1064. News: Paymentology raises $175m, Alipay hands shopping to AI, and the FCA probes digital wallets

0:04Laura Watkins:This is Fintech Insider News. This week, Paymentology raises$175 million, Alipay lets shoppers delegate purchases to AI, and the FCA opens a competition probe into MasterCard, Visa, and PayPal. We'll be tackling all of this and more on today's news show.

0:35Laura Watkins:Hello, and welcome to episode 1064 of FinTech Insider News, brought to you by 11FS, the five-time consultancy of the year that works with financial providers, big and small, to build the next generation of financial services. I'm Laura Watkins, Director of Media Marketing here at 11FS, and to help me unpack the biggest and most interesting stories from FinTech and financial services from the last week, I'm joined by a brilliant panel of guests. So first up, we have a welcome return to the show for Jeff Parker, CEO at Paymentology. Thank you so much for joining us today, Jeff. It's a big week for you and Paymentology.

1:09Laura Watkins:And we know that you have some very exciting news that we teased at the top of the show. But before we come to that, can you remind our listeners what it is exactly that Paymentology does? Sure. Thank you for having me again. Paymentology is a next generation issuer processor. And we help fintechs and banks to launch, manage, and scale their card programs around the world. Fantastic. Succinct. Love it. And we will be coming to your exciting news very shortly, so hold fire. But next up on our panel, we have Monica Eaton, CEO at Chargebacks 911. Welcome to the podcast. Please, could you let our listeners know a little bit more about yourself and Chargebacks 911?

1:47Thank you. Chargebacks 911 is a platform provider for dispute resolution and prevention services, and we operate globally. We support issuers, merchants, and payment processors as well as acquires.

2:02Laura Watkins:Fantastic. Thank you. And finally, last but not least, we have a welcome back to the podcast for Fliss Berridge, Director of Blue Strawberry Thinking. Great to see you again, Fliss. Thank you for joining us. Please, can you remind us a little bit about yourself and Blue Strawberry Thinking? Thank you for having me back. Yes, I've been in payments and fintech for over 13 years at both the central infrastructure level at the Fast Payment System and co-founded and exited an open banking fintech called Ordo. And now I help companies with anything from business strategy to legal, regulatory and corporate governance.

2:38Laura Watkins:Wonderful. Thank you. And I'm sure we're definitely going to dig into that expertise very soon. So now we have our panel. Let's get started with our first story, which is today that global card issuer and processor Paymentology raises$175 million in latest funding rounds. This raise is one of the larger fintech infrastructure funding rounds we've seen recently and comes at a time when investor focus increasingly appears to be shifting from consumer facing fintech brands toward the infrastructure powering digital payments behind the scenes. Paymentology operates across 68 countries, supporting banks, fintechs, and embedded finance providers with issuing and processing infrastructure.

3:17Laura Watkins:The funding will support expansion into areas including stablecoins, tokenization, and AI-driven services. The firm also argues that while the global payments market is expected to reach$49 trillion by 2026, much of the infrastructure behind card issuing still relies on older systems that can slow down innovation and limit flexibility. The new funding will support expansion into areas including credit, stablecoin, tokenization, and AI-driven services. So firstly, obviously, it makes sense for me to come to you, Jeff. Who else? Thank you so much for being here today to tell us about this. Firstly, congratulations.

3:53Laura Watkins:175 million is an amazing milestone. Can you tell us more about how you got here and what it is that you're looking to build out from here? Sure. So thank you very much. It's very exciting for us as a business. And I think it's a great recognition of what we've been trying to build over the last few years. I joined the business two and a half years ago, and I think I thought it was a great opportunity, but I didn't realize how big the opportunity was. And I think this is a good signal. I think you're right. I think a lot of the investment over the last few years has really been maybe on consumer-facing apps.

4:28It's been ignoring some of the infrastructure. but I think what people are starting to realize now is consumers want instant and frictionless and they want digital experiences that they're seeing in other providers to really give that to consumers in a timely manner. It's actually the infrastructure which is driving a lot of that innovation and so yeah, we're super excited and we think that this is the start of a really good opportunity for us to become the undisputed global leader in the next generation issue of processing.

5:00Laura Watkins:Amazing. That's such a great ambition. And you look like you're sort of already well on your way to that. But tell me a little bit more about that sort of quote that was pulled out from the press release around that sort of legacy infrastructure still holding the industry back. What does that sort of look like in practice and how do you plan to overcome it? Yeah, so if you look at the, I guess, the issuing industry, it's still 90 % dominated by traditional banks. And most of those traditional banks sit on what we call legacy infrastructure. You know, that's infrastructure that's been around for 30 or 40 years.

