By W.B. King
Born between 1997 and 2012, Gen Z’s perception and use of digital payment channels—from business to business (B2B) to peer to peer (P2P)—should be top of mind for senior leadership at all financial institutions (FIs), explained Deepak Gupta, executive vice president of demand fulfillment at Volante Technologies.
“Gen Z, the largest and fastest-growing demographic in the workforce, is profoundly reshaping the payments industry with their expectations for seamless, digital-first experiences,” Gupta told Finopotamus.
“Unlike previous generations, Gen Z has grown up in a world where instant gratification is the norm, whether via social media, e-commerce, or peer-to-peer payment platforms like Venmo and Zelle,” he continued. “These experiences shape their expectations for payments in both personal and professional settings.”
The Jersey City, N.J.-based Volante Technologies is a payments modernization partner for FIs. The fintech offers real-time ready, application program interface (API) enabled ISO 20022 (a standard for electronic data interchange between FIs) fluent solutions, which power four of the top five global corporate banks, industry leading card networks as well as 66% of U.S. commercial deposits.
A U.S. Faster Payments Council Board Advisory Group member, prior to joining Volante Technologies, Gupta has had an extensive career as an innovator in cloud and software-as-a-service (SasS). Prior posts include general manager at CoreLogic, president and CEO at Workstream, and CEO at iSpheres. He was also senior vice president and general manager of Peoplesoft’s and chief architect of Oracle’s SaaS business units, where he led the organizations’ transformation from on-premise enterprise software providers to SaaS.
Swift Market Shift
Instant payments evolution is still new territory, explained Gupta, adding that only a few years ago many businesses still relied on outdated, slow and paper-based payment processes.
“Today, there’s a marked shift toward digital and real-time payment capabilities. One of the most important drivers of this transformation is the demand for instant payments, facilitated by networks like The Clearing House's RTP (Real-Time Payments) and the recently launched FedNow service,” he noted. “These platforms enable real-time, 24x7 transaction processing, drastically reducing settlement times and improving business cash flow management.”
ISO 20022, along with the Society for Worldwide Interbank Financial Telecommunication (SWIFT), has also accelerated this evolution, Gupta noted.
“SWIFT and ISO 20022 are critical to this modernization. ISO 20022 is becoming the global standard for financial messaging, allowing businesses to attach richer data to payments and facilitating better compliance, fraud prevention, and operational efficiencies,” Gupta said.
“For example, ISO 20022's enriched data capabilities offer more transparent and accurate transaction details, which improve reconciliation and reduce manual intervention.”
These updates led to FIs streamlining digital banking operations, reducing costs, and providing faster, more secure, and more efficient payment solutions, all of which cater to a younger banking mindset.
“Gen Z expects the same level of speed and convenience with B2B payments that they get from their consumer payment experiences. They are pushing businesses to adopt real-time payment systems, intuitive user interfaces, and mobile-first solutions,” Gupta told Finopotamus. “This generation is also more likely to demand transparency and data-rich payment services that allow them to track and manage payments more effectively.”
And Gen Z aren’t only social media influencers promoting skin creams, burger joints and the like—they’re also impacting B2B payments, P2P payments, subscription services, and embedded finance where payments are integrated seamlessly into broader customer experiences, Gupta explained.
"In areas like e-commerce or rideshare apps, Gen Z prefers payments that happen in the background with minimal friction,” he said. “This means that financial institutions and fintech companies must prioritize delivering seamless, always-available payment services if they want to capture and retain this demographic.”
Pay as You Grow
Gupta said many FIs, including credit unions, are doing their best to keep pace with Gen Z banking demands, thus building stronger relationships with account holders. And while he feels these FIs generally understand the importance of proving digital-first, real-time banking experiences, service gaps exist.
“There are areas where they may be falling behind, particularly when it comes to the needs and expectations of Gen Z. This generation values speed, convenience, and 24x7 availability, and they are used to digital-native experiences,” he said. “Some credit unions have been slower in adopting real-time payment networks, such as FedNow or The Clearing House’s RTP, which could be a disadvantage in attracting younger members who expect instant, seamless payment experiences.”
