In this episode of Payments Unfiltered, Theo Spyrides speaks with Natasha de Terán, author of The Payoff and former Head of Corporate Affairs at SWIFT, about the hidden complexity behind everyday transactions.
Together, they explore the frictions baked into today’s payment rails, the growing influence of regulators, and whether alternatives like CBDCs and account-to-account payments are credible challengers to the status quo.
Natasha brings a rare blend of policy insight and hands-on merchant experience to the conversation, questioning not only what’s changing in payments but also who those changes are actually for.
Video
Transcript
Theo Spyrides:
Natasha, thank you so much for joining us. To kick us off, what do you think are the biggest pain points merchants face in today’s payment system?
Natasha de Teran:
That’s an excellent question. But firstly, thank you very much for inviting me to this podcast. It’s particularly difficult to answer because you tend to see it from your own standpoint. And I’m a smaller merchant when answering this question. As a smaller merchant, I’d say yes—there’s the issue of cost—but probably the biggest thing is the delay in settlement. That can be pretty extended depending on which provider you’re using.
I’d also highlight the lack of flexibility from some payment providers. As a small merchant, you want to enable your customers to pay as easily as possible. Typically, they want to use their existing logins, which means you’re locked into paying higher fees. If I want to offer PayPal, for instance, I’m automatically required to offer “Pay in 3” on those goods. I don’t have the option to decline that. So while cost is an issue, the delayed settlement is the biggest problem, especially for growing businesses. Cash flow is absolutely king, and you want that money in fast.
But it’s not just about speed. It’s about risk. When your money arrives in your bank, it’s protected—you can spend or hold it. But when it’s locked in someone else’s system, it’s not entirely clear who you’re at risk to, nor how you’d be protected if the worst happened.
There’s an absolute lack of transparency. When choosing a payment provider, I have to consider many different variables. But when you go payment shopping, you must dig deep for the answers. You often have to sign up and hand over a lot of information before you can even find out basic things, like your settlement times or what fees you’ll pay on non-UK-issued cards. And those are critical pieces of information when deciding who to go with.
Theo Spyrides:
And you talked about flexibility. There’s been a significant rise in alternative payment methods, primarily driven by fintech innovation. So, how should merchants think about these alternatives, and can they help solve some of the issues you just mentioned?
Natasha de Teran:
They can, particularly at the smaller end of the market. There are a vast number of alternatives. Some are even built into your web provider if you’re an e-commerce merchant. But you may find that you don’t get a choice of payment provider, it’s just the one that comes bundled with your platform. You can try to integrate something else, but your inventory and payments might be disconnected, and you’d have to manage inventory manually.
A lot of innovation is happening, and I think merchants should always keep an eye on what’s changing. Better offers might emerge, but retooling your website is no small feat unless it’s extremely basic.
From a customer experience perspective, you want payments to be as easy as possible. You don’t want to lose someone at checkout because they’ve had to fill in their postcode for the third time or because they don’t want to hand over personal data. They’d rather just use their login.
What consumers often don’t realise is the impact their choice of payment method has on the merchant. The merchant has different costs depending on whether a customer uses one method over another. That lack of awareness extends beyond cost to things like consumer protection as well.
I’ve seen plenty of customers using debit cards instead of credit cards for high-value items. That’s risky for them. They’re not using the most protected method when they probably should be. So, as a merchant, I think you have some responsibility to offer methods that make sense and to ensure your customers understand them.
Theo Spyrides:
That’s a super interesting perspective; I haven’t heard many merchants talk about consumer protection in that way. There are regions where alternatives are really thriving, like PIX in Brazil or UPI in India. Why are those systems succeeding? Are they exceptions—or are they a sign of what’s to come?
Natasha de Teran:
You said they disrupted the cards, but I’d say they were never dominant in those countries. Wealthier people and tourists used cards, but most of the population didn’t. So PIX and UPI filled a gap. They moved people away from cash, and in Brazil’s case, away from post office payments.
They skipped the card-dominated phase and jumped into real-time digital systems. And governments played a significant role. In Brazil and India, the public sector made decisive moves to shape the future of payments.
