Why Smart Businesses Are Ditching the Payment Debate

Jessica Albright · 2026-10-14

For years, payments have been stuck in two lanes: horizontal platforms that serve everyone, and vertical solutions built for specific industries. But here's the thing—businesses today need both. They want the flexibility of a horizontal system and the deep specialization of a vertical one. That's where diagonal thinking comes in. ### What Exactly Is Diagonal Thinking? Diagonal thinking isn't about choosing sides. It's about blending scale and specialization so payments infrastructure can handle multiple use cases without losing depth. Think of it like a Swiss Army knife—it's not just a blade or a corkscrew; it's a whole toolkit that adapts to whatever you need. Take healthcare. A provider juggles patient payments, insurance claims, payroll, benefits, and more. Each has its own rules and quirks. In the past, that meant stitching together a patchwork of solutions. A diagonal approach brings it all under one roof while still respecting the nuances of the industry. In a recent PaymentsJournal podcast, Stephen Faust, CEO of Dash Solutions, and Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research, broke down how this works and where it's making waves. ### The Forces Driving the Shift One big accelerator? The rise of vertical software providers. According to McKinsey, vertical-specific software now accounts for over half of payments-adjacent SMB spend. But that's not the whole story. "I heard at a conference someone say, 'There's been more changes in payments in the last five years than in the 50 years before that,'" Faust said. "And it's true. Things are rapidly changing." Three key factors are pushing this evolution: - **Modern APIs**: They let companies overhaul payments without rebuilding their core systems. More businesses can now integrate directly with providers. - **Embedded finance infrastructure**: McKinsey forecasts embedded payments will grow by more than 30% annually through 2034. - **Artificial intelligence**: AI handles complexity that used to require custom builds or extra staff, making tailored payments more feasible. "AI is not only allowing payments companies to move faster and configure solutions more uniquely, but it's also letting the payers eliminate manual processes," Faust added. "That's providing more opportunity to drive efficiencies and cost savings, and a greater user experience." ### The Pain Points of Legacy Systems Legacy payment methods are a headache. Writing checks? No one wants that. But some areas—like disbursements, reimbursements, and refunds—have been tough to crack. That's where APIs and new efficiency layers come in. "Where there are greenfield opportunities and where the APIs come in are in some of these spaces that have been difficult to conquer," Hirschfield said. "Now, when you add these APIs and new efficiency layers, it's much easier versus going the old school way." The ultimate goal? Make transactions so seamless and embedded that end users can focus on their business, not payments. That's the promise of diagonal thinking—and it's already happening.