5:29It's often in like Cobalt language, whereas, you know, you're struggling to find engineers that can still support that. And it's, you know, what does it mean if it's legacy? It means that it's really slow in terms of getting new products or iterated products to market. It means that if you want to operate in multiple markets and scale globally, that becomes a real challenge. It often means finding different providers, different integrations, different operating models. it means your ability to i guess to innovate and create these i guess new experiences around some of the new technologies that we're seeing is just limited and all of that really is driven by the legacy infrastructure so we built a modern cloud native infrastructure it's a single platform single code base single integration so if you want to operate in one market or 50 markets it's really pretty simple through that same integration.

6:24And we really focus on, it's almost like a SaaS model, I guess. We focus on having a very standard product that all of our customers use and then they can configure, it's highly configurable, highly flexible, so they can build a unique customer-facing proposition on top of that. And I guess the big focus for us is to maintain that standardization so that we don't become legacy ourselves. up.

6:48Laura Watkins:Yeah, that's not something you want to risk after putting that statement out there. But tell me about some of these figures. So 117 % year on year in new sales and transaction volumes above 65%. What's kind of the main thing that's growing that? Is it the sort of embedded play? What do you think is driving the demand? I think there's a combination of things. I think, firstly, we're really pleased with the growth. And I think that growth is continuing. So I think We had great growth last year. We're seeing actual much accelerated growth as we go through into 2026. I think there's the macro structural elements that we see.

7:27I think digital banking is really an inflection point now. We're seeing some significant market share being taken by, whether it's Nubank or Revolut or Monzo, Chime in the US, et cetera. And I think that is being driven primarily by the digital customer experiences, which are just better than you get with traditional banks. I think there's that trend there. I think fintechs are starting to reach scale as well. And they're, I guess, becoming more and more embedded into particular use cases. We're seeing really strong growth around stablecoin-backed cards. So we're in emerging markets where people are looking for a hedge against currency volatility.

8:05We're seeing massive growth. Then more internally, I think as a business, I said I took the role two years ago. I hired a new chief revenue officer. So I think she's probably the best in the business and she's just really built a very scalable, repeatable sales engine. And so we qualify hard, we qualify fast. We try and focus all our efforts on real opportunities. I think the combination of the macro and then the internal processes is really driving, I guess, the great results that we're seeing at the moment.

8:38Laura Watkins:Fantastic. Thank you. And Phyllis, I want to bring you in here into the conversation around sort of, As Jeff was talking, a lot of consumer-facing brands and neobanks have sort of driven the conversation in fintech. But do we think actually the biggest shift is maybe behind the scenes, sort of on the infrastructure plays behind it? Is that where the kind of industry is maturing towards? I was thinking about this and it occurred to me that we've had a sustained period of global shocks for quite a while now and slow growth in the economy in the UK at least. a cost of living crisis for many, which has fueled those sorts of features like different pots and perhaps different rewards cards and easy access savings accounts and those sorts of things that focus on ways for consumers to manage and be more agile with their money.

9:32But then if that cost of living crisis continues, those global shocks continue to come, we have political instability yet again in the UK, that just then gets absorbed into the everyday and it's no longer a crisis. It's just the everyday ongoing state of things. And then consumer brands need to then look at, well, how else can they improve? How else can they serve their customers? How else can they make growth happen and perhaps cut their bottom line in costs? how can they then deliver those consumer bells and whistles while still being efficient themselves and agile? And as Jeff was saying, often that isn't the case with legacy platforms and it's then the infrastructure plays come in and there has to be this modular kind of development with agility behind the scenes, fueling the bells and whistles at the front.

10:29So you make a really good point now. I think if we look at what consumers want there and those digital experiences and you talk about loyalty and rewards as an example there, you really need to be able to do that via the mobile phone. And I think a lot of the last few years we've seen development in mobile apps and the UX, but actually if it's on a legacy platform, there's only so much you can do because actually the underlying configuration actually comes through from the platform. So simple things like setting spend limits or allowing you to move, change your PIN on your mobile phone or maybe allocate a virtual card to your son or your daughter.

11:09All of that, while the pretty UX comes through the mobile phone, all the actual ability to do that is through the infrastructure. And if you're on a legacy platform, it can take months and months and months to do that type of development. Whereas on a modern platform, it's pretty instant. It's just a configuration change. And then, yes, infrastructure becomes then an enabler with a consumer end benefit. Yeah. And then the geopolitical bit is also really important. And while we see it a little bit here in the UK, obviously we cover businesses in 68 countries around the world. And we've got a number of clients in the Middle East, for example.

11:42You've seen a rise over the last few years of, I guess, an increased desire for sovereignty and to bring control within countries. And so regulators are asking for data to be processed onshore or transactions to be stored. You're seeing governments introduce local domestic payment schemes. We're seeing Europe having that conversation at the moment. And I think, again, a modern processor is able to integrate. We're integrated into about 10 of those local domestic schemes around the world. It's very difficult, I think, for a legacy player to start to be agile and to change with the regulation like that as well.

