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Why legacy payment systems are the silent killer for 88% of companies

By Gloria Methri

January 27, 2025

  • failed payments
  • FinTech
  • Harris Poll
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Payment, Legacy Payments, Instant Payments, Card Payments, AI, FinTechAs the world shifts towards a real-time economy, businesses are finding themselves hampered by outdated payment operations. According to Modern Treasury’s State of Payments Operations 2025 report, nearly 88% of financial decision-makers in U.S. companies face significant challenges in their payment processes.

The study, conducted with Harris Poll, highlights persistent inefficiencies that create bottlenecks for companies operating in a fast-paced environment.

Payment Pain Points

Payment inefficiencies cost companies in more ways than one. Manual processes dominate, with 51% of businesses performing up to half of their payment operations by hand. These outdated practices lead to problems like:

  • Data Quality Errors: Affecting 25% of companies, these errors create audit risks and disrupt workflows.
  • Reconciliation Delays: Protracted processes slow financial closing cycles for 24% of respondents.
  • Payment Failures and Refunds: Both reported by 24% of companies, these issues erode customer trust and satisfaction.
  • Visibility Challenges: 71% of businesses find it difficult to get a clear picture of money movement across bank accounts, slowing operational decisions.

Finance teams are left spending valuable hours on manual tasks, draining resources that could be better allocated to strategic initiatives, the report stressed.

Investing in the Future

Despite these challenges, companies are making strides to modernise. Over the past 18 months, 84% have invested in improving payment infrastructure, with automation being the top priority (67%). This trend is particularly strong among software-focused businesses, where 91% have initiated upgrades.

Modernisation brings tangible benefits, including faster and more accurate reconciliation (47%), better cash flow visibility (45%), and improved customer experiences (37%). Importantly, these advancements also address long-standing inefficiencies, equipping businesses to compete in a real-time world.

The Role of AI and Instant Payments

AI is emerging as a game-changer. Nearly two-thirds (64%) of businesses already use AI in payment operations, and 95% are planning to expand their role. By automating workflows, AI promises greater efficiency and fewer errors, with 94% of respondents expressing excitement about its potential.

Instant payments, another crucial innovation, are quickly gaining traction. More than half (56%) of companies have adopted instant payment rails, with an additional 37% planning to follow suit within the year. These systems not only enhance liquidity but also enable real-time tracking and reconciliation—key to thriving in today’s economy.

“The real-time economy demands a fundamental rethink of payment operations,” says Dimitri Dadiomov, Modern Treasury CEO and co-founder. “Businesses must embrace automation and AI to eliminate inefficiencies and scale effectively.”

As Rachel Pike, COO of Modern Treasury, puts it, “Investing in modern payment infrastructure is no longer optional—it’s essential for companies looking to thrive in the fast-moving, real-time economy.”

By addressing inefficiencies today, businesses can position themselves for success tomorrow, ensuring they remain competitive as the world of payments continues to evolve.

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