting Payments-as-a-Service, but frankly, I don’t think some of them are going to have a choice in the future,” said Vigue. “The idea that this is something that you can put off or think about later—no. If you’re not already thinking about where you’re going to be from a modernization standpoint, you’re already behind.

“That’s where Finastra comes into play,” said Vigue. “First and foremost, it’s the people that we have and the credibility we bring by knowing what it’s like to be in their shoes, having done it so many different times. It’s less about the product and more about the ability to get an organization from where it is today to where they want to be in the future.”

¹Source: Celent Dimensions Corporate Banking Survey 2025 (n:227)

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