Paymentology CEO Says Payments Has a New Legacy Problem

Watch more: The Digital Shift With Paymentology’s Jeff Parker

Here’s a thought no one in payments likes to say out loud. A lot of the infrastructure that was supposed to replace the old stuff is becoming the old stuff.

Banks built digital front ends. FinTechs built slick apps. But underneath, the issuer-processing layer, the part that actually decides what happens when someone taps a phone or swipes a card, hasn’t kept pace. And both sides of the industry are starting to feel it.

That tension was at the heart of a conversation between Paymentology CEO Jeff Parker and PYMNTS CEO Karen Webster, following the company’s May 12 announcement that it had raised $175 million from investors, including Apis Partners and Aspirity Partners.

But the conversation wasn’t really about the money. It was about why that money matters now.

The Next-Gen Problem

Webster pointed out that many firms once considered cutting-edge disruptors are themselves aging into legacy status. The infrastructure cycles are compressing. The gap between “new” and “old” has never been narrower.

Parker described the traditional issuer-processing market as one still dominated by platforms that were built decades ago.

“It’s monolithic,” he said. “It’s quite inflexible in terms of what it can provide.”

What new banks want now is new tech, not more customization, he said. They want flexibility delivered through standardized infrastructure. That’s 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 a custom build every time.

Paymentology’s answer is to refuse the bespoke path. Rather than building one-off integrations that pile up as technical debt, Parker said Paymentology bakes features into the core platform so every client benefits.

“If a client wants something done, we build it for everyone,” he said. “We try and adapt for it through configuration rather than building code.”

The proof is in the numbers, he said. Paymentology supports clients across nearly 70 countries and saw transaction volumes jump 65% in fiscal year 2025.

Why Nobody Switches (Until They Do)

Issuer processing is a sticky business by nature. Switching costs are high, contracts are multiyear, and when the system works, nobody wants to touch it.

“It’s a very strong sticky recurring revenue type business,” Parker said.

But institutions do move, and when they do, it’s usually for one of two reasons.

The first is geography. Financial institutions expanding across borders don’t want to stitch together different processors in every new market. They want one provider, one integration, one operating model.

The second is a slower-burning realization about their own tech 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, the underlying flexibility and innovation is really driven by the infrastructure that sits behind it.”

In other words, you can only polish the front end so much before the back end becomes the bottleneck. That gap, between what customers see and what the infrastructure can actually do, is where Paymentology sees its biggest opening.

“There is no single category leader or winner in terms of a global next-generation issuer processor,” Parker said.

Digital banks, which he called Paymentology’s “hero segment,” are especially hungry for processors that can support rapid expansion while still handling local requirements like domestic switch integrations and data-hosting mandates.

The Simplicity Paradox

The conversation then shifted to the widening gap between what consumers want and what they’re being asked to navigate. They’re the customers of the banks that Parker is giving new digital tools to serve.

Webster asked about flex credentials, the card products that let a consumer toggle between debit, prepaid, credit, or buy now, pay later through a single credential. It’s an idea that sounds elegant but requires serious infrastructure underneath.

Parker said demand is early but growing, driven by a fundamental tension.

“Customers increasingly want things to be simple,” he said. “But the options available to those customers is increasingly complex.”

That complexity isn’t limited to cards. Parker said Paymentology plans to broaden its support for alternative payment methods over the next couple of years, including stablecoin-linked activity and account-to-account capabilities.

“We definitely see value in other payment methods,” he said. “Some of the product enhancements we do will be looking to add other payment methods to our proposition.”

The company already works with stablecoin card programs and sees opportunity both at the cardholder level and in settlement infrastructure. Webster said cross-border payments conversations increasingly weave together stablecoins, real-time payments and account-to-account transfers alongside traditional card rails, forcing processors to support a wider mix without adding friction.

Growth Now, IPO Later

Parker joined Paymentology two years ago and said he spent much 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 want to take the business forward for the next three to five years, we felt that now is a great time to bring on additional shareholders,” he said.

When Webster asked directly whether the funding changes the timeline for a potential initial public offering, Parker didn’t shut the door but said the priority is execution, not exits.

“We still believe that while our growth is good and we’re happy with that, I think we’re still very early in the journey,” he said.

The $175 million will go toward expansion, product development and hiring. But for Parker, the raise is less about the balance sheet and more about sending a signal.

“Raising this sort of money helps put our name on the map,” he said. “But really for us it’s very much around highlighting our ambition for growth, our ambition around innovation, and wanting to continue to accelerate our path in terms of product development.”

Paymentology isn’t just trying to win the next deal, although that’s a part of the plan. It’s trying to build the platform that makes the next generation of payments infrastructure actually last.