Disruption of payment rails

Extracted Attributes

• Definition

  The underlying infrastructure and systems that facilitate the transfer of funds between individuals, businesses and financial institutions, enabling the secure and efficient movement of money.

• Associated Risks

  Spillover participant liquidity risks, technical malfunctions or operational mistakes, legal uncertainty, and disruption of the system itself.

• Potential Impact

  Can enable new ways of doing things, changing the payments experience for customers, suppliers, employees, and business partners; affects processing costs and settlement times.

• Operational Challenges

  Financial institutions face substantial technical hurdles when transitioning, as legacy infrastructure often conflicts with modern rails.

• Mechanism of Disruption

  Introduction of new payment rails (e.g., real-time payments), migration to alternative rails (e.g., digital wallets, mobile payment apps), and leveraging technologies like AI.

• Purpose of Disruption (Advocated)

  To foster pragmatic approaches to cryptocurrency policy, specifically by legitimizing stablecoins.

Timeline

• The concept of 'Disruption of payment rails' was discussed on the All-In podcast, advocating for pragmatic cryptocurrency policy and the legitimization of stablecoins. This discussion occurred in the context of broader shifts in politics and technology, including the Trump conviction and AI competition. (Source: Related Document 1, Summary)

  2024

Criminal trial of Donald Trump in New York

The criminal trial in The People of the State of New York v. Donald J. Trump was held from April 15 to May 30, 2024. Donald Trump, the 45th, and later 47th president of the United States was charged with 34 felony counts of falsifying business records to conceal payments made to the pornographic film actress Stormy Daniels as hush money to buy her silence over a sexual encounter between them; with costs related to the transaction included, the payments totaled $420,000. The Manhattan District Attorney (DA), Alvin Bragg, accused Trump of falsifying these business records with the intent to commit other crimes. The prosecution argued that Trump's 2016 campaign sought to benefit from the payment of hush money to Daniels through Trump's former lawyer Michael Cohen, who was reimbursed via a false retainer agreement. The prosecution rested on May 20, 2024, after calling 20 witnesses. The defense argued that Trump was unaware of any allegedly unlawful scheme, that Cohen was unreliable as a witness, and that the retainer agreement between them was valid. The defense rested on May 21 after calling two witnesses. Throughout proceedings, the defense also made unsuccessful requests for the case to be delayed or dismissed, for the judge to recuse himself, and for removal to federal court. Trump was convicted on all counts on May 30, 2024, becoming the first U.S. president to be convicted of a felony. Following his victory in the 2024 United States presidential election, his sentencing was temporarily suspended. Trump was sentenced to an unconditional discharge on January 10, 2025.

Web Search Results

• MODERN PAYMENT RAILS and Impact on Good Funds ...

  Payment system risks Spillover participant liquidity risks Technical malfunctions or operational mistakes Legal uncertainty Disruption of the system itself ALTA’s research found that 29 states plus Washington, D.C., have good funds laws. A number of states—mostly around the Northeast—impose requirements on acceptable payment methods for lenders funding a mortgage loan, but not directly on escrow agents for other kinds of funds received into escrow. [...] Until the second half of the 20th century, the check collection system was the only widespread payment system. Wire transfers were relatively rare and governed almost entirely by private contract and custom. Today, things look drastically different. Payment rails are the underlying infrastructure and systems that facilitate the transfer of funds between individuals, businesses and financial institutions. They enable the secure and efficient movement of money, both domestically and [...] Additionally, the person who sent the wire has no right to claw it back except in very limited situations, such as a payment that was wired twice. The payment finality of wire transfers has some downsides, including wire fraud and error in the payment process. “If money is stolen or wired in error, it may be out the door and difficult or impossible to get back,” O’Neal said. “In addition, there are significant timing and control issues related to wires.”

• What are payment rails and how are they evolving? - Plaid

  With a variety of rails available, people and companies can choose what best meets their needs. Enter multi-rail strategies, where companies mix payment options to optimize performance. Multi-rail benefits: Redundancy: If one payment rail is experiencing an issue, companies can use another without disrupting business. Options: Having more choices for customers means more business. [...] Payment rails are the infrastructure that moves money from one party to another. All payment methods, from credit cards to Automated Clearing House (ACH) transfers, have rails. Just like tracks guide trains, payment rails manage money movement between people and businesses. [...] In static routing, when there are issues with a preconfigured path, the payment fails, meaning lost business. Dynamic algorithms assess traffic congestion, cost differences, authorization rates, and other criteria to pick the best path. Dynamic routing not only helps businesses complete more payments but also helps process them faster and with lower costs. As emerging rails gain traction, dynamic routing can help businesses navigate and benefit from a more complex payment landscape.

• Real-Time Payments: Driving Disruptive Innovation

  ### Imagine the possibilities for this new payment rail to enable new ways of doing things, changing the payments experience for customers, suppliers, employees and business partners.

• 8 Statistics Demonstrating Payment-rail Migration Trends in ...

  ## 7) Decline of card-not-present transactions by 12% amid payment rail diversification Card-not-present transactions have dropped 12% as businesses migrate toward alternative payment rails. This shift reflects growing adoption of digital wallets, mobile payment apps, and embedded payment solutions. [...] Data from 2024 and early 2025 reveals significant changes in how businesses process transactions.Payment trends show substantial growth in instant payment adoption while traditional methods decline. These shifts affect everything from processing costs to settlement times, making it essential for business leaders to understand which payment rails are gaining market share and why companies are making these transitions. [...] Payment-rail migration creates significant operational challenges while opening doors for competitive advantages. Companies face integration complexities and resource allocation decisions that directly impact their bottom line. ### Operational Challenges During Migration Financial institutions encounter substantial technical hurdles when transitioning between payment systems. Legacy infrastructure often conflicts with modern rails, requiring extensive coding and testing phases.

• Evolution & Future of Payment Rails (Visual Timeline) | J.P. Morgan

  What’s the buzz in EMEA? Wired reports Will air taxis ever take off? Wired reports The evolution of retail banking Wired reports What will be the most significant shift in credit over the coming decade? J.P. Morgan Payments Meet the developers solving some of the biggest challenges in payments J.P. Morgan Payments Fast money Wired op-ed How no-strings-attached payments are transforming philanthropy Wired EVs will disrupt the grid— but they may also save it J.P. Morgan Payments [...] Payment rails are the underlying networks and infrastructure that enable funds to get from A to B without the transfer of physical money. They ensure that when a payment is initiated by one person or institution, it is received by the intended beneficiary. From wire transfers and cards to online transactions and real-time settlement, payment rails have experienced a dramatic evolution. 3rd Century BCE1, 2 Bills of exchange [...] J.P. Morgan Payments Finance with a mission J.P. Morgan Payments Tectonic shifts WIRED REPORTS Can carbon removal make payments sustainable? J.P. Morgan Payments Tracking the evolution of payment rails Wired reports What’s the future for Western ‘super-apps’? J.P. Morgan Payments Money’s new need for speed J.P. Morgan Payments Master the art of collaboration Wired op-ed How ‘‘SoftPoS’’ is remaking the way we pay Wired op-ed