To meet Gen Z’s digital banking wants and needs, he suggested that credit unions modernize existing payment offerings, which ensures that they can continue to deliver the same convenience, speed and personalization that this generation experiences with digital-native services like Venmo or Apple Pay.
Among platforms to assist in this goal is payments as a service (PaaS) solutions that allow FIs to offer scalability, flexibility and cost efficiency without significant capital expenditures on hardware or proprietary systems, Gupta said. PaaS providers, he added, handle the “heavy lifting of compliance updates,” such as ISO 20022 migration and real-time payment integration, which reduces the burden on in-house teams.
“They can use cloud-based infrastructure to provide faster and more secure payment services. This ‘pay-as-you-grow’ model is especially beneficial for FIs that want to scale their payment capabilities in response to market demand without the overhead of managing complex systems in-house,” he continued. “PaaS enables FIs to keep pace with regulatory requirements and technological advancements without constantly overhauling their systems.”
As the demand for instant payments and cross-border capabilities grows, Gupta said FIs using a PaaS can respond to market needs faster than those relying on legacy systems. “PaaS also enables them to offer enhanced security features, including fraud detection and compliance tools, which are increasingly critical in today’s payments landscape.”
Engaging Stakeholders
When Finopotamus asked Gupta what are some best first steps to determining the need for a PaaS solution, he offered the following:
Thoroughly assessing your current payment systems and identifying gaps or inefficiencies.
Determine what the FIs primary pain points are—is it the lack of real-time payment capabilities?
Is there a need for better cross-border payment integration or compliance with new standards like ISO 20022?
Research potential PaaS providers, ensuring they align with the institution's goals and regulatory requirements.
“It’s also crucial to consider how the PaaS solution will integrate with existing infrastructure and whether it can support future growth,” he noted. “Engaging stakeholders from multiple departments, including IT, compliance, and operations, can help ensure that the solution selected will meet all the organization's needs.”
In most cases, implementation timelines vary, so Gupta said it is difficult to give a “one size fits all answer,” but added that with modern PaaS offerings, onboarding length depends more on the FI’s testing and account holder training requirements, and the scope of the adoption.
“For example, whether it is just one real-time payment network, or both FedNow and RTP plus ACH and wire,” he continued. “From a purely technical perspective, PaaS can be up and running in as short a time as a few weeks, with standardized core integrations.”
From a technical perspective, PaaS implementation is not a heavy lift as FIs usually do not require extensive technical resources to implement PaaS. Providers, Gupta explained, take care of the technical infrastructure and the integration with existing systems, particularly core platforms.
“The complexity of the lift is generally driven more by business considerations—how to roll out the new services to customers, how to price them, how to train internal staff, et cetera,” he said. “PaaS platforms vary considerably in their ‘plug and playability,’ so FIs need to do their diligence when selecting one. Some common considerations include: Is the provider truly cloud-native, or is their offering a legacy system with surface level modernity? How quickly can the provider enable access to new payment types?”
Security is another critical issue. To this end, he said FIs should seek out PaaS providers with security certifications in information security management system (ISMS) like SOC1, SOC2, ISO 2700:2013 and Payment Card Industry Data Security Standard (PCI DSS), which helps reduce the FI’s regulatory compliance efforts.
Meeting Evolving Expectations
Look forward to 2025 and beyond, Gupta said Gen Z will continue “to drive significant changes in the payments ecosystem.” Gen Z’s influence, he added, will lead to an increased focus on digital-first, mobile payment platforms that offer transparency, convenience and personalization.
“This will impact both B2B and P2P payment services, as FIs will need to offer always-on, real-time payment options across various touchpoints. Millennials and even Gen X will adopt these new payment technologies as they see the benefits and convenience that Gen Z demands,” he continued. “Real-time payments will become the norm across all business sectors, from payroll disbursements to supplier payments, as businesses recognize the efficiency and cash flow improvements that come with faster transactions.”
Those FIs that cater to these demands will remain competitive, Gupta told Finopotamus. “While those that resist modernization risk falling behind both traditional competitors and non-bank fintechs that are better equipped to meet these evolving expectations.”