In the UK, it’s more complicated. We have a system that mostly works. There are cost and competition issues, yes, but our approach to public sector involvement is different. Payments are a public good. The system is a public good. However, the providers are not necessarily operating like public goods. In Brazil and India, they’ve been treated more like public infrastructure.
So the big question is: do you need public ownership to drive and protect the public interest in payments?
Theo Spyrides:
Have you ever seen it work without regulatory or governmental involvement?
Natasha de Teran:
You do see some evidence of it working in Scandinavia. There’s still a push from the public sector, but you also see more proactive movement from the private sector. To be frank, their banks and financial institutions play nicer with each other. But can you apply what works in Denmark to the UK? I’m not so sure.
Theo Spyrides:
So, it sounds like regulators can play a positive role, but maybe not everywhere or consistently. Do merchants benefit from this regulation?
Natasha de Teran:
Yes, I think they can. Regulation has driven progress. The problem is that payments are a team sport, and this isn’t a team-playing industry.
Still, regulations have resulted in lower interchange fees, more competition among acquirers, and greater mobility in acquirer contracts. They’ve also encouraged the adoption of different payment methods.
But there are drawbacks, too. Under PSD2 in Europe, for instance, merchants can’t give preferential treatment to one payment method over another, which limits flexibility. So, while it might level the playing field, it can also bake unnecessary costs into the system. For example, when a taxi driver has to pay card fees even when the customer doesn’t need any added protection.
Theo Spyrides:
Let’s talk about CBDCs. You’re a member of the Bank of England’s CBDC Engagement Forum. Can you explain what a CBDC is and what impact it might have?
Natasha de Teran:
The honest answer is that we don’t yet know what a CBDC is. It could look very different depending on the country. The idea is that it fills a gap in the system, whether that gap exists today or might emerge in the future.
Think about it like this: PayPal enabled eBay. So what will enable the next generation of commerce? That’s what the public sector is trying to figure out. Does that require a public-sector digital instrument like a CBDC? That’s the big question.
Theo Spyrides:
Could stablecoins and private sector innovation fill that gap instead?
Natasha de Teran:
Possibly—but we have to think about who is being served. Cash is a public good. Everyone can use it. Is the same true for digital money? No. Not everyone has access. Not everyone can store or receive money digitally, especially without fees.
The people most in need—those with bad credit, those just released from prison, those without internet access—are often left out. And they end up paying more just to use money. That’s a problem the public sector has to solve. Stablecoins alone won’t do that.
Theo Spyrides:
What about privacy concerns? There’s a lot of fear around surveillance and digital currencies.
Natasha de Teran:
It’s a valid concern—but one that’s often overblown. We’re already being tracked—CCTV, smartphones, big tech. If you’re worried about state surveillance, you should focus on protecting democracy, the judiciary, and the legislature, not obsess over whether the Bank of England issues a digital pound.
Ironically, a public sector CBDC could become more private than the current options.
Theo Spyrides:
What trends do you think will reshape payments in the next decade?
Natasha de Teran:
The public-private question will become even more central. We’ve moved from a world of banks and cash to one heavily dependent on card networks and digital intermediaries. The plumbing matters more than ever.
Strategic redundancy and resilience will become big themes. If AWS went down for 48 hours, the economy would feel it. We need to think about those infrastructure layers more deeply.
Theo Spyrides:
Final question: What advice would you give businesses navigating this complex space?
Natasha de Teran:
Don’t assume you’ll solve it with five minutes on Google. It takes real work to determine what you need and what’s being offered.
Think about flexibility. Will you sell in person and online? Will you have foreign customers? What are the fees for non-UK cards? Do your platforms work together?
And consider the risks: who’s holding your money? What’s the settlement delay? Are you comfortable with that risk?
And if you’re running an e-commerce site, figure out what payment options your web platform supports before you start building.
Theo Spyrides:
Amazing. Natasha, thank you so much for your time—it’s been great speaking with you.
Natasha de Teran:
Not at all. Thank you—this has been fun.
Theo Spyrides:
That’s a wrap for this episode of Payments Unfiltered. Thanks again to Natasha for joining us. If you found this conversation valuable, please subscribe to the podcast and share it with your network. See you next time.
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