API-First Payments Infrastructure
Charles Birnbaum, partner at Bessemer Venture Partners, on the five waves of fintech
The real opportunity is not in inventing new payment rails, but in replacing old bank connected plumbing with software that developers can actually build on. In the U.S. and Europe, much of payments still runs through legacy processors, sponsor banks, file feeds, and manual compliance steps. That leaves room for cloud style infrastructure players that turn months of bank integration work into APIs for cards, ACH, accounts, and embedded finance products.
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Older processors like FIS, Fiserv, TSYS, and Jack Henry still handle most payment volume, but newer players such as Marqeta, Lithic, Unit, and Bond package those same functions into developer tools. The shift is less about new economics than about faster implementation and better product control.
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The bottleneck is the bank stack itself. Modern providers still have to sit on top of bank cores, old file feeds, network integrations, and compliance workflows, then translate all of that into clean APIs. That is why cloud migration in payments has been slow, and why the winners look like infrastructure companies, not consumer brands.
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B2B payments is especially early. Carded B2B payments are only about $2T of a $125T global B2B payments market, and BaaS providers make meaningfully more on B2B transactions than B2C. That creates strong incentives to build software that moves business spending from checks and bank portals into programmable card and payment flows.
The next phase is a deeper rebuild of financial infrastructure into modular software. As more vertical SaaS platforms, marketplaces, and non financial apps add payments, cards, and accounts, value will keep shifting from legacy processors toward API layers that make financial products faster to launch, easier to customize, and easier to embed inside ordinary business software.