It’s not about payments … it’s about trust

I just did an interview with LVTX about the future of payments. Sharing it here, fyi:

What is one of the biggest structural inefficiencies in the payments and financial services ecosystem that still hasn’t been solved?

One of the biggest structural inefficiencies in financial services today isn’t payments or settlement. It’s digital trust.

The fact that we have to go through question after question to make a payment today is ridiculous. The fact that making a £10 payment can involve more authentication than moving thousands of pounds twenty years ago tells you everything that's wrong with digital trust today. What we have created is analogue bureaucracy wearing a digital mask.

Twenty years ago, I walked into my local bank branch. The cashier knew me. The manager knew me. If I wanted to make a payment, open an account or discuss a mortgage, my identity was established because there was an ongoing trusted relationship.

Today, a “digital” customer journey often looks like this:

• Enter your password.
• Receive an SMS code.
• Open your email for a verification link.
• Approve a push notification.
• Enter a one-time passcode.
• Complete facial recognition.
• Answer security questions.
• Confirm the payment from another device.

All to transfer your own money.

The irony is that technology has made moving money almost instantaneous. It can travel across the world in seconds. Yet proving that *you are you* can take longer than the payment itself.

The industry has confused security with friction. We have mistaken inconvenience for security. We keep making life harder for honest customers whilst criminals find new ways around the barriers.

Every institution asks me to prove my identity independently. My bank doesn’t trust my pension provider. My insurer doesn’t trust my bank. My investment platform doesn’t trust my mortgage provider. Every relationship starts from zero.

That means the same passport is scanned dozens of times. The same driving licence is uploaded repeatedly. The same selfie is taken over and over again.

There are now hundreds of digital identity providers in the UK alone, generating over £2 billion in annual revenues, largely because every organisation is trying to solve exactly the same problem independently.

The result is an astonishing duplication of effort.

The really frustrating part is that onboarding is often the easiest bit.

Many fintechs proudly advertise that you can open an account in five minutes. Fantastic.

Then, three months later, you receive an email saying:

“For regulatory reasons we need you to verify your identity again.”

Six months later:

“We’ve noticed you’re logging in from a new device.”

A year later:

“Please update your proof of address or your account may be restricted.”

Then comes the payment that triggers an additional authentication because it looks “unusual”, even though you’re paying exactly the same person you have paid every month for the last five years.

Customers don’t experience this as security.

They experience it as bureaucracy.

The industry often blames regulators, but regulators rarely specify *how* firms should authenticate customers. They require firms to manage risk. Many institutions respond by adding another layer of authentication because nobody gets criticised for asking one more question. The result is cumulative friction rather than intelligent security. The UK’s regulator has itself highlighted the need for firms to improve digital customer journeys and avoid unnecessary friction while still meeting regulatory obligations.

The commercial impact is enormous.

Industry research consistently shows that onboarding friction causes significant customer abandonment. Recent studies found that more than half of financial institutions report losing customers because KYC processes are too cumbersome, while corporate banking research found that 84% of treasurers are frustrated by existing KYC processes and 86% reported business losses resulting from lengthy onboarding.

Imagine if Amazon worked like this.

You buy a book.

Amazon asks for your passport.

Two weeks later it asks again because you’re using a laptop instead of your phone.

A month later it wants another selfie before buying batteries.

You’d shop somewhere else.

Yet we’ve somehow normalised exactly this experience in financial services.

The deeper problem is that identity isn’t portable.

I don’t own a reusable, trusted digital identity that I can present to any financial institution. Instead, every institution builds its own copy of me, verifies it independently and stores another set of my personal information.

That’s expensive, inefficient and actually increases cyber risk because my identity exists in dozens of separate databases.

The future has to look different.

Rather than authenticating ourselves repeatedly, we should authenticate once and then carry verifiable credentials that allow us to prove only what is necessary. Instead of handing over my passport, perhaps I only need to prove that I’m over eighteen. Instead of revealing my full financial history, perhaps I only need to prove that I earn above a particular threshold. Technologies such as verifiable credentials and zero-knowledge proofs make this increasingly possible.

Ultimately, the industry’s biggest structural inefficiency isn’t moving money. We’ve largely solved that. It’s establishing digital trust.

Once trust becomes portable, payments become invisible. Until then, we’ll continue living in a world where sending £10 involves five authentication steps, three devices and two different communication channels.

Despite significant advances in payments technology, legitimate transactions are still declined every day. What do you believe needs to change across the ecosystem to materially improve approval rates?

It comes back to trust.

The reason legitimate payments are declined isn’t because payment networks don’t work. Visa, Mastercard and faster payment systems process billions of transactions incredibly reliably. The problem is that fraud has exploded, so every payment is now judged through the lens of risk.

Global fraud losses now run into tens of billions of dollars every year, and authorised push payment scams, account takeover fraud and identity theft continue to rise. Financial institutions are understandably cautious, but the consequence is that genuine customers increasingly get caught in the net.

We’ve created a system where millions of honest people face friction because of a tiny minority of criminals.

It’s like running a cross-country race where every few hundred metres someone has added another six-foot hurdle. You eventually finish the race, but you wonder why it was made so difficult in the first place.

