June 2025 Summaries

Vertical SaaS platforms increasingly act as payment facilitators, connecting their customers to banking and payment networks so businesses can accept payments, pay suppliers, and manage transactions without building their own financial infrastructure. Unlike traditional payment service providers, payment facilitators commonly let multiple merchants operate through a shared merchant account, charging fees in exchange for simplified access to payment capabilities. Operating such a program requires strong customer onboarding and KYC checks, transaction monitoring, treasury and payout management, and chargeback controls because the facilitator is responsible for activity across the shared account. Examples include Shopify and software providers for gyms, restaurants, and marketplaces that embed payment services alongside their core products. Payment facilitators can use programmable payment vaults to tokenize and protect card data, reduce PCI-DSS compliance burdens, support routing across payment providers, and improve fraud and chargeback analysis, potentially creating a meaningful additional revenue stream for SaaS businesses.

PINless debit allows merchants to process debit transactions without a customer-entered PIN, particularly in card-not-present and e-commerce settings, and route eligible payments through lower-cost regional networks such as STAR, NYCE, Pulse, Shazam, and Accel rather than only Visa or Mastercard signature rails. A July 2023 clarification strengthened merchants’ routing flexibility by preventing issuers and networks from blocking the use of specific debit networks, with more than 65% of debit cards now estimated to be eligible for lower-cost routing. Merchants with substantial debit volumes may save up to 100 basis points through reduced interchange and network fees while potentially improving approval rates by cascading declined transactions across available networks without changing the customer experience. Effective implementation depends on factors including debit volume, merchant category code, projected savings, processor support, BIN data accuracy, routing capabilities, and internal operational effort. Because PINless debit may not include standard tokenization, merchants must also address PCI-DSS obligations, potentially using a payment vault to tokenize and securely store card data while enabling cost-optimized routing.

Remittance-as-a-Service (RaaS) applies modern payment automation to international money transfers between individuals and businesses, creating an opportunity for retailers and online merchants with established multi-processor payment capabilities. Remittances are economically significant in many countries with large diaspora populations, while business remittances support cross-border commercial payments that require efficient delivery, currency conversion, and low fees. Unlike traditional banks and legacy providers, RaaS platforms use apps, digital payment methods, identity verification, authorization checks, currency conversion, and local payout networks to move funds across different financial systems. Providers can earn revenue through transaction fees and currency conversion margins while potentially offering competitive exchange rates through scale and treasury management. Building such a service requires securely storing payer and recipient account information and integrating with multiple payment service providers, often using programmable token vaults and decisioning engines to orchestrate transactions across otherwise incompatible payment rails.

Credit card networks such as Visa, Mastercard, American Express, and Discover connect card issuers, merchants, and banks through standardized authorization, clearing, and settlement processes, with Visa and Mastercard operating open networks and American Express, Discover, and some store cards generally using closed models. Merchant costs include interchange and assessment fees, which vary by network, card type, transaction volume, merchant category, and whether a purchase is card-present or online. Merchants must also meet PCI DSS security requirements, with compliance obligations increasing according to annual transaction volume and potential penalties for failures. Tokenization can reduce exposure to sensitive payment and personal data by replacing it with non-sensitive identifiers, helping businesses process payments or manage customer information without directly storing raw data. The discussion also recommends that merchants, particularly high-risk businesses, consider multi-provider payment systems, smart routing, and cascading strategies to improve approval rates, maintain operational continuity, manage compliance, and support customer payment preferences.

Basis Theory has launched its Apple Pay endpoints out of beta, allowing customers to use Apple Pay tokens with any processor after debundling them once, while adding MPAN support for subscriptions, recurring payments, and card-on-file transactions alongside existing DPAN support for one-time purchases. The platform will also automatically update MPANs for customers. It now formally offers full network token support, enabling merchants to convert raw card data into secure network-issued tokens for one-time, recurring, card-on-file, and cross-border payments without storing PANs; these tokens can update automatically after card reissues and may improve authorization rates. Additional fixes improve RTAU property-response consistency, 3DS preferred card-brand handling, Node SDK use in Reactors, and programmatic validation across all Elements types.

Agentic commerce refers to AI agents completing transactions on behalf of consumers or businesses, promising greater efficiency by automating routine purchases while retaining human involvement for more consequential buying decisions. In a discussion on The Payments Strategy Show, Basis Theory CEO Colin Luce examines key challenges surrounding who initiates agent-driven transactions, how user intent and authorization can be verified, and where liability should reside. He argues that responsible adoption requires guardrails focused on identity verification, transaction permissions, and confirmation that a user genuinely intended an action, potentially supported by controls such as spending-limited virtual cards, platform-level safeguards, and biometrics. Luce envisions practical uses such as asking an AI assistant to locate an unavailable product at a nearby store, purchase it using a stored payment credential, and arrange pickup, while emphasizing that human oversight will likely remain necessary as agentic commerce develops over the next several years.

Smart payment routing directs transactions among multiple payment service providers (PSPs) according to rules designed to improve approval rates, reduce processing costs, support local payment methods, and avoid reliance on a single provider. It becomes more valuable as merchants scale, particularly internationally, because local processor relationships, differing payment-method support, and varying fee structures can affect transaction outcomes and expenses. Routing can include cascading, in which certain declined transactions are retried with another processor, although excessive retries may create risk with PSP partners. Payment routing differs from payment orchestration, which encompasses routing alongside broader capabilities such as fraud detection, transaction monitoring, and reconciliation. Implementing a multi-PSP strategy requires merchants to retain secure access to customer payment data, often through tokenization providers that vault card details and return reusable tokens, helping merchants route transactions without directly storing sensitive information or becoming locked into a single PSP.

European merchants commonly use multiple payment service providers (PSPs) to reduce dependence on a single provider, improve authorization rates across transaction types and countries, lower processing costs, and avoid disruptions or restrictive account policies. The approach is especially relevant in the EU because its diverse national payment preferences, frequent cross-border commerce, and Instant Payments Regulation—which requires banks to support near-immediate euro transfers—are expected to encourage further alternatives to card networks. While a single full-service PSP can offer faster implementation, predictable pricing, reduced development work, and help limit PCI-DSS compliance responsibilities, multi-PSP arrangements can broaden consumer payment options and enable transaction routing based on factors such as geography, fees, volume, and chargeback risk. To manage such strategies, merchants need secure payment-data collection and storage, often through PCI-compliant tokenization vaults, along with a decisioning system that directs each transaction to the most suitable provider.