Payment Processing Basics

A new model in Payments is emerging: 𝐓𝐡𝐞 𝐒𝐭𝐚𝐛𝐥𝐞𝐜𝐨𝐢𝐧 𝐒𝐚𝐧𝐝𝐰𝐢𝐜𝐡 Here's how it works: For decades, international payments have moved through a network of correspondent banks. Each transaction passed through multiple intermediaries, from local to international correspondents and back again, taking days and incurring fees at every step. This system worked, but it was slow, expensive, and opaque. A new model is emerging — The Stablecoin Sandwich — where blockchain replaces those intermediary layers to enable direct, near-instant settlement. Here’s how it works: → The sender initiates a transfer in fiat (for example, euros). → An on-ramp partner converts those euros into a stablecoin such as USDC. → The stablecoin moves across the blockchain, serving as the settlement medium. → An off-ramp partner converts the stablecoin into local currency (such as pesos or reais). → The recipient receives funds in their local account, often in under 30 minutes. → This hybrid flow combines the compliance and familiarity of traditional finance with the efficiency, transparency, and programmability of blockchain technology. The scale of this transformation is already visible. Stablecoin transactions now exceed $7 𝐭𝐫𝐢𝐥𝐥𝐢𝐨𝐧 annually, surpassing 50% of Visa’s global network volume: https://bit.ly/49aC07G Stablecoins are becoming a fundamental layer for liquidity management, B2B settlement, and cross-border treasury flows. An entire ecosystem is forming around this shift: → 𝐄𝐧𝐭𝐞𝐫𝐩𝐫𝐢𝐬𝐞 & 𝐁2𝐁: BVNK, Bitwave, and Contact are helping global merchants manage stablecoin liquidity, compliance, and treasury operations. → 𝐁𝐥𝐨𝐜𝐤𝐜𝐡𝐚𝐢𝐧 𝐈𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞: Polygon Labs, Aptos Labs, and Chainlink Labs are building the rails that connect traditional payment networks with blockchain-based settlement. → 𝐖𝐚𝐥𝐥𝐞𝐭𝐬 & 𝐂𝐮𝐬𝐭𝐨𝐝𝐢𝐚𝐧𝐬: Dfns and BitGo offer programmable, secure wallet solutions designed for enterprises managing large digital asset volumes. → 𝐏𝐚𝐲𝐦𝐞𝐧𝐭 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐨𝐫𝐬: Mural Pay, Fipto and Noah are integrating stablecoin rails into existing payment stacks, bridging traditional and digital commerce. → An exciting one, Breeze is reimagining the 𝐌𝐞𝐫𝐜𝐡𝐚𝐧𝐭 𝐨𝐟 𝐑𝐞𝐜𝐨𝐫𝐝 (MoR) model with programmable, blockchain-enabled settlements that occur instantly. What's happening is not a replacement of the financial system, but an upgrade. Traditional bank accounts are evolving into wallets. Money movement is becoming programmable. Settlement is shifting from days to seconds. The Stablecoin Sandwich represents a new layer of global financial infrastructure, one that merges the reliability of banks with the speed and transparency of blockchain. Source: Fipto, CB Insights, Dawn Capital, and kudos to Arthur Bedel for this great update! 👌 Find this helpful? [𝗿𝗲𝗽𝗼𝘀𝘁] Anything to add about this subject? [𝗶𝗻𝘃𝗶𝘁𝗲𝗱 𝘁𝗼 𝗰𝗼𝗺𝗺𝗲𝗻𝘁] Nice story, Marcel. Next! [𝗹𝗶𝗸𝗲]

