In a world where the average consumer has more computing power in their pocket than the Apollo 11 spacecraft, it’s no surprise that the financial landscape is undergoing a seismic shift. That shift is rapidly progressing past innovations in contactless payments or mobile banking. A fundamental reimagining of how consumers and businesses interact with money and value is at stake.
Case in point: For decades, payment cards served specific, often distinct purposes. Credit cards offered options to pay in full, revolve or access rewards. Debit cards provided access to funds on hand. Today, those lines are blurring. As Senior Vice President and Head of Visa Issuing Solutions Kathleen Pierce-Gilmore told Karen Webster in a series of recent interviews, the payments and banking industry is witnessing innovations that reinvent the credit experience, such as buy now, pay later (BNPL) solutions, while debit is transforming into an account-to-account (A2A) experience through open banking initiatives. Payment cards are increasingly becoming digital credentials embedded in both online and offline use cases — integrated seamlessly into the fabric of commerce itself.
“The pace of change across the last 50 years has been nothing compared to what has happened over the last five years,” Pierce-Gilmore told Webster.
An important new development in this evolution is the creation of flexible digital credentials. Visa’s “Flexible Credentials” offering allows consumers to toggle seamlessly between payment options like credit, debit or BNPL with just a click. For example, a consumer shopping online might choose to use BNPL for a larger purchase while opting for a debit transaction for smaller, everyday items — all managed easily from the same digital wallet. “We’re putting maneuverability in the hands of the consumer,” Pierce-Gilmore said. She emphasized that the days of physical cards are giving way to a set of digital credentials that are bolstered by decades of infrastructure, scale and security.
The convenience extends beyond just paying; it includes how consumers manage their transactions after the fact. Digital credentials allow for flexible management, enabling users to understand and control their spending patterns in new ways. “To retain relationships, issuers need to give this flexibility to the consumer,” Pierce-Gilmore said. “This is a key mission statement for us. We stay ahead of customer expectations.”
In practical terms, this means that card issuance itself is evolving. Getting a new card is no longer a physical, cumbersome process. Instead, Visa’s digital issuance solutions ensure that consumers can access their cards — or credentials — in real time, right when they need them, wherever they may be. With Click to Pay, consumers can register their preferred Visa card as their default payment option for an easy checkout experience.
Visa is also helping issuers navigate complex new regulations and the technical challenges associated with digital transformation. Visa’s software developer kits (SDKs) help issuers embrace digital issuance more efficiently. “This is one of the key areas we want to highlight. The SDK is a way to make it a lighter lift for our issuers — whether it’s provisioning, digital issuance, or subscription management,” Pierce-Gilmore said. This technology helps issuers deploy solutions quickly while focusing on the needs of their customers.
Once cards are provisioned, Visa is working on several AI applications. AI not only helps create a personalized experience throughout the customer lifecycle but also enhances the utility of the digital credential. By analyzing customer behavior, AI helps issuers and merchants offer contextual loyalty rewards and personalized shopping experiences. This is a boon for consumers who now expect a seamless and intuitive shopping journey, whether they’re online or at a physical store. “I can’t stand watching an inefficient payment experience,” Pierce-Gilmore said, emphasizing the value of a frictionless transaction process.
With increasing digitalization, the need for robust fraud protection becomes crucial. Visa continues to innovate in the fraud-defense space, with digital credentials and tokenization serving as key elements of a secure payments ecosystem. For example, Visa recently implemented real-time transaction monitoring using AI to detect and prevent fraudulent activities, enhancing security for both consumers and merchants. Tokens — which replace sensitive data with a secure, randomly generated identifier — reduce points of vulnerability for fraudsters. “You can continue shopping, and there is never the need to get a physical card,” Pierce-Gilmore said. “One potential point of vulnerability is taken out of the mix.”
Pierce-Gilmore draws a parallel between digital innovation and proactive planning. Banks and issuers must continuously adapt to meet consumer expectations while simultaneously managing the complexities of legacy systems and technical debt. She noted that traditional bank architectures, often built on older systems like COBOL, pose unique challenges. “In some cases, banks do not even have a full view of their current architecture because it’s been built on top of and over for years,” she said, adding that addressing this challenge is critical for advancing digital capabilities.
The concept of modular technology is helping many financial institutions navigate this transition. Unlike traditional monolithic systems, which are cumbersome and hard to overhaul, a modular approach allows issuers to tackle legacy challenges incrementally while modernizing their offerings. For instance, instead of replacing an entire core banking system, a bank can implement a new customer interface module while retaining existing backend systems. This reduces costs, minimizes risks, and accelerates the modernization process. Visa’s recent acquisition of Pismo, a cloud-native provider of banking and payments services, further highlights this strategy. By leveraging Pismo’s capabilities, Visa helps its client banks adopt microservices tied to APIs — enabling more agile and scalable development.
“We can sit down, collaborate with banks and help them think through what kind of transformation they’re going to go through — whether it’s their core banking platform, issuing or processing,” Pierce-Gilmore said. The approach is about building a future-proof payments infrastructure by combining the best of in-house capabilities with third-party solutions. “The modular approach means that issuers can keep the infrastructure they want while opting to use a FinTech partner like Pismo for specific services,” she said.
The rise of cloud-native modular banking enables banks to use a “Lego block” approach, allowing them to craft different consumer experiences by connecting various components. “If you’re getting these out-of-the-box solutions, it’s streamlined,” Pierce-Gilmore said. “It gives you the ability to innovate, it’s a lot less expensive, it has much easier processes and it’s easier to manage risk.”
Ultimately, what’s driving these changes is the consumer. As people’s expectations evolve, banks and payment providers must adapt to provide a seamless, personalized experience that meets customers where they are — both digitally and physically. “The ability to get your card into your digital wallet has to be simple,” Pierce-Gilmore said. And it’s not just about adding convenience; it’s also about ensuring that consumers have control over their financial lives.
These innovations signal a shift in how financial institutions think about payments. The focus is on delivering better digital experiences while tackling legacy system challenges and meeting regulatory demands. The banking world is moving toward a landscape where digital issuance, modular services, and personalized consumer experiences are the new norm.
As Pierce-Gilmore put it, “You have to participate in whatever the consumer is using.” This ethos of consumer-centric adaptability will define the future of payments — a future where flexible, secure and instantly accessible digital credentials are at the core of every transaction.
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