In B2B transactions, the payer wants to delay payment to manage float, while the receiver wants funds immediately. This adversarial dynamic incentivizes the use of slow systems like paper checks, hindering modernization that benefits both parties in consumer payments.
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Standard corporate processes, like 90-day payment terms and complex RFPs, can cripple small, diverse suppliers. Adapting by offering shorter payment terms and streamlined processes is essential not only for their survival but also for large companies to tap into a wider pool of creativity and diverse thought.
The inefficiencies in partner programs, like slow MDF payments, are not due to untrustworthy people but a legacy Web2 system. As partner ecosystems scale globally, this centralized infrastructure creates more gatekeepers, rules, and checks, resulting in "bureaucracy at scale" that damages the partner experience.
To counter the rise of free, government-backed account-to-account (A2A) payment systems, Visa is building its own A2A network. It then monetizes these flows by adding value-added services like real-time fraud detection and global interoperability—features that basic, local bank-transfer systems cannot match, turning a commodity threat into a premium offering.
Many large businesses fail to implement ideal, one-click payment recovery systems because revenue teams lack engineering resources and the financial impact isn't salient to executives. This inaction can cost tens of millions of dollars for want of a few days of work.
Affirm's CEO suggests competitors don't report payment data to credit bureaus as a business strategy. By keeping delinquencies off the 'permanent record,' they can implicitly encourage late payments, from which they profit via fees. Affirm, having no late fees, advocates for full reporting.
Rather than engaging in destructive price wars, Visa and Mastercard prioritize maintaining high industry margins. Their primary competitive focus is on converting the world's $11 trillion in cash and check transactions to digital, effectively expanding the entire market for both players instead of fighting over existing share.
The friction in the current financial system—intermediary fees, settlement delays, and complex processes—acts like a tax paid by everyone. Crypto aims to eliminate this "tax" by creating more efficient, direct transaction pathways, akin to paving over potholed roads.
Platforms like ChatGPT achieve global scale in years, not decades. This speed means relying on a single payment service provider (PSP) is no longer viable. Companies now need a multi-PSP strategy to optimize routing and maintain leverage, creating a market for orchestrators like Basis Theory.
Large enterprises operate on complex webs of legacy systems, compliance controls, and fragile integrations. Their high risk aversion and lengthy change management cycles create a powerful inertia that will significantly delay the replacement of established B2B software, regardless of how capable AI agents become. Enterprise architecture moves slower than market hype.
The financial system is unprepared for the coming wave of AI agents. These agents will perform tasks and require payment, creating trillions of micropayments. Current infrastructure from Stripe, Visa, or Mastercard cannot handle this volume, creating a massive opportunity for new protocols to facilitate the 'agent economy'.