The PayPal, Mastercard and Visa announcements are not about agentic AI. They are about ownership of the next chapter of commerce and payments. Here is how they compare. 𝗪𝗵𝗮𝘁 𝗵𝗮𝘀 𝗯𝗲𝗲𝗻 𝗮𝗻𝗻𝗼𝘂𝗻𝗰𝗲𝗱: -   PayPal : APIs that let any AI agent pay, track shipping, issue invoices and resolve disputes without leaving the chat. -   Mastercard : Network tokens + passkeys so agents become “trusted purchasers,” with programmable rules and biometric SCA baked in. -   Visa:  Five modular APIs for discovery → checkout, including user‑set spend caps, MCC filters and real‑time approvals. 𝗪𝗵𝗮𝘁 𝗶𝘀 𝗮𝘁 𝘀𝘁𝗮𝗸𝗲? -   The payments race has always been about shaving seconds off checkout. In the agentic era, the winning time is 0 seconds, 0 clicks. Checkout disappears entirely as search, recommendation, and payment collapse into a single LLM-driven conversation. -   Whoever owns the payment credential becomes the default wallet in the loop, capturing not just the transaction, but data, interchange, and value-added services that follow. -   The players that get this right won’t just win conversions. They’ll own the customer relationship. The ones that don’t will find themselves disintermediated by someone else’s agent. 𝗧𝗵𝗲 𝗽𝗼𝘁𝗲𝗻𝘁𝗶𝗮𝗹: Imagine: • A travel bot books flights, hotels, insurance and pays - no forms. • An SME sourcing agent negotiates fabric in Guangzhou and settles with a virtual card - no emails. • A grocery assistant notices the fridge is low and re‑orders - no conscious decision. Multiply that by every vertical and every consumer. That’s always‑on demand capture - and potentially trillions in incremental volumes routed through whoever provides the agent‑native rails. 𝗪𝗵𝗮𝘁’𝘀 𝗹𝗶𝗸𝗲𝗹𝘆 𝗻𝗲𝘅𝘁: 1.     Industry standards: Common schemas for trusted-agent registration, permissions, and dispute handling. 2.     Granular consumer controls: Per-transaction biometrics, spend limits, time-of-day and merchant-category restrictions. 3.     Merchant enablement: SDKs and APIs to expose real-time inventory, pricing, and loyalty programs to agents. 4.     Regulatory attention: How frameworks like PSD3, CFPB guidelines, or MAS oversight will apply to autonomous payers. 5.     New revenue models: Pay-per-call risk scoring, agent onboarding fees, premium fraud protection layers. 6.     Advanced risk infrastructure: Real-time monitoring of agent behaviour, intent detection, and adaptive risk scoring to flag anomalies. 7.     Liability frameworks: Clear rules for who’s accountable when an agent transacts incorrectly: the user, the platform, or the agent provider. The race to build the payment infrastructure for autonomous agents is underway. Expect a wave of partnerships, acquisitions, and early execution challenges as the industry adapts to a new model of always-on, agent-driven commerce. Opinions: my own 𝐒𝐮𝐛𝐬𝐜𝐫𝐢𝐛𝐞 𝐭𝐨 𝐦𝐲 𝐧𝐞𝐰𝐬𝐥𝐞𝐭𝐭𝐞𝐫: https://lnkd.in/dkqhnxdg

Late payments remain one of the biggest threats to growth for small Professional Services firms. Cash flow isn’t just a financial issue, it’s a strategic constraint on growth. Many firms run high-margin but cash-intensive models. When clients take 60, 90, or even over 120 days to pay, smaller firms effectively end up financing their clients’ businesses, covering payroll, rent, and operating costs long before invoices are settled. We’ve seen firms with real momentum lose pace, not due to a lack of opportunity, but because they were unintentionally acting as their clients’ bank. We’ve felt it ourselves, even one delayed payment from a client can tie up capacity, push back hiring plans, and stall investment, all while senior leadership is focused on chasing cash instead of driving growth. The ripple effects are real. Every dollar locked up in receivables slows decision-making. Every cash gap limits appetite for risk. And too often, those same firms are forced to delay payments to their own suppliers, creating a knock-on effect across the industry. Some firms turn to invoice factoring or short-term financing, but both come at a cost, eroding margins and increasing long-term pressure. And in a competitive market, smaller firms often lack the leverage to dictate terms. The firms that scale sustainably do so with discipline. They set clear expectations, diversify their client base, and design operating models that protect working capital. They don’t let late payments dictate performance, or subsidize someone else’s balance sheet. It’s time the industry stopped treating payment discipline as optional. This isn’t just about smoother cash flow, it’s about resilience, accountability, and long term viability.

