In the race to modernize payments, incumbents were supposed to lose to faster, cloud-native challengers.
Instead, artificial intelligence is producing something far more unexpected: a reappraisal of the hidden value embedded inside legacy institutions. The reason isn’t nostalgia. It’s data, trust, scale and resilience.
Throughout a month’s worth of conversations with PYMNTS for the May edition of the “What’s Next in Payments” series, “When Legacy Becomes Leverage,” nine leading executives shared the four key pillars of exactly why the payments industry is abandoning the idea that “legacy” equals obsolete:
Across banking, payments and financial technology, executives are increasingly arguing that the infrastructure once viewed as technical debt may actually represent one of the industry’s most valuable strategic assets. After all, innovation is inseparable from history. And history is cyclical.
In today’s AI era, incumbents are discovering that their decades-old infrastructure may be their greatest competitive advantage, assuming they can modernize around it without breaking trust, scale or resiliency.
Legacy Infrastructure Has Become Strategic Infrastructure
The irony today is that many of the characteristics once criticized as signs of institutional inertia, like regulatory discipline, operational rigor and resilience, are now becoming differentiators in an operational and macro era where reliability matters as much as innovation.
“I would think about legacy infrastructure nearly always being an advantage,” Spreedly CEO Justin Benson told PYMNTS, noting that many incumbent providers got to where they are precisely because they solved some of the hardest problems in payments.
“Incumbents perhaps focus a little bit too much on the technology gap and less around the commercial relationship gap,” Benson added.
For Pat Antonacci, chief product officer at The Clearing House, the term “legacy” often obscures the role those systems continue to play in core banking operations and in supporting payments modernization.
“The challenge always becomes scale,” Antonacci told PYMNTS. “And scale is driven by that level of trust, that level of security.”
AI, rather than accelerating the demise of established systems, is revealing the value embedded within them. Value that looks like years of transaction history, regulatory expertise, customer relationships and operational knowledge.
“When people think of legacy, the first thing they think of is infrastructure,” Dean M. Leavitt, founder and CEO of Boost Payment Solutions, told PYMNTS. “I would argue that it actually relates to mindset.”
That perspective reframes modernization as a leadership challenge rather than a technology challenge.
“There’s much to be gleaned and leveraged from the legacy players. They make up the ‘pavement’ on which we all drive,” Guy DiMaggio, SVP of operations and strategy at Maverick Payments, told PYMNTS.
Orchestration Is Replacing Replacement
For years, technology transformation projects have often centered on “rip-and-replace” initiatives aimed at eliminating legacy systems entirely. Those projects frequently proved expensive, disruptive and difficult to execute. Today, a different philosophy is gaining momentum: orchestration.
“The future belongs to orchestration and not replacement,” Mladen Vladic, head of product, payment networks at FIS, told PYMNTS.
“It’s not about abandoning legacy systems, but modernizing around them intelligently,” Garrett Baird, vice president of product, banking and FinTech at Paymentus, told PYMNTS.
“The challenge now is that customer expectations have evolved,” Baird added. “Customers are beginning to expect more speed, more intelligence, more personalization, and have those experiences be totally connected.”
Rather than dismantling trusted infrastructure, institutions are building intelligence layers on top of it. APIs, orchestration platforms, payment hubs and AI-powered workflows allow organizations to modernize customer experiences without introducing unnecessary operational risk.
“The real opportunity and the rethinking around payments is around orchestration,” Velera Senior Vice President of Product Experience and Enablement Cody Banks told PYMNTS. “You can have a very pretty UI and UX, but if it lacks the connectivity into what the consumer is looking for, that’s where it falls apart.”
In today’s business landscape, successful modernization depends less on who owns every component and more on who can coordinate the most effective network of partners, technologies and capabilities. The result is a more modular vision of modernization, where innovation happens around the core rather than through wholesale replacement of it.
Mihail Duta, director, global solutions consultant, payments, Finastra, argued that the rise of modern payment hubs are proving to be one of AI’s most impactful applications areas.
“That’s the business model banks are looking for. What flexibility can your system offer me so I can in turn offer it to my customers?” Duta said.
AI Shifts Competitive Advantage to Data and Context
The payments industry’s most important modernization lesson may also be its most counterintuitive. The future is not being built by abandoning the past. Instead, it is being built by reinterpreting it.
“The value of AI is using AI on the data that you have,” TCH’s Antonacci explained. “The incumbents or the core … has years and years of history and experience.”
Boost’s Leavitt sees AI through a similar lens.
“We’re using AI as that tool against our proprietary data really as a weapon vis-à-vis competitors,” he said, explaining that the competitive battleground is shifting from infrastructure ownership alone toward contextual intelligence.
AI, rather than accelerating the demise of established systems, is unlocking their data as a context and growth lever.
“AI is [only] as good as the data available to feed these models,” Vladic said.
And in financial services, incumbents possess decades of transaction histories, fraud patterns, customer relationships and operational intelligence that newer entrants simply cannot replicate overnight.
“It’s more of a chisel versus a sledgehammer,” Velera’s Banks said. “How do we make sure that the member experience is at the forefront? How do we make sure the value we’re providing with AI, with data, with insights, is really driving engagement?”
“What customers value today is speed, simplicity, convenience, intelligence. Those are the new trust drivers,” said Leonardo Collado, senior vice president and general manager of Pismo, a Visa solution.
“The future moat may not be speed or user experience alone but accumulated relational context across ecosystems,” Baird said.
Modernization Is Now an Ecosystem and Leadership Challenge
The industry is therefore confronting a paradox. The same systems criticized for slowing innovation are also the systems responsible for maintaining stability, resiliency and institutional trust at a global scale.
“When you think about payments, you think about things like security. You think about things like scale availability. You think about things like data and insights,” said Spreedly’s Benson.
As a result, modernization has evolved from an engineering initiative into a leadership challenge.
“Payments modernization is becoming a permanent operating condition rather than a once-a-decade initiative,” said Finastra’s Duta.
Echoing that sentiment, Collado noted that, “Modernizing infrastructure has gone from a technical discussion that only the technical people had to a C-level discussion.”
The reason is straightforward: AI is collapsing the distinction between technology strategy and business strategy. Institutions can no longer think about infrastructure merely as operational plumbing. AI-driven personalization, fraud prevention, predictive underwriting and agentic commerce all depend on how effectively organizations unify data, orchestrate systems and coordinate partnerships across fragmented ecosystems.
That is forcing incumbents and challengers alike into deeper collaboration.
“I truly don’t believe that in today’s market that one can be successful solo,” Maverick’s DiMaggio told PYMNTS.
Historically, the industry competed on infrastructure ownership. Tomorrow’s leaders may instead compete on who best connects infrastructure, intelligence and ecosystems together.
