ByAs fintech enters 2026, the industry confronts inflection points across technology, regulation, and customer expectations. Priority CEO Thomas Priore has guided his company through nearly a decade of evolution, from merchant acquiring to a connected commerce platform. Drawing from Priority’s Q3 2025 performance and industry forecasts, five trends emerge as critical for 2026: the maturation of embedded finance, artificial intelligence in financial operations, regulatory rebalancing, real-time payment infrastructure adoption, and cash acceleration as competitive differentiator. Priority’s preliminary 2026 guidance (high single-digit revenue growth with 75-100+ basis point gross margin expansion) validates these strategic directions.
Embedded Finance Transitions from Innovation to Infrastructure
Priority’s Q3 2025 performance validates embedded finance maturation. Priority’s Treasury Solutions segment grew 18% year-over-year to $55.7 million, with customer account balances reaching $1.6 billion (upm $900.7 million at the end of 2023). The segment’s 93.6% adjusted gross profit margin demonstrates favorable unit economics once infrastructure exists.
Priority’s record $200 million quarterly deposit growth in Q3 2025 signals market acceptance. Businesses consolidate payment processing and banking relationships on unified platforms rather than maintaining separate providers. The shift from transaction-dependent revenue to recurring streams (over 64% of Priority’s Q3 adjusted gross profit came from non-transaction sources) reflects this structural change.
Industry analysts predict continued double-digit growth in embedded finance adoption. Vertical-specific solutions (construction, healthcare, automotive) gain traction. Priority’s Dealer Merchant Services acquisition validates automotive vertical expansion, while earlier moves into payroll/benefits and construction software demonstrate systematic vertical targeting.
What changes in 2026: Embedded finance becomes baseline customer expectation rather than differentiator. Platforms without integrated financial services face customer churn pressure. Integration depth (not just presence) becomes competitive factor. Banking-as-a-service partnerships accelerate as banks seek fintech distribution.
AI’s Practical Deployment in Financial Operations
Thomas Priore articulated AI priorities during Priority’s Q3 2025 earnings call: “The thing I’m most excited about as it relates to AI is its predictive insights, and that can help drive efficiency in a business. AI can accelerate underwriting, get customers set up fast.” Being smarter in risk management protects not just Priority’s business, but also customers’ businesses, he said
Why 2026 represents an inflection point for AI in fintech:
- AI tools transition from experimental to production-ready
- Implementation costs decline while capabilities improve
- Regulatory frameworks for AI in financial services emerge
- Customer acceptance increases as use cases demonstrate value
Specific 2026 applications gaining scale include fraud detection with real-time pattern analysis across transaction networks, underwriting automation enabling faster customer onboarding with maintained risk controls, cash flow forecasting through predictive analytics optimizing working capital decisions, accounts payable intelligence identifying early payment discount opportunities, and AI-powered customer support reducing operational costs.
Infrastructure requirements include data architecture supporting AI/ML model training, cloud-native platforms enabling rapid iteration (Priority’s cloud-native stack provides this foundation), and privacy-preserving techniques for sensitive financial data.
Regulatory Environment Rebalancing Competitive Dynamics
The regulatory landscape for fintech, payments, and embedded finance continues to evolve, even if headline enforcement activity has moderated from the peak seen between 2021 and 2023. Federal banking agencies are now placing greater emphasis on consistent oversight, clearer expectations, and stronger risk-management frameworks for companies operating in partnership with sponsor banks. Rather than broad crackdowns, regulators are focusing on whether fintech partners maintain bank-level controls around onboarding, funds movement, customer protections, and ongoing monitoring.
This steady regulatory environment places a premium on providers with mature, well-tested compliance infrastructure—and this is one of Priority’s most significant competitive advantages. Priority operates with nationwide money-transmitter licensing, supports full KYC/KYB onboarding, and embeds AML, OFAC, and transaction-monitoring tools directly into its platform. These capabilities are not optional in today’s environment: they are now considered baseline requirements for software platforms, marketplaces, and fintechs that want to launch embedded payments, banking-as-a-service products or real-time disbursement offerings.
In addition, Priority’s Treasury Solutions business is built on custodial structures that follow regulator-grade standards for funds management, cash reconciliation, settlement reporting, and payment routing. These controls provide partners with a compliant architecture for faster payments—including ACH, card-based settlement, and real-time payment rails—without requiring them to navigate multi-year licensing and regulatory approval processes on their own.
Although the most visible regulatory actions in recent years have centered around digital-asset fraud and consumer-protection failures, the expectations for enterprise payments providers remain high. Regulators continue to scrutinize whether payment flows are transparent, data is adequately protected, and customer funds are handled safely. Priority’s long investment in compliance, licensing, and risk management allows it to operate with the resilience of a financial institution, giving partners confidence that their embedded finance strategies can scale without elevated regulatory risk.