Watch credit card payment in 1980s. Click-clack imprinter. Metal merchant plate. Raised card numbers. Carbon paper form. Slide mechanism over. Physical impression made. One transaction: 3-5 minutes. Your card details on paper. Multiple copies. Merchant keeps one. You keep one. Stored in drawers. This was "secure payment infrastructure." Most of the world lived through this. Manual imprinters. Carbon copies. Phone authorizations. The evolution: • 1950s-1980s: Click-clack machines • 1980s-2000s: Magnetic stripe, electronic terminals • 2000s-2015: Chip cards, EMV standards • 2015-2020: Contactless, NFC 2020+: QR codes, mobile wallets Each generation built on what existed before. Some countries migrated layer by layer. Each transition constrained by protecting previous investment. Others leapfrogged. Built QR-based systems without being bound by card rails. Germany still prefers cash because decades of infrastructure created habits. China built Alipay and WeChat Pay on QR codes when card penetration was low. India built UPI the same way. QR codes. Mobile-first. Instant settlement. Different starting points. Same insight: design for what payments should be, not what they used to be. Which brings me to yesterday. I posted about cashless payments not working at India's AI Impact Summit. Mixed reactions. Dr. Martha Boeckenfeld reminded me Germany still runs on 50% cash. Others pointed out how far India has come. They're right. Yesterday's failure stung because we've come so far we expect it everywhere now. From click-clack taking 5 minutes to QR code taking 5 seconds. That expectation? That's actually privilege. We forget payments used to sound like this. And forgetting how far we've come is progress. Did you ever make a payment using one of these? What do you remember about it? Or are you young enough to have never seen one?

Building a Payment Service from Scratch - What I Learned as a Founder When we started building the payment system at takeUforward, I thought it would be simple, just integrate Razorpay/Paypal and move on. But once we went deeper, it turned into a full product within a product. Payments are about reliability, data integrity, and how gracefully your system behaves under pressure. Here’s what we learned 👇 - Don’t build only for “plans”, design for plan entities in your schema so upgrades/bundles/emi’s/future standalone offerings are easier to integrate - Support multiple validity periods within the same flow. - Implement an Adapter Pattern so gateways like Razorpay, PayPal, or Stripe can be swapped without touching business logic. - Keep a transaction_id as the single source of truth and design every API around it (create, capture, refund, audit) - Log everything, and store gateway response for future auditing - Ensure idempotency for every payment and refund API - a single retry shouldn’t double charge a user - Run all external calls async using background jobs or message queues to avoid blocking the user flow - Integrate refund callbacks with GST reversal logic to maintain accurate tax credits - Implement signature validation and webhook verification to avoid spoofed callbacks - Support EMI and split payments, each transaction linked via a parent-child hierarchy - Build monitoring dashboards for transaction latency, failure rates, and P95 response times - Use feature flags to roll out new gateways or payment logic gradually - Integrate third party sales - Integrate other product sales on our platform, manage taxes for them. These things sound overkill at the start, until you hit scale and realize why systems like Stripe and Razorpay obsess over these details. 💡 Check out TUF+ - we’ve covered OOPs/LLD over there, along with everything needed for Interview Preparation. It’s your one-stop interview prep platform for DSA, LLD, Core CS and more. Use code STRIVER to get the maximum discount, valid for the next few hours only ⏰

MASTERING ACCOUNTS PAYABLE: A KEY TO FINANCIAL EFFICIENCY💡 Accounts payable (AP) is more than just paying bills it's about managing cash flow, maintaining vendor relationships, and ensuring financial accuracy. But what does this look like in real life? Let’s break it down with examples! 1. Invoice Accuracy Matters! Imagine your company orders office supplies worth $5,000. The invoice arrives, but the amount is $5,500. Without proper verification, this could lead to overpayment. A strong AP process ensures invoices are checked against purchase orders and delivery receipts before approval. 2. Vendor Relationships Build Trust A manufacturing company relies on a key supplier for raw materials. By keeping vendor details updated and ensuring timely payments, the company maintains a good relationship, leading to priority deliveries and potential discounts. 3. Payment Terms Can Save Cash A retail business negotiates a 2/10, net 30 payment term with its supplier meaning if they pay within 10 days, they get a 2% discount. By managing AP efficiently, they save thousands annually in early payment discounts! 4. Approval Workflows Prevent Fraud A company receives a suspicious invoice from an unknown vendor. Instead of processing it immediately, their AP workflow requires manager approval for new vendors. Upon review, they realize it’s a fraudulent invoice saving the company from a financial scam. 5. Efficient Payment Processing Keeps Operations Smooth A tech startup ensures its software subscriptions and office rent are paid on time through automated AP processes. This prevents service disruptions and allows the finance team to focus on strategic growth rather than chasing due payments. Final Thought A well structured accounts payable system is not just about processing payments it’s about financial control, risk management, and strategic planning. How does your organization manage AP? Any challenges or success stories to share? Let’s discuss in the comments! #AccountsPayable #Finance #BusinessGrowth #CashFlowManagement #VendorRelations #InnocentTax #InnocentAccountant #InnocentMotivated #InnocentLinkedin

