For the second successive year, I moderated a panel on modular payments at the MPE conference in Berlin. We are tracking the shift in enterprise buying behaviour for payments from taking a full stack service from a single PSP to something that increasingly looks like a mix and match set of cloud infrastructure.
Maria Parpou (EVP, Merchant Cloud, Mastercard) explained that managing payments is becoming more complex – more PSPs, more schemes, more territories, more channels and more alternative payment methods – while profit margins are declining in many retail categories. Her view was that any decision about modularity should be driven by outcomes, not architecture. For merchants, the priorities remain constant: availability, authorisation rates, and helping the business grow. Mastercard’s Merchant Cloud is one response: a composable platform offering acquiring, gateway, tokenization and fraud services under a single contract, with the flexibility to add 3rd party partners.
Chris von den Hoff (Enterprise Sales, Payrails) took this further, arguing that modular infrastructure is a prerequisite for “intelligent payments.” The real blocker today is fragmented data across multiple PSPs and legacy internal systems. Payrails positions itself as the connective layer, normalising data, enabling orchestration, and increasingly automating operational workflows like reconciliation and chargebacks. Chris explained that merchants don’t ask for modularity – they ask Payrails to help fix approval rates, reduce costs, or expand internationally.
From the merchant side, Fiennes Davy (Group Head of Payments, Kingfisher) offered a useful counterpoint. Kingfisher, despite its scale, is prioritising simplification over orchestration. With regulatory changes like PSD3 looming, the choice is often binary: take on the complexity of getting as license – especially for any merchant running a marketplace – or outsource to a smaller number of strategic partners. It’s clear that for many merchants, modularity is not an immediate priority.
The conclusion? The stack will remain mixed. Some merchants will consolidate with a single supplier that does everything. Others will opt for a set of modular services, some built in-house, others delivered from the cloud. I suspect the real battleground will be who controls the data.
