There’s a difference between the capabilities of new tools like generative AI or blockchain, and what this technology can actually do for consumers and staff, according to MUFG executive Dorothy Conroy Rule.
“One of the most overrated trends in the payments industry right now is the obsession with ‘shiny object’ technologies that don’t align with what clients truly need or can benefit from immediately,” said Rule, a managing director at MUFG. “In reality, most clients are not yet in a position to embrace these new technology integrations due to their own system limitations or business priorities,” she said.
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Chasing trends
MUFG’s technology projects include developing an application programming interface-enabled payment status feature to offer real-time payment updates and reference numbers directly to suppliers on the bank’s portal to provide immediate, useful information.
“In contrast, using APIs to replace routine batch processes such as daily file transfers would be a poor application of the technology,” Rule said. “Rather than chasing trends, I believe the industry should focus on building solid partnerships with clients and financial technology firms as needed to understand core client needs.”
AI and machine learning is another vexing issue that payment companies must address without giving into hype. Machine learning or AI is probably the most overrated trend in the payments industry, according to
“The adoption worldwide of instant digital payment solutions for corporate use will only increase as we move further into cashless payment volumes globally,” she said. “There are opportunities that are created by account-to-account payments which bypass intermediaries such as credit card and payment processors. Although A2A payments are not new, API technology and the move to open banking have provided the payment rails for A2A payments to take off.”
All AI, all the time
It’s hard to get through a day without coming across artificial intelligence, said Kristy Carstensen, head of treasury management and prepaid for U.S. Bancorp, who in 2024 was named the new leader of a bank unit that sells treasury management and payments to businesses and government agencies. These products address key trends like faster processing and embedded payments. The use of advanced forms of AI is driving innovations in real-time payments and the data analysis that supports linking payments to ancillary services.
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“The industry needs to embrace AI, safely, securely and with measured decision-making,” Carstensen said. “There’s no way around this. The future of payments is decidedly digital, and there’s tremendous value when full digital transformation is implemented on behalf of clients.”
While AI is a trend today, it’s also a lasting part of this new world we live in, Carstensen said. “Very soon, AI will become more than the trend it is now, and it will likely have lasting power beyond anything we can envision today.”
While technology advancements are critical to progress, they can’t be viewed in isolation, said Seema Chibber, executive vice president of product and engineering in North America for Mastercard.
“The broader impact of payments — powering economies, lifting underserved communities, enabling small-business growth and driving cost efficiencies for governments — is frequently undervalued or taken for granted,” she said. “The industry’s role in delivering agility, safety and security across billions of transactions daily must remain at the forefront of its narrative.”
Chibber is responsible for expanding the card brand’s core payments business and advancing the company’s environmental and social governance initiatives. That includes leading business lines such as credit, debit, prepaid and private label cards; and card network products and digital channel developments.
Her work includes focusing on how the payments industry prioritizes solutions that solve tangible problems, such as driving financial inclusion and enabling secure, seamless commerce. Avoiding the buzz includes building tools that make a measurable difference for consumers, small businesses and partners today while laying the foundation for an inclusive, digital-first future, according to Chibber. “It’s about constantly building solutions that are universal to unlock the true impact of inclusion, access and trust,” she said.
Look before jumping
In the payments industry, there is too much focus on robotic processing automation, which takes a task that is done repeatedly and is then automated, said Linda Markcoons, senior vice president and head of client delivery at The Clearing House. TCH’s projects include the real-time payment network and migrating the CHIPS wire payments network — which clears and settles high-value payments, to the ISO 20022, a standard that adds more information to transaction processing to aid faster or digital payments.
Instead of reengineering and improving the process, automation can replicate or even magnify inefficiencies,” she said. “We’ve also seen that overreliance on robotic-type automation can cause knowledge loss, as people in organizations forget the original process steps or context.”
One example of this overreliance on automation could be chatbots or interactive voice response that frequently are less than helpful as they lack a human touch and cause a frustrated customer, according to Markcoons. “However, a well-designed chatbot, enhanced by AI, can be effective if it includes quick access to live agents who can step in when the system detects user frustration.”
Some organizations are automating for the sake of automating, and they do not consider if the original process is helpful or if the automation is truly impacting the customer experience in a positive way. “While automation can be a powerful and useful tool, I believe the customer service aspect must be considered before jumping to automated processes,” Markcoons said.