In SAP, the process of managing Accounts Receivable (AR) involves several key transactions, often carried out through the SAP Financial Accounting (FI) module. Below is a list of commonly used T-codes for Accounts Receivable in SAP: 1. Posting Customer Invoices and Payments: • FB70 – Post Customer Invoice: Used to post an invoice for a customer, which updates accounts receivable and sales revenue. • F-28 – Post Incoming Payments: Used to post a payment received from a customer (could be cash or transfer). • F-32 – Clear Customer: Used to clear open customer items (like payments or credit memos). 2. Customer Account Maintenance: • FD01 – Create Customer Master Data: Allows you to create a new customer in the system. • FD02 – Change Customer Master Data: Modify existing customer data. • FD03 – Display Customer Master Data: Display customer details without making changes. 3. Credit Management: • FD32 – Change Customer Credit Management: Used to update credit limits for customers. • FD33 – Display Customer Credit Management: Display customer credit information. 4. Customer Payments and Clearing: • F-39 – Post Payment: Manual posting of customer payments. • F-44 – Clear Open Items: Clears open customer items manually, like applying a payment to a specific invoice. 5. Account Reconciliation and Aging Reports: • F.13 – Automatic Clearing: Clears open items for customers automatically. • F-30 – Post Customer Down Payment: Used to post an advance or down payment made by a customer. • FS10N – Display G/L Account Balances: Can be used to check the balance for accounts receivable (G/L 100000, for example). • S_ALR_87012168 – Customer Open Items List: Displays open customer invoices and payments. • F.22 – Customer Aging Report: Provides a list of receivables broken down by overdue periods. 6. Credit Memos and Adjustments: • FB75 – Post Customer Credit Memo: Used to post credit memos (reduce amounts due from customers). • F-27 – Post Credit Memo for Customer: Another way to post credit memo for a customer. 7. Dunning (Reminders for Outstanding Payments): • F150 – Dunning: To create and send dunning letters to customers for overdue payments. • F150B – Dunning History: Displays the dunning history for customers. 8. Reports and Analysis: • S_ALR_87012182 – Customer Receivables Aging Report: Used to analyze aging of accounts receivable. • F-23 – Post Customer Payment and Clear: This is an alternative method for handling incoming payments and clearing. These T-codes cover a broad range of Accounts Receivable functions in SAP, from basic posting and customer account management to credit control, dunning, and reporting. However, If there is anyother T-codes, feel free to share.

#Africa bleeds $5B a year not to #corruption or #mismanagement, but just to move money within its own borders. Example: A Kenyan business paying a Ugandan supplier. Instead of Nairobi → Kampala, money goes: Nairobi → USD conversion (1–2%). USD routed via New York/London ($20–50 fee). USD → Ugandan shillings (another 1–2%). By the time a $26,000 invoice is paid, $500–1,000 is gone. Whilst we may be denied visas, our money travels freely through New York. And it’s not just trade: Africa’s #diaspora sends $95B home each year, yet pays the world’s highest remittance costs. -We pay the highest cost for credit. -We pay the highest cost for payments. -We pay the highest cost to send our own money home. It’s not inefficiency. It’s design. The #GlobalFinancialSystem wasn’t built for us. The good news? Solutions exist. #PAPSS (Pan-African Payment and Settlement System) is already live linking 15 central banks, 150 commercial banks, and 14 payment switches, with the capacity to handle $300B in intra-African trade annually. Through PAPSS, that same Kenya–Uganda  transaction could  look very different: -One direct conversion from KES → UGX (0.2–0.5% spread). -Settlement netted via African central banks. -Funds received in hours, not days. Estimated cost: $60–150.  Potential savings: $500–950 on a single $26,000 payment. No detours. Value stays in Africa. The challenge isn’t invention. It’s implementation. One Africa. One market. One #payment system. AI image below*

