Payments used to be a distinct step in a transaction. Increasingly, they’re just another feature of the software people already use.
As payment capabilities have become embedded in everything from point-of-sale systems to ERP platforms and digital wallets, they’ve faded into the background while enabling entirely new business models—from self-service checkout and subscriptions to, potentially, AI agents making purchases on behalf of consumers.
Where does payment software go from here? In the How Software Makes Merchant Payments Quietly Simple, Secure and Advanced report, Don Apgar, Director of Merchant Payments at Javelin Strategy & Research, examines how software has changed payments for merchants and customers—and where the next opportunities lie.
A Long Tail
The shift didn’t happen overnight. For decades, payment software has steadily expanded beyond the checkout counter, evolving from systems that simply connected payment terminals to point-of-sale software into technology that’s woven throughout the buying experience. Today, consumers rely on payment software every day, often without realizing it. Saving a credit card in Chrome so it automatically populates payment details at checkout is one small example of how software has made payment feel almost invisible.
A software layer has been building around payments, with more of the transaction experience continuing to move into software.
“Software around payments was big news 25 years ago,” Apgar said. “Twenty years ago, we started to think of it as a solved problem. If you put a drop of ink on a piece of paper, it spreads fast in the beginning, but then it takes a long time to get that last bit out to the edges. After all these years, we’re now starting to color in the smaller spaces where software hasn’t been.
“Adoption has a really long tail,” he said. :Will we ever get to 100%? Nothing ever gets to 100%.”
Spreading Throughout B2B Payments
One area where payment software still has room to grow is B2B payments. Supplier enablement has long been an obstacle for companies looking to adopt purchasing card programs. After all, employees can’t use purchasing cards if their suppliers don’t accept card payments.
In some cases, the size of an enterprise has created enough inertia to slow the migration of payments to software platforms. Even a $50 million company that sells janitorial supplies may still have a single assistant managing payments for the entire business.
“The people that wrote software for those types of companies never contemplated credit card payments,” Apgar said. “The bigger problem for a company like that is having somebody in accounts receivable with a credit card terminal on their desk taking the payments either by phone or e-mail, and then manually updating the CRM with the payment detail.”
Companies such as SAP, Oracle, and NetSuite have now incorporated card payment capabilities, allowing businesses to set up websites where customers can pay invoices online. That has reduced both the direct and indirect costs of accepting card payments while laying the foundation for suppliers to expand into e-commerce.
Software in the Public Sector
Another area where software has steadily shaped payments is public transit. Transportation systems in cities like New York evolved from tokens to swipe cards and have now largely transitioned to tap-to-pay systems, providing benefits to commuters that extend beyond simple convenience.
“When you look at the cost to process payments, there’s the percentage of the sale that’s interchange, and there’s also a per item fee,” said Apgar. “One of the reasons behind buying a OMNY card in New York is that I’m going to pay $100 on my credit card and get a prepaid card with a swipe that I use a fare at a time.
“The software now is a lot better that they’re using at the turnstile,” he said. “If I ride the subway four times today, the software knows to recognize my card, groups those four transactions together, and bills me as one transaction for four rides. So instead of four $3 transactions, they’re billing me one $12 transaction.”
There are similar stories throughout the public sector, where payment modernization often moves at a slower pace because agencies must remain accountable to taxpayers. A private business that wants to upgrade its payment systems can often move quickly. The same upgrade at a public sector agency generally takes much longer because every investment requires transparency and careful stewardship of public funds.
“As some of these slower cycle things come up to speed, payments are becoming easier because more software is being implemented to handle it,” said Apgar. “For years the DMV was a laggard. Now I can go online, type in my plate number and my credit card number, and they mail me my renewal.”
Adapting to the Future
Payments software continues to become more efficient and capable, creating new systems that benefit both businesses and consumers. One of the clearest examples is subscriptions, which are far more prevalent today than they were a decade ago.
Now the industry is looking ahead to agentic commerce, where software not only handles the payment but also makes the purchase itself. In this model, software becomes even more deeply integrated into the transaction while taking an active role in the activities surrounding the payment.
As software improves, it allows payments to run with less active involvement from both merchants and consumers. It’s not a one-time transformation—it’s a process of continual upgrades.
“If you were one of the first guys to roll out payment software 20 years ago, some of those workflows are outdated,” said Apgar. “It’s like Windows 95—just because you adopted Windows 20 years ago doesn’t mean you’re using the same version of Windows today. So there is still room for improvement in a lot of the software that’s in use in every category.”
“As payments become more sophisticated, they’re blending into the background,” he said. “That’s what I call the payments paradox. As customers become more aware of how they’re paying, payments are at the same time becoming less visible.”