How flexible repayment and new infrastructure are redefining bank competition.
The Thredd team
Consumer expectations around credit are changing at the point of payment. In a recent PYMNTS discussion, Karen Webster, CEO of PYMNTS, and Jim McCarthy, CEO of Thredd, explored why banks must rethink how credit is delivered and how quickly expectations are evolving.
Fixed billing cycles and static credit lines are no longer enough. Consumers now expect choice and flexibility when they pay, whether that means instalments, short-term credit or dynamic repayment options built into familiar payment experiences.
FinTechs and neobanks have set this standard by designing credit journeys that feel simple and responsive. Traditional banks, particularly smaller institutions, face growing pressure to match these experiences while operating on infrastructure that was never designed for real-time flexibility.
Debit has emerged as the foundation for modern credit innovation. When combined with income visibility, tokenisation and virtual credentials, a single debit account can support multiple repayment options without changing how consumers pay.
This approach allows banks to evolve credit capabilities within existing customer relationships rather than pushing users toward separate products or providers.
Delivering flexible credit at scale is less about new products and more about modern issuing and processing capabilities. Many banks struggle with internal silos across debit, credit and risk, making even small changes difficult to implement.
Sidecar models are increasingly seen as a practical way forward, allowing banks to launch new capabilities alongside legacy systems rather than waiting for core replacements.
Agentic AI and embedded credit models are accelerating change further. Credit is becoming programmable, contextual and integrated directly into payment flows.
Banks that move quickly can remain primary providers in their customers’ financial lives. Those that wait risk falling behind as expectations continue to rise.
Read the full conversation on PYMNTS.com for deeper insight into what this shift means for banks and credit providers.
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