Small and medium sized business (SMB) owners are continuously challenged with not only running their business, but also adapting to evolving technologies and consumer demands at the checkout. New payment options like buy now pay later (BNPL) and embedded
finance have become essential, which has impacted the relationship between merchants and their payment services providers (PSPs) as the business model expands beyond just payments.
Finextra spoke to Jennifer Reichenbacher, chief marketing and customer experience officer at Stax Payments, on the current payments processing landscape, how SMBs can leverage new technologies to optimise their payments offerings, and what the future of
ecommerce will entail.
The SMB perspective and modernising internal payments
SMBs make up a huge portion of the global market, and are largely underserved. SMBs’ varying size and segments of retailers make it difficult to pay higher costs to adopt the latest technology. With the innovations in ecommerce and SaaS, SMBs are expected
to deliver on fast and frictionless experiences, which can lead to complexities.
“We're all experiencing this new wave of payments. We're all getting very used to being able to seamlessly order something and have it delivered without having any credit card details or personal information…consumers are consumers, merchants are consumers,
and they're trying to create a better experience for their downstream customers. Through that whole value chain, there's just more of a need for a frictionless experience,” says Reichenbacher.
Reflecting on the last five years in the payments industry, Reichenbacher identifies three macrotrends:
- The shift to digital and cashless payments post-pandemic: cash use has declined 20% since 2019 and has been falling at a rate of 4%
year-over-year, which has pushed the US closer to the rate of contactless adoption occurring globally pre-pandemic.
- The emergence of software-led payments: the software-as-a-service (SaaS) industry has skyrocketed, which has accelerated the scale and integration of digital payments into businesses.
- Rise of value-added services: PSPs derive 15-20% of net revenue from value-added services, the payments model has multiplied and expanded through embedded
finance.
The best option is to have a unified system, as too many businesses have fragmented systems to operate
payments, Reichenbacher explains, manual payments must be phased out.
“SMBs are working in their business, not necessarily on it. Once they get over the hurdle, having a unified system is key. Even larger businesses typically use six to seven systems to manage payments, which is a fragmented environment that likely does impact
not just internal operational efficiency and cost, but also the customer experience.”
Reichenbacher approaches the challenges SMBs are facing from a business management perspective, highlighting how ISVs in the US have a vertical focus and the SaaS solutions provide a holistic offering by allowing businesses to reach out into tangential sectors
to fuel growth and expansion. Moving with the pace of the industry, businesses are developing omni-channel platforms to support consumers to make payments and engage with the business on multiple levels.
She explains how independent software providers (ISV) have their own ‘hub and spoke’ models of functionality, and embedded payments has similarly expanded its offerings beyond just payment acceptance.
“Data and timely access to data are key. Within the micro-environment, within payments, that's deposit and reconciliation, it's fraud alerts, it's things that are helping you make sure that what you think you're getting paid is what is going into your bank
account. As payment providers it’s our responsibility to make understanding payments as easy as possible for an SMB - whether that's SMS alerts, notifications, reserves, whatever it may be - making sure that they're well protected and well informed. Communication
has never been more important.”
Reichenbacher states biometrics and buy now pay later (BNPL) are “monumental” new developments in the sector. The potential of biometrics for authentication in in-person payments is still buzzing amongst retailers, with big-name stores such as Amazon Fresh
and Whole Foods testing out biometrics at checkouts. Globally, BNPL made $9.5 billion in 2025,
which is 5% of all ecommerce transactions – indicating massive demand amongst retail consumers.
Reichenbacher’s advice to SMBs is to ensure real-time payments and quick processing are implemented, and for there to be optionality during checkout, in-person and online. Conceding that the online checkout window is starting to “look like Times Square”
with multiple bank options, wallet providers, BNPL, and card brands – it is vital to “meet the consumers where they’re at”.
Data and AI driving vertical-based payment solutions
“AI is dependent on data,” Reichenbacher stated, explaining that data will be a “strategic asset” for the fintech sector moving forward to drive partners and merchants to increase agility and scale faster.
Reichenbacher emphasises the potential of agentic AI to revolutionise payments processing. She predicts that AI has the potential to change retail and online commerce through agents, and online shopping as we know may be forever changed by the possibilities
of agentic commerce. Marketing and commerce will be driven by agentic engine optimisation and generative engine optimisation instead of search engine optimisation, she posits.
The very meaning of payments has been revised, Reichenbacher explicates: “Payments has been viewed as more of a transactional service. I think we are continuing to redefine, both from an ISV perspective as well as from a merchant perspective,
payments as a growth opportunity. The data that you get from payments helps you grow your business, the value that you get from embedded payments for SaaS helps them grow their revenues and their overall performance.”
The SaaS and payments combo is unbeatable, Reichenbacher states, and through AI optimisation integrating software into a “core intelligence layer”, it deepens the relationship with the customer and makes the business more scalable and efficient.
Reichenbacher also touches on how AI is being used in fraud prevention and monitoring, providing a snappy phrase to accompany Stax’s AI approach: “AI-assisted, human approved”.
Reichenbacher highlights how embedded software combines powers of business management and payments that open more doors for ISVs and merchants. To meet the growing market, businesses and payments providers need to be maturing together, coordinating their
offerings, and providing flexibility for the consumer. Embedded payments simplify the onboarding process, supports activation process with setting up SaaS services, and streamlines regulatory and compliance needs.
Key trends looking forward
Reichenbacher highlights that the most transformative shift in payments is the transition from standalone to embedded to create more frictionless and integrated payments journeys. She further mentions that key trends to keep an eye on are BNPL, real-time
and instant payments under FedNow, tokenisation, and biometrics.
Re-emphasising what SMBs should be focused on, Reichenbacher echoes the impact that omni-channel convergence will have on time to cash, time to revenue, and scaling up a company.
“Do your research clearly, understand your needs and goals, and just don't shop on price,” Reichenbacher advises to merchants, “You have to think about the future; about the cost of change, the cost of not getting business, not just the cost of what you
need for the baseline. The merchants and SMBs who will win will adopt strategies that combine frictionless experiences, payment choice, real time, money movement, and data-driven insights while relying on their modernised PSPs and orchestration platforms.
Treat payments as a customer experience. Diversify your payment options and unlock the value of payments data.”