What happens when payment innovation outpaces infrastructure?

In the race to deliver faster, smoother, and more secure payment experiences, our industry often treats acceleration as an unquestioned virtue. Real-time rails, open banking, embedded finance, and digital wallets define the modern payment landscape. Yet for many established payment providers, each new-fangled tech becomes another weight piling onto an already creaking infrastructure.

This is the technology acceleration trap – where the pressure to keep pace with innovation can inadvertently make modernisation harder, not easier.

The trap is subtle but real. On the surface, adding a new product or compliance measure seems like progress. But every additional integration, security upgrade, or regulatory patch compounds the complexity of systems designed for a different era. For some legacy providers, acceleration can be a liability.

The trap, defined

Innovation rarely arrives in isolation for legacy payment providers. Each new feature, compliance requirement, or market adjustment – whether instant settlement, fraud prevention, or cross-border support – must be grafted onto outdated systems. The result is a tangled web of integrations, patches, and workarounds that slow down the very organisations meant to be speeding up.

The implications are clear:

• Multiple systems speaking different languages. Legacy core platforms weren’t built for today’s modular, API-led world. Each integration compounds fragility, increasing the likelihood of outages or delays.
• Compounding compliance overheads. Every regulation or expansion adds complexity to infrastructure ill-equipped to adapt quickly. Teams spend more time maintaining than innovating.
• Innovation turning into technical debt. What should be competitive advantage becomes a maintenance burden, diverting resources from value creation and customer experience.

In short, legacy institutions can spend more energy keeping systems running than delivering products that delight customers.

The cost of complexity

Payments have become a strategic differentiator. Customers expect real-time, borderless, smooth interactions. Falling behind even slightly in speed or experience risks irrelevance.

Yet legacy providers often divert technical teams away from innovation to maintain systems. Investors and customers feel the drag. Execution slows so dramatically that fintech’s four- to six-week product cycles dwarf the six- to twelve-month timelines of banks. According to McKinsey, large banks are 40% less productive than digital natives, and 70% of digital banking transformations exceed their original budgets – with 7% costing more than double the initial projection.

The consequences extend beyond operations to strategy itself. When resilience gives way to sluggishness, agility becomes the ultimate buffer against obsolescence. Legacy providers risk not only missed opportunities but also lost market share, as more nimble challengers capture customer mindshare.

When scale becomes a liability

Here’s the harsh truth: scale without agility is a liability. Modernisation efforts often stall under layers of complexity. More than half of banks (55%) cite legacy systems as the top barrier to transformation. Global spending on outdated payment systems is projected to rise from $36.7 billion in 2022 to $57.1 billion by 2028, growing at nearly 8% annually. 

The costs of inaction are just as high. Institutions that delay upgrades risk missing out on up to 42% of potential payments-related revenue and 21% in cost savings. Meanwhile, legacy infrastructures often deliver updates 40% slower than modern modular systems, making rapid adaptation nearly impossible.

In the UK, recent consequences have been painfully tangible, with multiple banks reporting a multitude of system failures (one outage has been reported to have lasted three days and cost the bank £7.5m in compensation). These are not isolated incidents; they are systemic symptoms of architectural fragility.

Escaping the trap

Breaking free from the tech acceleration trap demands technology built for adaptability. Modern platforms like Tribe’s exemplify a modular, API-first architecture designed to avoid the complexity spiral:

• Composable by design. Services – whether card issuing, acquiring or risk management – can be plugged in or replaced individually, without halting the rest of the system.
• Compliance built in. Modern technology anticipates regulatory change, reducing the need for costly retrofitting.
• Scalable innovation. Providers can deploy new capabilities quickly, without accruing technical debt that slows the organisation down.

Imagine a bank needing instant cross-border settlement. On a legacy stack, the project might take many months, requiring multiple integrations, vendor contracts, and compliance checks. On a modular platform, the same functionality can be added in weeks, with minimal disruption. The difference lies in the ability to respond to market demand rather than perpetually chasing it.

Addressing an inconvenient truth

Many legacy players are already too deep in the trap to compete effectively. Their challenge is not whether to innovate but whether their infrastructure will allow them to survive long enough to do so.

Breaking free requires shedding monolith systems, embracing modularity, and partnering with providers built to move at fintech speed. For those who make the shift, the benefits are tangible: faster time to market, reduced operational risk and the ability to deliver customer experiences on par with digital-native challengers.

Acceleration is unavoidable. But for legacy payment providers, it can become the very trap that leaves them behind. The future belongs to those who can innovate without being weighed down by the past.