Real-Time Payment Infrastructure Reaches Critical Mass
Priority added real-time payments capability in Q3 2025, enabling instant settlement supporting the company’s cash acceleration thesis. The Federal Reserve’s FedNow Service (launched 2023) reaches an adoption inflection point while The Clearing House’s RTP network expands participating institutions.
Why 2026 matters for real-time payments:
- Critical mass of financial institutions connect to instant payment rails
- Customer expectations shift from next-day to instant settlement as standard
- B2B payments (historically slower) are primed for real-time transformation
- Cross-border real-time payment corridors expand
Priority’s positioning demonstrates trend: Same-day settlement capability provides funds availability within minutes. Real-time payments integration completed Q3 2025. Cash acceleration thesis supported by instant payment infrastructure.
2026 use cases expanding rapidly include gig economy and contractor payments requiring instant disbursement, supply chain just-in-time payments reducing working capital needs, insurance claim disbursements improving customer satisfaction, and government benefits and tax refunds accelerating.
Competitive dynamics: Payment processors without real-time capabilities losing competitive bids. Speed becoming non-negotiable requirement in RFPs. Integration complexity separating platform leaders from point solutions.
Cash Acceleration Becomes Core Business Strategy
Thomas Priore has consistently emphasized that faster access to funds enables better business decisions. Priority is creating an environment where businesses gain same-day visibility into cash flow, fundamentally changing how they manage working capital.
Economic context driving 2026 urgency:
- Small businesses maintain less than 60 days working capital on average
- Many businesses express dissatisfaction with traditional bank relationships
- Interest rate environment makes cash management critical
- Inflation pressures require tighter working capital optimization
2026 cash acceleration technologies include instant settlement providing real-time access to transaction proceeds, predictive cash flow with AI-powered forecasting enabling proactive decisions, dynamic discounting through automated early payment programs capturing supplier discounts, embedded financing (Priority Capital model) providing liquidity on-demand, and supplier payment optimization reducing payment float.
Priority’s 2026 validation:
- Treasury Solutions 18% revenue growth demonstrates customer demand
- $1.6 billion deposits under administration enable working capital optimization
- Unified commerce platform connects collect, store, lend, and send functions
Defensive Verticals as 2026 Strategic Focus
Priority’s Q3 2025 results revealed merchant same-store sales softness in restaurants, construction, and wholesale trade beginning in August and accelerating through September. While Merchant Solutions moderated to 2% growth, Treasury Solutions grew 18% and Payables increased 14%, demonstrating diversification value.
Thomas Priore’s defensive vertical approach extends beyond automotive. Priority’s moves into payroll/benefits and construction software demonstrate focus on non-discretionary business services. Two-thirds of Priority’s gross profit comes from segments outside of acquiring—a deliberate strategic positioning that provides stability during economic uncertainty.
2026 will test this strategy as economic headwinds persist. Priority’s diversified platform absorbed Q3 volatility while maintaining profitability. The defensive vertical positioning enables outperformance versus payment processors heavily concentrated in discretionary spending categories.
2026 Guidance and Strategic Priorities
CFO Tim O’Leary provided preliminary 2026 expectations during Priority’s Q3 2025 earnings call: high single-digit revenue growth with 75-100+ basis points of gross margin expansion. The segment mix reflects defensive positioning—mid-single digit merchant solutions growth, low double-digit payables growth, and high teens to 20% treasury solutions growth.
Thomas Priore emphasized enterprise pipeline activation as key variable: “The upside guidance is activation of the pipeline. If it activates faster than we’ve modeled, that all falls right to the bottom line. These customers are using everything—acquiring, payables, and treasury solutions.”
Strategic priorities entering 2026 include scaling recent acquisitions (Boom Commerce, Dealer Merchant Services), geographic expansion following Canadian market entry, continued deposit growth in Treasury Solutions, partner network expansion through residual financing facility, and AI integration for predictive insights and operational efficiency.
Priority’s 18% compound annual adjusted EBITDA growth since going public in 2018 demonstrates disciplined execution of long-term vision. The defensive vertical strategy positions Priority to reward investors through economic cycles.
The five trends explored through Thomas Priore’s insights for 2026 (embedded finance maturity, practical AI deployment, regulatory evolution, real-time infrastructure, cash acceleration, and defensive vertical strategy) share common architecture: They transform financial services from discrete transactions into integrated business operations. Priority’s evolution from merchant acquirer to unified commerce platform demonstrates this shift in practice. For businesses evaluating financial infrastructure partners, these five trends provide a framework for assessing which providers are positioned for the next decade of commerce evolution.
