Here’s a thought no one in the payments industry likes to say out loud. A lot of the infrastructure that was supposed to replace old things has become old things.
Banks Built digital front ends. Financial technology Slick applications built. But underneath, the issuer’s processing layer, the part that actually decides what happens when someone taps the phone or swipes a card, hasn’t kept up with the pace. Both sides of the industry are starting to feel it.
This tension was at the heart of the conversation between Payment science CEO Jeff Parker and piments CEO Karen Websterafter the company announced on May 12 that it had raised $175 million from Investorsincluded APIS PARTNERS and Ambition partners.
But the conversation wasn’t really about money. It was about the importance of this money now.
The problem of the next generation
Webster noted that many companies that were once considered leaders in innovation are themselves aging and becoming obsolete. Infrastructure cycles are compressed. The gap between the “new” and the “old” has never been wider.
Advertisement: Scroll to continue
Parker described the traditional issuer processing market as one still dominated by platforms created decades ago.
“It’s homogeneous,” he said. “It’s completely inflexible in terms of what it can offer.”
What the neobanks want now is something new TechnologyHe said, not more customization. They want to provide flexibility through unified infrastructure. This is a crucial distinction. Digital native banks expect mobile-based controls, virtual card issuance and wallet provisioning to work in real-time, across multiple markets, without custom creation each time.
Paymentology’s answer is to reject the custom route. Instead of building one-time integrations that accumulate as technical debt, Parker said Paymentology embeds features into the underlying platform so that every customer benefits.
“If a customer wants something done, we build it for everyone,” he said. “We try to adapt to it through configuration rather than building code.”
He said the proof is in the numbers. Paymentology supports customers in nearly 70 countries and saw transaction volume jump 65% in FY2025.
Why Nobody Switches (Until They Do)
Issuer processing is an inherently difficult business. Switching costs are high, contracts are multi-year, and when the system works, no one wants to touch it.
“It’s a very strong company in terms of recurring revenue,” Parker said.
But institutions move, and when they do, it’s usually for one of two reasons.
The first is geography. Financial institutions expanding across borders do not want to integrate different processors into each new market. They want one provider, one integration, and one operating model.
The second is a slower realization about their technology stack.
“What we’ve seen in the last few years across the industry is a lot of work on the mobile app,” Parker said. “But at some point, basic resilience and innovation Really driven by the infrastructure behind it.
In other words, you can only polish the front end so much before the back end becomes the bottleneck. This gap, between what customers see and what the infrastructure can actually do, is where Paymentology sees its biggest opportunity.
“There is no single leader or winner in the Next Generation Global Edition processor category,” Parker said.
Digital banks, dubbed Paymentology’s “hero sector,” are particularly hungry for processors that can support rapid expansion while still handling local requirements such as local switch integration and data hosting mandates.
The paradox of simplicity
The conversation then turned to the widening gap between what consumers want and what they are being asked to navigate. They are the customers of the banks that Parker is providing new digital tools to serve.
Webster asked about flexible credentials, which are card products that allow a consumer to switch between debit, prepaid, credit, or buy now and pay later with a single credential. It’s an idea that sounds neat but requires serious infrastructure underneath.
Demand is early but growing, driven by fundamental tension, Parker said.
“Customers increasingly want things to be simple,” he said. “But the options available to these customers are becoming increasingly complex.”
This complexity is not limited to cards. Parker said Paymentology plans to expand its support for alternative payment methods over the next two years, including… Stable coin-Related activity and account capabilities to the account.
“We definitely see value in other payment methods,” he said. “Some of the product improvements we are making will look to add other payment methods to our offering.”
The company is already working with stablecoin card programs and sees opportunity at the cardholder level and in the settlement infrastructure. Cross-border payments talks are increasingly weaving together stablecoins, real-time payments and account-to-account transfers alongside traditional card rails, forcing processors to support a broader mix without adding friction, Webster said.
Grow now, go public later
Parker joined Paymentology two years ago, and said he spent most of that time validating the business case and product market fit before deciding the time was right for outside capital.
“As we looked at how we wanted to move the business forward over the next three to five years, we felt that now was the right time to bring on additional shareholders,” he said.
When Webster asked directly whether the financing changed the timeline for a potential IPO, Parker did not close the door but said the priority was execution, not exit.
“We still believe that although our growth is good and we’re happy with that, I think we’re still very early in the journey,” he said.
$175 million will be allocated to expansion, product development and hiring. But for Parker, the increase is less about the balance sheet and more about sending a signal.
“Raising this kind of money helps put our name on the map,” he said. “But for us, it’s very much about highlighting our ambition for growth, our ambition around innovation, and the desire to continue to accelerate our path in terms of product development.”
Paymentology isn’t just about trying to win the next deal, although that’s part of the plan. It’s trying to build the platform that actually makes the next generation of payments infrastructure last.
