2026 Merchant Payments Trends

The cost of accepting electronic payments from consumers has long been a hot button for businesses of all sizes. It has come further into the spotlight as companies face the rising costs of delivering payment technology that is not only fast, secure, and reliable but also delights consumers as part of their transaction with the merchant. Artificial intelligence holds promise for lowering costs and driving efficiency in the future; however, currently, AI is responsible for higher costs as companies invest in training and customizing new AI tools to make them fit for purpose. SMBs have less flexibility as consumers of third-party tech, and choosing to spend less on payment features typically means deciding which features matter least to customers and leaving them off the software bill, kind of like lowering your cable bill by determining which channels you like less than others. 

Another school of thought is to pass the cost of payments along to consumers by adding a surcharge to the bill or by employing a fuel-station-style pricing strategy known as cash discounting. Logically, merchants argue that consumers reaping large loyalty rewards from their credit cards are driving up the cost of card acceptance for merchants and should therefore pay that freight. As consumers become more aware of these practices, they are actively avoiding them. 

The idea of embedded payments is spooling up competition among banks, fintechs, and merchants as consumers decide whether to use digital wallets, shopping services, and stored payment credentials with merchants that make shopping seamless on those sites. Banks risk losing brand visibility as their payment cards are stored as data in wallets powered by a fintech, and merchants lose the ability to build relationships with customers when they shop with autofill wallets like Paze and ShopPay. Like AI, the efficiency of embedded payments will ultimately reduce costs in the long term but incur higher costs in the short term as bets are placed and the table is swept periodically.