12:18Laura Watkins:And Monica, can we bring you in here? Obviously, Jeff was just talking about the sort of 68 countries of operation. Obviously, that can be fragmented market by market. What's your kind of take on this and sort of some of the complexity at doing a scale across different regions? Yeah, so I think just on the back of both comments, first, you know, I think we've definitely undertaken a digital revolution, which has, you know, created kind of an intersection where we have all of this technology that's driving change, increasing demand. And, you know, it is exciting with all the neobanks and digital banks.

13:01I totally agree. You have to have really the right infrastructure to be able to provide an answer to this demand. And today, you know, whether it's Revolut or Monzo or, you know, Wise, it doesn't really matter. Chime stateside, of course. But today, it's not just about what currency you want to use, but it's really, you know, having a one-stop shop for your disputes as well. And, you know, we operate on a global basis and we're finding very similar. There's not really a single use case where today's consumer is strictly doing business in their one country for their one currency with their one bank.

13:42What they're looking for is something that is modular and it can grow with changing times. And, you know, in the back of COVID, I think this has really kind of reshaped the industry in turn, in step turn with AI and some of the functionalities. But if you look at disputes, this is where I think you have kind of an argument to consider on both sides. So, you know, we want things to be digital and frictionless in order to create consumer adoption. I'd say, you know, this is the age of consumer choice. But when it comes to disputes, firstly, yes, we have a lot of fragmentation to deal with. There's different payment methods.

14:22There's different regulatory considerations. Of course, in some cases, like in India, Singapore, you really have to look at privacy constraints and different policies. But, you know, giving an experience that's digital to the consumer is first and foremost in a lot of, you know, adoption trends. But making sure that it's not so frictionless that you end up inadvertently creating an onslaught of, you know, frivolous disputes, convenience disputes. I think that that is where you need that balance. So for us, super exciting and changing times. And, you know, I think similar to both of you, we're also exploring opportunities in stablecoin, pay by bank, like how can we create that that bolt on, you know, infrastructure that helps support really the challenges.

15:17You have this legacy world that we need to fit around existing fragmented processes and really get people to a level of standard with expectations that aren't short-sighted of some of the potential fallout, if that makes sense.

15:34Laura Watkins:Absolutely. And Jeff, we're kind of coming up on time on this story, but I just want to give you the final word. Obviously, we spoke at the top a little bit about mentioning some of those areas, stablecoins, tokenization, AI-driven services. for paymentology's future. Can you just give us a little sneak peek of what that might look like? Yeah, I think we're going to continue on our track of expanding internationally. The US is going to be a new market for us so we're going to continue to invest in product development. I think there's a real opportunity to turn issue of processing from almost a transaction-based infrastructure to actually a more intelligent layer.

16:13And I think with AI, it gives us a chance to accelerate that. We have a really great foundation to build on. We have huge amounts of data from clients in 68 countries. So when we think about going up the stack, fraud is an obvious area for us in terms of predictive behavioral analytics. We're starting to automate all the disputes and chargeback space. As Monica said, I think it's very fragmented. I think there's a huge opportunity in that space. Credit is a really interesting space for us, both getting data to help clients make credit decisioning. but we've just launched a brand new cloud-based credit platform that allows clients to take the credit decision actually post-transactions.

16:51That moves it from the acquiring side to the issuing side, and they can switch between revolving credit or installment credit. And then with any business which is looking to grow, I think talent is a key part. We can't do any of this without people. I know people would like to believe we don't need people with AI anymore, but I think there's still some people that we need. So we'll look to selectively hire some great people to increase, I guess, the taildown density within the organization. But yeah, very excited and very looking forward to what the next few years brings for us.

17:24Laura Watkins:Fantastic. Well, congratulations again. And, you know, we will be watching from the sidelines to see where this goes next. And hopefully you can come and tell us more about it as all of these things fall into place. But I'm going to move us on to our next story, which is that Alipay is letting shoppers delegate purchases to AI. The story in Fonextra, Chinese payments giant Alipay has begun allowing users to authorize AI agents to make payments on their behalf. Originally launched last year, Alipay AIPay enables transactions through AI agents using voice commands and one-time payment authorization.

17:58Laura Watkins:The feature has seen rapid adoption in China, surpassing 100 million users in February of this year, and reportedly processing more than 120 million transactions in a single week. The capability is now integrated into Alibaba's Taobao's shopping platform and users can tell an AI assistant what they want to buy, set preferences around price or timing, and allow the AI to monitor listings and complete the purchase automatically once conditions are met. Alipay says the technology will expand beyond shopping into recurring payment scenarios, including commuting, utilities, and repeat purchases. So Monica, coming to you first on this, what was your take on this story?

