Demand for credit may be rising, but the more pressing issue for issuers is whether their technology stacks can maintain how credit is used now, rather than how it was structured previously.
Stephen PoeChief Product Officer at Payment scienceportrayed the current environment as one in which growth risks masking deeper operational deficiencies.
“When issuers evaluate their credit capabilities, while demand is growing, it can actually create a false sense of security,” he told PYMNTS, adding that relying on legacy systems leaves institutions out of sync with customer behavior.
Credit is everywhere, but expectations have changed
Credit has been an integral part of everyday financial life for a long time, but its role has expanded beyond traditional products. Consumers no longer view credit as a fixed instrument like a card or loan. Instead, they treat it as a way to achieve results and manage liquidity in real time.
Poe stressed that ubiquity alone does not guarantee relevance. The fundamental problem is that customers expect credit to adapt to circumstances as they arise, rather than being forced into predetermined payment structures.
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This shift has changed the way exporters must think about product design, distribution, and risk. Credit is no longer pre-loaded. It is started incrementally at the point of need.
The way consumers experience expenses illustrates this shift. Poe pointed to everyday disruptions such as unexpected vehicle damage to illustrate how financial stress can appear without warning.
In one example, he described a simple fix after hitting a pothole. In another case, a more serious accident resulted in the repair bill exceeding £2,000 (about $2,700). As with any driver and the interaction with the issuer, “at that moment he’s not thinking about what (credit) product I have, he’s thinking about ‘how can I manage this cost,’” Poe said. Flexibility is key – when systems cannot meet this need, friction increases and payment risks rise.
Revolving credit shows its limits
The traditional revolving model, long associated with credit cards, suffers under these conditions. Interest on unsecured balances remains expensive for borrowers who cannot pay in full each cycle.
“A purely rotary model does not work for many customers,” Bo clearly stated. He added that modern consumers value the ability to convert purchases into installments or modify payment terms after the transaction occurs.
Legacy platforms, built on batch processing and siled products, were not designed to support these capabilities. Their structure restricts innovation and slows response times, leaving issuers unable to keep up with evolving demand.
Financial institutions realize that their infrastructure must evolve. However, many of them are still tied to systems that are assembled over time from multiple vendors and integrations.
Fragmented architectures introduce operational friction and limit the ability to design cohesive customer experiences. According to Bowie, “customer needs are not fragmented, but continuous and interconnected.”
This disconnect becomes more apparent when issuers attempt to expand or introduce new products. In many cases, modifying existing software is more difficult than launching new software, leading to a proliferation of separate offerings.
Convert transactions into installments
One of the clearest responses to these challenges is the increasing focus on converting transactions into installments. This approach allows consumers to manage expenses in a way that aligns with cash flow rather than fixed billing cycles.
This flexibility requires infrastructure that can work across payment types and channels. It also requires integration between debit and credit functions, enabling customers to shift transactions as needed.
“Real time fundamentally changes credit because it moves the decision to the moment a transaction occurs,” Poe told PYMNTS. This allows issuers to incorporate contextual data, including merchant type and customer behavior, into underwriting decisions.
The result is a more nuanced approach to risk management. Instead of relying on periodic snapshots, exporters can evaluate exposure on an ongoing basis and adjust conditions accordingly. This supports both risk control and customer experience.
Unified platforms address legacy limitations
Paymentology’s approach focuses on unified platforms designed to replace fragmented legacy systems, Bo said. These platforms consolidate functionality, enabling issuers to manage credit, payments and data within a single architecture.
Bo says the goal isn’t just to simplify technology stacks. Its purpose is to enable “integrated, flexible credit experiences that reflect the way people actually manage their money.”
Unified platforms also reduce the cost and complexity associated with scaling across markets. By building core capabilities once and configuring them to local requirements, issuers can scale without duplicating infrastructure.
The consequences of inaction are becoming more urgent. Poe warned that institutions that rely on legacy structures are already falling behind. He added, “Customers will not wait. Rather, they will move to service providers who can provide what they need.”
Bo stressed that modernization is not an incremental improvement but a necessary response to a redefined market. He added: “This is not a gradual shift, it is a fundamental change in how credit is provided and consumed.”
