Future-Proofing Payments: Why SMBs Need Frictionless Experiences for Growth

The payments processing landscape has undergone monumental shifts in recent years, largely driven by the explosive growth of digital transactions. With consumer digital payment spending surging to nearly $50 trillion globally since 2024, small to medium-sized businesses (SMBs) face a critical choice: diversify their payment offerings or risk significant revenue loss.

As consumer payment needs expand, so does the imperative for frictionless experiences. Fragmented systems are no longer just an inconvenience; they actively hinder customer satisfaction, impede internal operations, and compromise the collection of complete, accurate data. For many businesses, overcoming this fragmentation is the key to unlocking payments-led growth.

Industry insights reveal three overarching macrotrends reshaping the payments sector:

• The undeniable demand for frictionless payment systems.
• The ongoing modernization of the point of sale.
• The strategic leveraging of data and Artificial Intelligence (AI) as a growth engine.

So, what do these trends mean for your business, and how can forward-thinking companies adapt to this rapidly evolving environment?

Embracing Unified Systems for Seamless Transactions

In today’s digital commerce and Software-as-a-Service (SaaS) driven world, customers expect swift, frictionless payment experiences. However, many SMBs and Independent Software Vendors (ISVs) struggle with this expectation due to reliance on multiple, disparate systems, outdated third-party integrations, or even manual processing. This fragmentation often leads to lost revenue.

Consider a business using one system for in-store sales, another for online transactions, and yet another for recurring invoices. Such a setup necessitates tedious, error-prone manual reconciliation. A unified payment system, by contrast, allows all components to communicate, providing a real-time overview of cash flow and a consistently smooth experience for customers. Larger enterprises frequently suffer from these fragmented environments, impacting not only operational efficiency and cost but critically, the customer journey.

Clunky checkout processes, pages branded by third parties, and lengthy forms frequently deter customers. Designing a consistent, intuitive payment experience is vital for building trust and encouraging transaction completion. To truly scale with payments in 2026, SMBs must prioritize phasing out manual, fragmented systems. By pursuing unification, businesses can eliminate unnecessary friction and data silos, delivering the seamless experience modern customers expect while eradicating reconciliation errors.

Modernizing Checkout: The Rise of Digital Wallets, Biometrics, and Omnichannel

The future of payments is undeniably digital and diverse. Digital wallets are projected to grow by 36% between 2024 and 2029, already accounting for over 80% of digital spending in 2024. Furthermore, Buy Now, Pay Later (BNPL) users are expected to exceed 900 million globally by 2027. Businesses aiming for growth and competitive edge must urgently diversify their digital payment options.

For visionary SMBs in 2026, implementing real-time payments and rapid processing should be a top priority. Crucially, this means offering customers diverse payment optionality, both in-person and online, meeting them wherever they prefer to pay.

An omnichannel environment is fundamental to the future of payments. It ensures a consistent customer experience whether they shop online, in-store, via mobile, or through social platforms. Interconnected systems enable seamless interactions, such as ordering on mobile and returning in-store. Omnichannel checkouts also facilitate the retention of customer preferences and purchase history, gathering valuable data and significantly increasing the likelihood of repeat business.

Beyond new payment methods, authentication is also evolving rapidly. Biometrics—including facial recognition and fingerprint identification—are rapidly replacing traditional chip and PIN verification. Biometrics secured over $3 trillion in payment transactions in 2025 alone. The popularity of mobile payments like Apple Pay and Samsung Pay fuels this trend, as consumers increasingly prioritize speed, convenience, and enhanced security against fraud and privacy concerns.

In this new era, customers are accustomed to effortlessly ordering products or services without manually entering credit card details or personal information. Businesses must keep pace to leverage payments-led growth. The rapid adoption of digital wallets and biometric authentication signifies a permanent shift in consumer expectations towards speed and choice. SMBs integrating these technologies into a unified system will not only bolster fraud prevention but also secure a distinct competitive advantage in an increasingly cashless economy.

Leveraging Data and Agentic AI for Strategic Growth

The year 2025 marked a significant surge in agentic AI adoption, with the global AI market valued at USD $390.91 billion in 2025 and projected to soar to $3.497 trillion by 2033. However, ISVs and merchants will only fully realize AI’s potential for business growth through unified, accurate data.

AI is inherently data-dependent, making data a strategic asset for the fintech sector. It empowers partners and merchants to enhance agility and accelerate scaling. As agentic AI transforms payment processing, its potential to revolutionize retail and online commerce through autonomous agents is immense.

Agentic commerce is poised to fundamentally alter online shopping. Marketing and commerce are likely to shift from traditional Search Engine Optimization (SEO) to agentic engine optimization and generative engine optimization. Already, over 39% of consumers—and more than half of Gen Z—utilize AI for product discovery. As agentic AI reshapes e-commerce, businesses that effectively harness payment data gain a crucial strategic asset for their growth strategies.

Payments are increasingly being redefined as a powerful growth opportunity for both ISVs and merchants. The data derived from payments provides SMBs with insights to grow their business, while embedded payments offer SaaS companies significant revenue and performance enhancements. Through AI optimization, integrated software becomes a core intelligence layer, deepening customer relationships and making businesses more scalable and efficient.

Embedded software seamlessly combines business management and payment functionalities, creating new opportunities for ISVs and merchants. To meet market demands, businesses and payment providers must evolve together, aligning their offerings and providing consumers with maximum flexibility. Furthermore, AI is now routinely employed in fraud prevention and monitoring, acting as an artificial workforce capable of flagging fraudulent transactions and streamlining complex refunds – an approach echoed by the “AI-assisted, human-approved” model.

As agentic AI redefines how consumers discover and purchase, the ability to capture unified payment data becomes a critical competitive edge. For modern merchants, the powerful combination of SaaS and AI-driven payments ensures they are not merely reacting to market shifts but are actively optimized for the future of commerce.

The Future of Embedded Finance and Strategic Partnerships

We are witnessing a transition from standalone payment systems to embedded finance, where cumbersome checkouts are evolving into a seamless, integrated customer experience. By unifying the entire commerce ecosystem, businesses eliminate data silos and outdated third-party systems that impede payments-led growth.

Merchants and SMBs poised for success will adopt strategies that blend frictionless experiences, diverse payment choices, real-time analytics, and data-driven insights. This success hinges on collaboration with modernized payment service providers and robust attribution platforms.

Looking ahead to 2026, businesses must carefully evaluate the costs and benefits of innovation within their systems, whether it involves leveraging agentic AI, diversifying accepted payment methods, or partnering with a full-stack payments provider. Thorough research is essential to understand specific needs and goals. Instead of solely focusing on cost, businesses must consider their future trajectory and the potential cost of lagging behind more innovative, agile competitors.

The modern consumer demands fast transactions and payment options tailored to their preferences. In 2026, businesses must begin optimizing for this future or risk obsolescence. Moving forward, payments should be treated as a core component of the customer experience, not merely a convenient addition. Diversifying payment options in 2026 is crucial to unlocking the full value of payment data and ensuring sustained growth.

Source: thefinancialbrand.com