18:38Laura Watkins:Like, is this a big moment for payments and commerce? You know, where do we sort of stand on trust and consumer protection with things like delegating to AI? What's your stance on this one? So I think, I mean, first of all, yes, I think it's exciting. Anything that's creating automation, of course, you know, it's quite opportunistic to think, you know what, actually, why don't I use? I mean, in the States, we've had all these different stories with, you know, Amazon Alexa is now making my purchases for me. But isn't it even smarter if Alibaba, you can deploy this agent and we've all read about agentic, you know, AI.

19:19But I do think that this is to the point of, you know, we need to have we don't have the standards in place yet to deal with, you know, what is a valid dispute and what's not a valid dispute. because in every situation, you're going to have still questionable transactions, whether a product isn't delivered, it wasn't unintentionally ordered. We had this huge conundrum, and it continues to grow with parental consent. And just to give you an idea, when it comes to chargebacks and disputes and these fraud statistics, if you have your mobile and you give it to your son or daughter and they download, let's say, Candy Crush.

19:59Then oftentimes, you know, the consumer goes to their bank. They go to Barclays. They say, you know what? Actually, no idea where all these transactions came from. Clearly, it wasn't authorized. But actually, it was because you provide, you have, you're the parent. So you needed to provide parental consent. And you did by default of providing your app. And your card was located on there. So that has been a challenging problem that has continued to grow through the years. Now we have something that is like, you know, supercharged and even more intelligent. It's not your five-year-old that is clicking buttons on your phone.

20:39Instead, it's something that you have actually programmed to do this work. But I still think it's human nature. We're still going to have the fallout of, you know, my AI made a mistake. They bought something that I didn't want. What happened with this? And really, we don't have rules in place to address this. And, you know, wherever there's a problem, of course, there's an opportunity with the automation. But yeah, I think good and bad. I like it.

21:09Laura Watkins:Good summary. Jeff, what was your take on this? Is this a natural evolution of embedded payments or is this actually sort of fundamentally different from a kind of consumer behavior perspective? What was your take? Look, I wasn't surprised to see China leading the way there. I used to work for Ant and live in Hong Kong and used to travel to China quite a lot. And so I know the ambition that they have when it comes to technology. I think it's slightly different in China. I think Alipay is so embedded in the daily life of China. It's literally people run their lives on Alipay. So I think their access to data and the size of their customer base, I think makes it right for agentic AI.

21:48So I think from that side, it makes sense. Is it a natural evolution? I think, look, it makes sense now it's happened, that it looks like a natural evolution. Would we have sat here a year or two ago and thought that? Maybe not. But I think it's important to know that it is fundamentally different from what's happened before. I think as Monica touched on here, I think we're, under Agentic AI, we're, I guess, delegating the decision-making to the agent, whereas up until now, it's always just been the execution of that. And I think that brings a whole raft of different risk profiles and responsibilities and things around disputes and chargebacks, as Monica said.

22:30So I think it is fundamentally different and there's lots of additional complexity and challenges. I think China is probably a good place for it to start, but I don't think it's as easily rolled out in the West where we use apps and have different data spread across different sources. So I think it's not going to be a thing that comes tomorrow. I wonder if we'll have a scenario where, you know, you have an additional user on your account, which is your virtual AI identity. And they're authorized for certain things. But yeah, I mean, if you consider how many transactions are going through Amazon, I'm not sure that we're too far away.

23:11It is definitely an interesting proposition. I think you're right, Monica. I think that's what will happen. And then it'll be businesses like ourselves that can help do that from an infrastructure side. So I think there'll be certain, I guess, rules and limits it can operate in if it's in this category, obviously, and for these amounts. So, yeah, I think that's where it will head back.

23:32Laura Watkins:Interesting. Yeah, it sounds like you guys have already got the business model mapped out. Well done. So between the two of you. Flez, bringing you into a kind of related to Jeff's points around the sort of east to west movement of these kind of things, Obviously, China very invested in the super app ecosystem, perhaps more so than the West. What's your take on this? Do you think we'll see more of this kind of moving east to west? Or is either the data or the consumer behavior not there yet? I think we will see movement, but I think it will be slower and more cautious than China. I think you'll get the early adopters curious about this and playing around and having a go, taking a bit more risk.

24:16I think it'll be the tech curious and informed. But don't forget the UK backdrop to all of this is we still have, for example, regulations on access to cash and so on. So there's perhaps a larger swathe of society and ability to trust to bring along to this. And I think trust comes down as the key to it all. Just another angle slightly differently. But if you think about there's quite a vocal objection to a digital pound and a digital ID, it's that rebellion against things going on that are hidden behind the scenes that you can't actually see the workings of. So I think there'll be some trust to overcome and some perhaps demonstration of those tech curious and informed early adopters to show that it's not all robots and futuristic and disaster.