The industry has responded by adding more authentication: SMS codes, passkeys, authenticator apps, biometric checks, device recognition and behavioural analytics. All of these help, but they’re treating the symptoms rather than the underlying problem.

The real issue is that we still don’t have a trusted, portable digital identity. Every organisation has to authenticate you independently because there isn’t a universally trusted way of proving who you are online.

If we can solve digital identity, we improve everything. Approval rates go up because firms have greater confidence they’re dealing with the right person. Fraud comes down because criminals find it much harder to impersonate someone else. And customers stop being treated as suspects every time they want to make a perfectly legitimate payment.

That’s the missing piece. We’ve solved speed. Now we need to solve trust.

Once we can trust who is making the payment, approval rates rise, fraud falls and payments start disappearing into the background.

Many businesses still view payments as an operational necessity rather than a strategic growth lever. Looking ahead, do you think that mindset will change? Why or why not?

I think that view is already outdated. Payments are no longer just about moving money from A to B. They’re becoming a strategic part of how businesses grow, manage cash flow and serve customers.

Look at what’s happened over the last decade. Companies like Stripe, Adyen, Block and PayPal haven’t built multibillion-dollar businesses by making payments marginally cheaper. They’ve built platforms that help businesses acquire customers, expand internationally, improve conversion rates, automate invoicing, optimise working capital and access financing. Payment data has become business intelligence.

For many businesses, payments are now the front door to the customer relationship. A poor checkout experience or failed payment can mean a lost sale, while a seamless one increases conversion and customer loyalty. Studies regularly show that friction at checkout is one of the biggest causes of abandoned purchases, so payments directly affect revenue, not just operations.

We’re also seeing payments become embedded within broader business workflows. Today’s SMEs increasingly expect integrated accounting, payroll, tax, reconciliation, invoicing and cross-border capabilities, all connected through APIs. They don’t want separate banking, accounting and payments systems; they want one seamless financial operating platform.

The same is true for larger corporates. Treasury teams are using real-time payments to improve liquidity, optimise working capital and gain better visibility over global cash positions. Payments have become a source of strategic data, not just a back-office function.

The challenge for traditional banks is that many were built around products such as current accounts, loans and cards. Fintechs are increasingly built around solving business problems. Payments are simply one component of that solution.

That’s why the mindset is changing.

Businesses are no longer buying payment processing. They’re buying customer experience, cash-flow intelligence and trusted digital relationships. They’re no longer asking, “How do I make a payment?” They’re asking, “How can payments help me grow faster, operate more efficiently and serve my customers better?”

That’s a fundamentally different conversation, and one that will increasingly define the future of banking.

As AI, digital identity, and real-time data become more prevalent, how do you see the balance between fraud prevention and frictionless customer experiences evolving?

I think we’re moving towards a world where authentication becomes almost invisible.

Today, we prove who we are by doing something: entering a password, typing an SMS code, approving a push notification or opening an authenticator app. In the future, we’ll increasingly prove who we are by simply being ourselves.

Wearables, AI and continuous biometrics are taking us in that direction. Smart glasses, watches and phones are already capable of recognising your face, voice, fingerprint, location, behaviour and even the way you walk or hold your device. AI can combine dozens of these signals in real time to build confidence that it’s really you, without interrupting the customer experience.

That’s a much better model than repeatedly asking people for passwords and passcodes. Security should become continuous rather than episodic.

Having said that, biometrics are not a silver bullet. My ten-year-old son said, “If I want more Roblox money, I’ll just use your Face ID while you’re asleep.”

It proves a point. Biometrics aren’t perfect. Criminals adapt. We’ve already seen deepfakes become sophisticated enough to fool some facial recognition systems.

The numbers show why this matters. Passwords remain one of the weakest links in cybersecurity, and phishing and credential theft continue to account for a huge proportion of fraud. At the same time, global fraud losses run into tens of billions of dollars every year. The industry can’t afford to choose between security and convenience. It has to deliver both.

The future lies in AI making dynamic, real-time risk decisions. If I’m using my usual device, in my usual location, at my usual time of day, making a payment to someone I’ve paid before, the transaction should happen instantly with no friction. If, however, I’m trying to transfer £20,000 from a new device in another country at three in the morning, the system should challenge me.

In other words, authentication should become risk-based rather than rule-based.

The best security is the one you never notice. When AI, digital identity and biometrics work together, genuine customers should experience less friction while fraudsters face more. That's how payments become invisible. Not because they're less secure, but because digital trust has become continuous.

What is one prediction about the future of payments that you are willing to put your name behind today?

As trust becomes digital, payments become infrastructure. Businesses won’t compete on how money moves. They’ll compete on the experiences built around it. In ten years’ time, payments won’t disappear, but they’ll disappear from our consciousness, in much the same way we stopped thinking about connecting to the internet.

Intelligent agents, trusted digital identities and embedded finance will mean commerce happens continuously in the background. We’ll no longer authorise individual transactions. We’ll authorise trusted relationships and intelligent agents to act on our behalf within limits we set.

The future of payments isn’t better payments. It’s a world where payments become invisible because trust has become digital.

Talking of which, come back here on September 1 for the offical launch of www.pulpfinction.com which is all about trust.