Moving Money Forward: The Power of Payment Hubs

As digital expectations rise, banks are under pressure to provide seamless, instant and flexible payment experiences. Customers—whether individuals or businesses—expect to send money anywhere, anytime, with minimal friction and at maximum speed. However, behind the scenes, banks frequently struggle with a complex web of payment rails, including real-time networks, automated clearing house (ACH), wire transfers and debit.

This is where payment hubs come into play. Instead of juggling a multitude of siloed systems for each payment type, banks can rely on a single, unified payment hub as their command center. A modern hub that intelligently routes payments across these channels is becoming essential for banks aiming to deliver the best customer experience. Such a system not only puts banks on equal footing with the nimblest of FinTechs but also unlocks significant back-end efficiencies that boost the bottom line.

Consumers and Businesses Crave Modernized Payment Journeys

Payment Hubs Unlock Improved Customer Experiences

Payment Hubs Benefit Banks

The Power of Payment Hubs in Multi-Rail Optimization

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Consumers and Businesses Crave Modernized Payment Journeys

For today’s banking customers, speedy, secure and frictionless payment experiences are not merely nice-to-haves. They have become the basis for choosing where to bank.

Frictionless payment experiences are now table stakes for all FIs.

Today’s customers expect more than just basic banking—they want seamless payments, instant confirmations and transparency regarding timing and fees. Legacy systems, often siloed by payment type, create delays, errors and inconsistent experiences.

A recent survey found that 57% of organizations encounter friction in payment processing at least once a week, highlighting the urgency of modernization. This fragmentation is especially problematic as FinTechs and digital-native banks raise expectations for fast, intuitive payment journeys, putting traditional financial institutions (FIs) at risk if they don’t keep up.

57%

of organizations experience friction in payment processing at least once a week.

Traditional banks are losing ground to digital-first competitors when it comes to payment journeys.

FinTechs and digital-native banks have set new standards for payment journeys, offering intuitive interfaces, real-time notifications and transparent fee structures. Traditional banks, constrained by legacy infrastructure, often struggle to match this level of service, leading to customer dissatisfaction and potential attrition. The proliferation of payment types—from instant rails like the FedNow® Service and the RTP® network to ACH and wires—only compounds the challenge, as each rail may require different systems and processes.

When customers fail to secure seamless payment experiences from their traditional banks, they turn to nontraditional financial service providers. According to Marqeta’s 2024 State of Payments Report, 42% of consumers have considered getting their financial services from tech companies and digital newcomers such as social media platforms and retailers. Among 18- to 34-year-olds, that number rockets to 63%, and it’s only climbing as these digital-native generations gain spending power.
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Payment Hubs Unlock Improved Customer Experiences

Payment hubs are unified platforms that consolidate all payment processing, allowing customers to benefit from a fast, consistent and straightforward payment experience regardless of rail.

Payment hubs optimize customer experiences across all types of transactions.

60%

of banks have implemented payment hubs or are in the process of doing so.

Payment hubs act as centralized platforms that connect seamlessly with a bank’s core systems, consolidating and streamlining all payment processing regardless of the underlying rail. Whether a customer is sending money locally or internationally, the hub intelligently assesses available payment rails and selects the most efficient route. This means customers benefit from faster transactions, instant confirmations and transparency around timing and fees, no matter the payment method chosen. The result is a straightforward, reliable experience each time—a critical differentiator in today’s digital-first environment.

In addition to smart routing, payment hubs handle such key functionalities as payment initiation, processing, reconciliation and settlement. Moreover, leading hubs do more than move money, leveraging features like fraud detection, compliance tools—including know your customer (KYC) and anti-money laundering (AML) checks—and advanced analytics. By minimizing manual intervention and automating critical checks, payment hubs enable a safer and more seamless customer experience. Smart routing can also offer cost savings to both payers and payees. For example, urgent payroll transfers might be routed via real-time rails, while routine vendor payments could use ACH for lower costs.

A new payment hub from FIS exemplifies hubs’ customer benefits.

