Why (and how) CFIs should adapt to the changing payments environment

The world of payments is moving fast. With faster underwriting, instant payouts, smarter fraud controls, and new expectations in credit card rewards, the race is accelerating. 

As AI moves from experimentation to execution, CFIs have to stay ahead just to keep up.
What are the trends we see coming and how will CFIs respond?

Credit availability

Prime and “near-prime prime” credit candidates get speed, but not looseness. The “time-to-yes” becomes more important than taking increased risk, so expect pre-approved and pre-qualified lending to be more prominent. Using cash-flow and employment signals, combined with credit bureau data, AI will enable lenders to cut the decision-making time from minutes to seconds.

Simultaneously, the share of new accounts using secured or graduated formats will continue to rise. By pairing a smaller initial line of credit with dynamic re-grading at regular intervals, say months 3, 6, and 12, line of credit increases are earned through on-time payments and income stability.

Bank-issued small-business cards will lean into receivables/AR data and connected accounting technology to underwrite higher lines for healthier firms. Smaller merchants get a break with starter limits paired with automated reviews.

The use of AI helps Collection and Recovery get smarter. Data-driven strategies (short-term payment plans, self-service re-aging rules) will be standard, as issuers balance regulatory scrutiny with lifetime value.

The shift in the credit card rewards landscape

While you once could easily give rewards for almost any spending, the cost pressures of the rewards points arms race will produce more stress for issuers. Travel-heavy portfolios will face higher unit costs resulting in subtle devaluations, tighter category caps, or higher annual fees to preserve economic viability.

On the other hand, merchant-funded offers will go mainstream. Expect card-linked, geo-smart, and SKU-level rewards funded by merchants to expand rapidly, with highly personalized offers optimized by AI. This creates a “surprise and delight” experience for consumers – “gee, this offer is made just for me!”

The mass market will continue to focus on simple cashback promotions, while the top of the market will be tempted by “experience” offers and premium extras, like unique entertainment and services – think access to airport lounges, free delivery, limited engagement concerts.

For business cards, look for more rewards that run the day-to-day business. For example, bill-pay rebates, AP automation perks, and supplier marketplace credits instead of generic points.

Navigating the tightrope of fraud and convenience

Fraudsters are getting better, faster, leveraging the growing sophistication of AI, while consumers are expecting – even demanding – faster, easier transactions. And our industry is stuck in the middle.

As more traffic moves to wallets and apps, the weak link will become identity, not personal account numbers. The use of passkeys and biometrics will expand to combat classic fraud techniques, using AI-fueled security as a weapon against AI-driven fraud. For trusted devices – your phone, your own computer – friction will be low, anything outside of that will require a higher burden of proof.

Balancing ease with controls in Instant payments

Account-to-account (A2A) payments have moved from a low-cost alternative to cards to become a core strategic capability for banks. It’s reshaping how money moves, how value is captured, and the nature of customer relationships.

Whether it’s Zelle, RTP, or FedNow, consumers don’t care what payment platform you’re operating on, they just want it to be quick, easy, and safe. You can expect to see more A2A options at retail checkout, in recurring bills, government agencies, and really large merchants. Fee savings and instant settlements will drive this demand.

But the tenets of payments remain the same: caps on spending amounts, recipient verification, refunds for scams are the rule.

The latest fashion in Wallets

Digital wallets are rapidly becoming an everyday thing for consumer spending and digital identity, reshaping the economics, competitive dynamics, and customer relationships in banking. As network tokens become the norm, and card-on-file and in-app transactions default to network tokenization with lifecycle management (auto-update on reissue), the result is fewer declines and less fraud.

You’ll see Tap to Pay on phone expand in acceptance, as micro-merchants and field services go phone-only for acceptance, thereby improving card share of small-ticket and service categories. Issuers can win by owning controls and context (alerts, limits, receipts) more than plastic.

Paperwork and underwriting drift further apart

With open data rules becoming widespread, and underwriting happening in real time, there will be less paperwork. Look at it this way – permissioned account and payments data become standard inputs for underwriting, which helps thin-file and SMBs get approval. Scorecards that blend reporting bureau data with employment signals will produce fewer declines and tighter lines.

No more tech for the sake of tech

Here’s a bonus for CFIs: you’ll only need to invest in tech stack upgrades that actually move the needle. Put AI to work where it pays, starting with fraud scoring, collections outreach, and service automation. Keep human-in-the-loop and model governance tight to streamline the system.

Stay lean and look for best-of-breed processors, dispute engines, loyalty marketplaces, and identity vendors with clean APIs, SLAs, and transparent pricing. Incremental switchover works better than long, monolithic conversions.

Regulations change but don’t go away

Trying to anticipate all of the regulatory changes for the year ahead is a fool’s game, but here we go: expect that late fee scrutiny will continue, it’s smart to design your revenue model with or without certain fees. Routing and interchange pressure will probably evolve, so scenario-plan the credit economics to accommodate routing rule changes.

Expectations of fairness will rise as AI enters the picture (and consumers are aware of it). Make sure you document all features, outcomes, and overrides. Ensure that the decisions made by AI models are understandable to humans, including your employees, your customers, and especially regulators.

What’s the bottom line?

If 2024–25 was about stabilizing credit and finishing core rebuilds, 2026 is about speed. The pace of change is getting faster and faster. Faster underwriting, instant payouts, real-time fraud controls. The goal is to make payments feel instant and effortless (while managing risk and costs.)

So, what’s should your CFI do to not just survive the race, but thrive in a complex, always-evolving environment?

We’re glad you asked that:

  • Speed to yes: Add permissioned cash-flow underwriting to lift approvals and right-size lines.
  • Rewards that pay for themselves: Launch (or partner for) merchant-funded offers tied to SKU and location.
  • Zero-trust identity: Passkeys + device binding + behavioral to stop ATO without killing conversion.
  • Instant rails with guardrails: Offer RTP/FedNow/Zelle through one UX with limits, name-check, and alerts.
  • Token everywhere: Close gaps in network tokenization; reduce CNP fraud and false declines
  • Automate the pain: AI-assist fraud, disputes, collections—measure results monthly.