AI Shifts Payments Innovation From Features to Foundations

Watch more: What’s Next in Payments With Spreedly’s Judd Howard

Artificial intelligence is compressing the distance between differentiation and commoditization across the payments industry. Features that once signaled innovation, like forecasting, personalization and data synthesis, are becoming baseline expectations.

For Judd Howard, senior product manager, AI at Spreedly, the shift is transforming not only payments technology, but also how businesses evaluate it.

“It’s a hope-based landscape. People are coming with the idea of setting themselves up for the future and continuing to grow,” he told PYMNTS for the June 2026 edition of the “What’s Next in Payments” series, “Aspirin or Vitamin? How AI Is Rewriting How Clients Buy.”

That optimism is emerging during a period of accelerated technological flattening, where infrastructure, relationships and contextual data are becoming more valuable than ever.

AI Can Replicate Software Faster Than It Can Replicate Trust

AI-powered development tools and large language models are making sophisticated payment capabilities easier to build, easier to integrate and easier to evaluate.

Howard framed the evolution through the conversation’s central metaphor: distinguishing between “aspirin” products that solve urgent pain points and “vitamins” that optimize future performance.

At the infrastructure layer, many payments functions have firmly moved into the aspirin category. Secure payment capture, transaction routing and reconciliation are now viewed as nonnegotiable operational requirements rather than differentiators.

“If you break down the life cycle of a payment, you have tokenization, processing and reconciliation,” Howard said. “Those three things have become — if they weren’t already aspirin — they’re now more in the aspirin realm.”

Meanwhile, workflow orchestration, analytics platforms and advanced data services remain strategic enhancers.

“Data platforms, workflows, those are vitamins,” Howard said. “Those are things that are going to help you optimize your strategy going forward.”

Buyers are no longer approaching payments modernization solely as a response to immediate operational pain points. Increasingly, they are thinking strategically about how AI will shape commerce over the next several years.

AI Is Building on Existing Rails, Not Replacing Them

While development cycles are collapsing, payments remain fundamentally dependent on trust, compliance, network relationships and operational resilience.

“If you’ve already done a lot of that hard work building up a very strong payment strategy that felt resilient in the pre-AI world, you might even be more prepared for this new era than you think,” Howard said.

Rather than forcing a wholesale reinvention of payments infrastructure, AI may instead amplify the value of systems already built for security, interoperability and scale.

“I think payments, uniquely, because it’s so infrastructural, has been set up with a lot of the fundamentals around compliance and security so that it can scale with AI,” Howard said.

For payments providers, that may be the defining reality of the AI era: the technology is changing fast, but the companies best positioned to benefit may be the ones that already built the foundations AI now depends on.

Watch the full interview with Spreedly’s Judd Howard to hear more about:

Why real-time payments make yesterday’s data less valuable. Howard explains how instant rails are changing the economics of issuer data and why banks need infrastructure that can act before the transaction moment passes.

How AI depends on modern processing infrastructure. Howard argues that banks will only get value from AI if their data is timely, accessible and connected to the systems that shape payment decisions.

Why stablecoins, tokenized deposits and smart credentials raise the stakes for issuers. The interview explores how new payment forms may coexist with existing rails while forcing banks to rethink how their credentials participate in commerce.