As an example, FIS’ Money Movement Hub is designed specifically to help FIs address and ease payment friction. The tool offers a universal application programming interface (API) that allows FIs to connect with major payment networks, including instant rails, wires and ACH. Access to these diverse networks via a single API helps to streamline complex payment flows into a uniformly smooth journey for customers.

The hub also has built-in fraud controls, including real-time transaction monitoring, ensuring that payments are both secure and compliant. For customers, this translates into peace of mind: Their payments are not only fast and convenient but also protected by advanced security measures. Still, customer benefits are not the only factor that has convinced nearly 60% of banks to adopt or plan to roll out payment hubs. The benefits for banks themselves are equally compelling.
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Payment Hubs Benefit Banks

Payment hubs optimize not just customer experience but also operational efficiency, providing as many benefits to banks as to their customers.

$98.5M

Annual business losses due to disruptions in money movement that payment hubs could potentially prevent

Payment hubs can help banks unlock higher levels of efficiency.

In addition to customer experience, payment hubs can also optimize operational efficiency for FIs. Automation reduces manual intervention and errors, while system consolidation lowers maintenance costs and technical debt. Automated workflows also translate into smaller workloads for banks’ IT and digital payment teams. With a robust payment hub, FIs can finally break down silos, streamlining payments across every channel and format.

Moreover, because they are powered by modular platforms that integrate easily through APIs, modern payment hubs can help banks pivot quickly to adapt to market changes and expand far beyond traditional banking. The “pay-as-you-grow” model offered by FIS enables banks to scale their payment capabilities efficiently, activating new payment schemes as needed without significant upfront investment. By tapping into cloud tech and open APIs, banks can cut costs, scale up with ease and launch new services, like request-to-pay and cross-border payments, faster than ever. These efficiencies can put banks ahead of the curve, freeing up resources so they can focus on innovation and customer service rather than managing complex, disparate systems.

Payment hubs’ enhanced security and compliance could help banks solve a nearly $100M problem annually.

According to new research, businesses lose an average of $98.5 million every year due to disruptions and inefficiencies across money movement. Surveyed executives did not mince words about what’s draining their coffers: 88% pointed to cyberthreats as their top financial nemesis, while 79% blamed fraud and 65% cited the complex regulatory labyrinth they must navigate. Other costs run even deeper: Payment gridlock, cash flow bottlenecks, technology talent droughts and reputational damage create a financial quicksand that’s dragging companies down.

Implementing payment hubs could significantly reduce the impact of all these problems. By unifying fragmented payment workflows under one digital roof, these hubs deliver unrivaled visibility, compliance and fraud resistance. This results in smarter money movement that keeps businesses agile and protected in today’s high-stakes financial landscape.
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The Power of Payment Hubs in Multi-Rail Optimization

Today’s customers demand frictionless payments, instant confirmations and transparency—experiences that traditional banks struggle to provide with legacy systems. Banks face an urgent need to modernize their payment journeys to prevent customers from flocking to nontraditional financial service providers, including tech companies, challenger banks and even companies without a financial industry foothold, such as retailers and social media. Payment hubs allow banks to offer the straightforward, reliable and transparent payment experiences that customers now expect, helping them retain users and compete effectively with digital-first competitors.

Beyond improving the customer experience, payment hubs offer significant operational and financial benefits to banks. They enable increased efficiencies by consolidating payment processing and automating workflows, thereby enhancing transparency, improving compliance and reducing the workload on IT and digital payment teams. Modern payment hubs, built on modular platforms with open APIs, also position banks for the future, allowing them to integrate easily with FinTechs, adapt quickly to market changes, reduce operational costs and efficiently scale their services.

The Money Movement Hub is more than a platform—it’s a launchpad for transformation. By turning fragmented payment flows into a unified, intelligent ecosystem, we help our clients reduce friction, accelerate innovation and move money with purpose. It’s the infrastructure behind the next generation of money in motion.”

Elaine Duff
Senior Vice President, Head of Products and Services—Global Money Movement, FIS