Serhii Zakharov is CEO of PayDo.
Most people think that boxing matches are won by throwing the most punches, but fights are actually won by controlling the ring. Positioning decides the outcome before the first exchange, and the punches only confirm it.
I’ve been looking at payments through this lens for years. The industry spent the last decade obsessed with who’s disrupting whom: neobanks versus legacy banks, fintechs versus incumbents. The framing always returns to one question: Who’s winning the customer?
That question focuses on the fight, not on the ring. While everyone watched the fight, another shift was happening beneath the surface: The entities that control payment rails—the pipes through which money moves—are becoming the defining power centers of modern financial services.
The Fragmentation Tax
For most of the 20th century, the bank was the center of commercial gravity. Businesses didn’t choose a bank the way they chose a supplier. They were born into it, grew dependent on it and stayed because switching cost too much.
Banks were able to build this monopoly by leveraging infrastructure access. They were the only institutions with direct membership to the schemes, so the rails were theirs by default.
This has led to a problem for many businesses. In my work managing payment infrastructure, the business leaders I talk to consistently describe the same core problem, even if the details look different: Generally, they’re managing four, five, sometimes eight payment providers on separate contracts, with separate onboarding, compliance reviews and API integrations.
Each was, at some point, the best available solution for a specific need, but what they’ve built, without intending to, is a fragmented stack that taxes every decision they make.
With this infrastructure, a new market can take months because three separate providers have to approve it. Reconciliation runs on a spreadsheet no one fully trusts. When a payment fails, finding the cause means checking logs across systems that don’t talk to each other.
I call this the fragmentation tax, which is measurable by the cost of what it takes financial teams to reconcile between disconnected systems.
Research by Ardent Partners found that the average business takes 10.9 days to process a single invoice from receipt to ready-to-pay, at an all-in cost of $10.18 per invoice, a figure that rose 10% in a single year. The research also shows that only 30.2% of invoices move through without manual intervention, and nearly a quarter get flagged as exceptions someone has to chase by hand.
Every one of those numbers is a symptom of the same condition: Finance teams reconciling between systems that were never designed to talk to each other.
That’s what the fragmentation tax looks like on a balance sheet: delayed revenue, distraction and strategic decisions never made because the baseline is too unstable to build on.
The bank-centric model created this structurally. When the bank is your infrastructure and also has commercial interests in the services you buy, you get a stack optimized for the bank’s revenue rather than your operations.
The Architecture Of The Shift
Much of the discourse around the architectural shift today frames the companies rewriting this dynamic as bank challengers, but that misidentifies what’s happening.
A bank challenger wants to replace the bank in the customer relationship: better UX, lower fees, faster onboarding. Competitive, but still playing the same game on the same board.
What’s actually reshaping the industry is open banking, a move one layer down from the interface to the rails themselves. For example, as McKinsey notes, one open banking trend, account-to-account (A2A) payments, which moves payments directly between the buyer and the seller, is becoming increasingly prevalent.
Based on my experience in this sector, this can greatly reduce transaction costs once all fees, FX margins and network charges are counted. Other McKinsey research notes that merchant adoption of A2A is rising because the transactions are low-cost, irrevocable and more secure, and that this model can significantly reduce fraud and chargebacks.
The industry isn’t drifting toward consolidation by accident. The economics are forcing it.
Why The Timing Is Now
For most of banking history, the license to hold funds, access payment rails and process transactions were bundled inside one institution.
Regulators have spent the last decade deliberately unbundling them.
On top of adding consumer protections, open banking, PSD2 and the upcoming PSD3 broke apart the monopoly on infrastructure access banks held by default. For the first time, a company can sit directly on the rails, under its own regulatory permissions, without renting access through a sponsor bank.
Speed did the rest. iGaming operators, digital platforms, SaaS companies with international revenue and marketplaces running multi-sided flows found it difficult to operate at the cadence banks were built for, making instant settlement, real-time fraud decisions and API-first infrastructure desirable.
What Still Stands In The Way
None of this means consolidation is simple, or right in every case. The most obvious trade-off is concentration risk: Routing your entire payment operation through fewer providers means a single outage has a wider blast radius.
Europe’s DORA framework now explicitly requires regulated firms to manage concentration risk and maintain exit strategies. Consolidation without a credible fallback isn’t efficiency, but a new single point of failure.
Migration is the second obstacle: rebuilding integrations, re-mapping compliance workflows and retraining teams routinely run longer than planned. The way through is the same as with any critical vendor—demand contractual continuity, genuine data portability and a clean exit path.
Companies shouldn’t look at consolidation as handing over the keys but as a deliberate plan that requires strong governance.
The Question Worth Asking
If you run a business that processes payments, one question is worth sitting with: Are your payment operations a function of your strategy, or a constraint on it?
If entering a new market requires six months of provider negotiations: constraint. If reconciling last month’s revenue requires three people and a spreadsheet: constraint. If your payment stack is something your operations team works around rather than builds on: You’re paying the fragmentation tax.
In the ring, the fighter who controls the space wins. The punches just confirm it.
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