Thermohaline Payments

30 Jul 2025

(**Thermohaline circulation shifts** → changes in deep currents driven by temperature (thermo) and salinity (haline))

tl:dr

1. Explicit: There’s a lot going on in the unseen layers of Payments
2. Implicit: It’s changing and so will competition
3. Tacit: Learn how navigate

Intro and Warning:

I’ve been doing more work on AI and Product. Post that, and including a few discussions, I’ve seen some Payments companies and banks I’ve work/ed with using Gen AI for fraud detection, routing optimisation, and compliance. Also I thought more about the end of inertia as a business model in financial services (linked in the AI x Product piece) - think loyalty points, non/low-interest bearing deposits etc. - so it seemed it might be time to deep-dive (sic.) further into the sea of payments.

1. Payments are driven by the invisible currents in the sea

Okay, the iceberg metaphor needs to degrade a bit (due to AI induced warming perhaps?) but it still holds insofar as the difference between the surface (ie what the customer sees) and the submerged infrastructure. However, We’re no longer talking just about heavy “infrastructure” - the physical rails and high volume hard tech processes often laid down decades ago. What’s emerging now is more subtle: deep currents powered by software and AI. They don’t just move money physically. They move it intelligently.

Here’s a few items from the ever gushing stream of payments news:

• Samsung Wallet BNPL: installments embedded directly in-store, powered by hidden credit and risk layers (via Android Central).

• X Money with Visa: payments stitched into social conversations, wallet funding and instant payouts behind the scenes (via Reuters).

• Wero rollout in Europe: sovereignty encoded into a pan-European wallet, invisible to users but reshaping the pipes of commerce (via BNP Paribas).

2. What’s going on down there?…

Thought about in this way, competition no longer lives only on the surface of apps (once were icebergs - if that’s not clear from the previous metaphor (－‸ლ) see NB below). It’s now increasingly living in the currents.

• Whose fraud AI approves more transactions, more safely?

• Whose orchestration engines optimise routing and lower costs?

• Whose credit and loyalty flows are seamlessly embedded in the payment?

Generative AI is now being deployed in these currents - automating reconciliation, risk monitoring, and compliance like KYC (Know Your Customer - a crucial process that financial institutions and other regulated businesses use to verify the identity of their clients.) (via ThoughtWorks).

So there’s some choreography needed.

3. The Economics of Navigation

To a large extent on the surface, payments are about speed and convenience and always have been.

But there are of course, economics written deeper:

• Costs flow from which rail carries the transaction.

• Trust comes from fraud engines and liability guarantees no customer ever sees.

• Loyalty can be redefined when AI agents optimise on a user’s behalf, switching cards or rails based on hidden performance logic.

Like in product management above, the potential shift is clear: from AI as acceleration to AI as autonomy. AI (yet again…) can mean that what’s down here are potentially actors, not just accelerators.

Navigation will decide where money can go.

The winners won’t just be those mastering the customer experience and the ‘below-the-surface’ of payments, they’ll be those who have also navigated the potentially AI changing currents like:

• Safer fraud layers.

• Smarter orchestration.

• Transparent, machine-readable products discoverable by AI agents.

• Currents that convert invisible flows into visible value for merchants and consumers alike.

Icebergs after all, ride on something and it’s these currents that decide where money can go.

N.B. For reference, I’ve also decided to officially retire this metaphor (I should probably stop using them at all - a digital descriptive detox sounds good? At least there was only one cheesy meme…)