Are Visa and Mastercard still just “𝐩𝐚𝐲𝐦𝐞𝐧𝐭 𝐧𝐞𝐭𝐰𝐨𝐫𝐤𝐬”? Or have they quietly become the world’s biggest data companies? The story is no longer about card rails alone. Visa has invested $𝟑.𝟓𝐁 𝐢𝐧𝐭𝐨 𝐀𝐈 𝐚𝐧𝐝 𝐝𝐚𝐭𝐚 𝐢𝐧𝐟𝐫𝐚𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞 over the last decade, now running more than 300 live models across fraud, credit, operations, and scoring. Its new Commercial Enhanced Data Program (CEDP) charges banks and merchants $0.05–$0.10 per enriched transaction, giving them access to behavioral data such as categories, timestamps, and location insights. Mastercard has taken a different route. Through acquisitions like Finicity and Ethoca, it built a data and consulting powerhouse. Today, it sells custom intelligence packages priced anywhere from $𝟏𝟎𝟎𝐊 𝐭𝐨 𝐦𝐨𝐫𝐞 𝐭𝐡𝐚𝐧 $𝟑𝐌 𝐚𝐧𝐧𝐮𝐚𝐥𝐥𝐲, depending on the region and the scope of insights. The results are clear. In Q3 2025, Visa reported $10.2B in revenue with cross-border and enriched data services as key drivers. Mastercard continues to grow its non-interchange business by turning analytics, fraud detection, and consulting into scalable revenue streams. The bigger picture is that these companies are no longer just the rails. They are becoming the intelligence layer of global commerce, shaping how loyalty programs are designed, how pricing strategies are built, how fraud is prevented, and how consumers are targeted. Every fintech, issuer, and platform now operates in a market where Visa and Mastercard do not just process payments. They see the data behind those payments, and they monetize it at a global scale. 👉 Do you view Visa and Mastercard as payment networks, or as intelligence companies now? Let's discuss it!

Why Local Payment Methods (LPMs) dominate in Europe and how Wero could push that even further in 2025.👇 When it comes to payments across Europe, traditional card schemes like Visa, Mastercard, and AMEX do not reign supreme in the way they do in markets like the US or UK. Instead, local payment methods (LPMs) are king. There are several very good reasons for that: 🔸 Cultural familiarity. Consumers in countries like the Netherlands, Germany, and Sweden are deeply accustomed to using local rails like iDEAL, SEPA, SOFORT, and Swish. 🔸 Trust & reliability. These LPMs are often backed by domestic banks or governments, earning a level of trust that global cards don’t always match. 🔸 Cost efficiency. For merchants, LPMs typically come with lower transaction fees than cards. 🔸 Higher conversion rates. Payment flows are optimised for local users, leading to smoother checkouts and fewer abandoned carts. _________________________ 🚀 Enter Wero – Europe’s answer for the Digital Wallet age Wero, the new pan-European digital wallet backed by the European Payments Initiative (EPI), aims to unify this fragmented landscape even further. It’s designed to offer: ✔️ Seamless account-to-account payments ✔️ Instant P2P transfers ✔️ Cross-border functionality ✔️ A real alternative to non-EU wallets like PayPal or Apple Pay If it gains real traction, Wero has the potential to strengthen European payment sovereignty and further reduce reliance on non-EU card networks. That’s a big deal for merchants, banks, and consumers alike. As a merchant looking to expand across the EU in 2025, understanding and enabling local payment methods isn’t optional, it’s essential. I for one am going to be keeping a very close eye on Wero as it rolls out further afield this year. ➡️ Where do you see Wero fitting in? ➡️ Will it gain ground or struggle to take off?