Meet the Scariest Words in Billing & Payments: Legacy Systems

I recently had the pleasure of joining PYMNTS for a wide-ranging interview on the rapid transformation of AI from large language models to agentic enablers of commerce. From a larger perspective, the pronounced shift in AI’s role is emblematic of the innovation and pace of change we’re currently experiencing within the billing and payment space.

AI may be a catalyst for change, but it’s far from the only breakthrough influencing our space. As someone who is dedicated to strategy and innovation, I see a world of untapped potential in terms of the billing and payment experience so many service providers offer their customers. So it comes to me as no surprise that in our Service Commerce Performance Gap report, 70% of service providers cite legacy systems as the #1 barrier to improving the billing and payment experience.

What blocks better billing

Share of providers citing each barrier to improving their billing capabilities.

1. Legacy systems 70%
2. Competing priorities 61%
3. Data limitations 60%
4. Budget constraints 53%
5. Regulatory and compliance 52%
6. Vendor or processor limits 41%
7. Organizational silos 35%
8. Lack of incentive 31%

0% 10% 20% 30% 40% 50% 60% 70%

What Are the Hidden Costs of Inertia in Billing and Payments?

There’s an interesting contrast at play for many billers and their billing and payments experience. On one hand, billing and payments is considered so vital that any risk of disruption to an existing system is considered a non-starter.

On the other hand, billing and payments is seen as something of a secondary consideration that is more of a back-room function than a frontline business driver.

There’s a certain safety and comfort in what you know. Continuity ensures predictability. Achieving consistency in cash flow and performance is an understandable goal—at least, it was. My biggest takeaway from the Service Commerce Performance Gap is that legacy systems are the genesis of every gap and friction point within a bad billing and payment experience.

How Legacy Systems Impact the Billing and Payment Experience

As stated in the report, legacy systems are the ceiling everyone runs into—and it’s the one that impacts every other aspect of the experience. While competing priorities (61%), data limitations (60%), and budget constraints (53%) all play a role in stifling innovation according to respondents, only legacy systems actively influence the literal touchpoints between consumer and service provider.

Examples of the most common billing system challenges identified in the report include:

• Limited control over payment timing
• Lack of self-serve capabilities
• Clunky authentication processes
• Lack of real-time capabilities
• Time-consuming processes

The friction providers miss

Share of consumers experiencing each billing pain point sometimes or very often.

1. Limited control over payment timing 40%
2. Had to contact support to fix a problem 40%
3. Payment felt time-consuming or frustrating 34%
4. Authentication process is clunky 34%
5. Trouble understanding a bill or charges 33%
6. Charged unexpected fees 32%
7. Felt unsure whether the payment was successfully completed 31%
8. Processing delays 31%
9. Late fee due to payment issues 28%
10. Redirected to unfamiliar solution 28%
11. Difficult to find or access bill 26%
12. Delayed payment until dispute resolved 26%
13. Payment felt insecure or risky 24%

0% 10% 20% 30% 40%

Each of these is a symptom of a larger issue that is fixable in a number of ways. For instance, a clunky authentication process sets the tone for the rest of the experience. And yet, AI has the ability to deliver a persistent identity layer that connects authenticated customers with accounts, policies, credentials, and permissions. A solution such as BillWallet® delivers a single secure ID that works across any payment channel. These are viable answers to an issue plaguing 34% of consumers.

The challenge is not in identifying solutions, it’s creating the groundwork that allows for these solutions to be enabled. Legacy systems are incompatible with this type of technological development.

Payments Modernization Without Overhaul: How Today's Integration Capabilities Eliminate Risk

Implementations today are far different than they were just a few years ago. Thanks to advances in technology, much of the complexity is removed with Paymentus handling the heavy lifting of integrations and orchestrations along with several deployment options.

As I shared with PYMNTS, AI is also a powerful integration tool. Future-ready firms are already using AI to interpret schemas, map information, and connect workflows across disparate systems—all without replacing underlying systems of record.

The upshot to all of this is that the capabilities necessary to deliver a Service Commerce experience are in-built and accessible from the start. A modern solution is built for today’s customers and service providers, with the ability to flex and scale as needed.

We’re entering an unprecedented age of automation, but it can only do so much in the face of fragmentation and legacy limitations. The frictions found within the current billing and payment ecosystem can only be solved by looking forward.

Access the full 2026 Service Commerce Performance Gap report today to learn more about the hidden frictions impacting today’s billing and payment experience. You can also view Chris’ full interview here.