In March 2025 Stripe disclosed $1.4 trillion in 2024 total payment volume, up 38 per cent year on year, in its annual update. Stripe is no longer the only firm in the US payment-service-provider category operating at trillion-dollar scale: Adyen and Block each report large 2024 numbers, and the legacy acquirers (Fiserv, Worldpay, Global Payments) process meaningful volume across more traditional merchant relationships. A US merchant accepting cards in 2026 has more choices for who processes the payment than for who supplies the espresso machine in the same store. What they get, on top of acceptance, varies sharply.
What a US Payment Service Provider Actually Does
A payment service provider sits between a merchant and the card networks. The PSP onboards the merchant, runs underwriting and ongoing risk checks, runs the gateway that captures the customer’s card details, routes the authorisation request to the issuing bank, and remits net settlement back to the merchant’s deposit account. Some PSPs also act as the merchant acquirer, holding the regulatory relationship with the card networks directly. Others, often called payment facilitators or independent sales organisations, sit on top of a sponsor bank and wholesale that relationship to many merchants underneath them.
The economic stack is layered. Interchange goes to the issuing bank, network fees go to Visa or Mastercard, and what remains is split between the acquirer and any PSPs or value-added resellers in the stack. The US merchant pays a blended rate, but the components have different competitive dynamics. Interchange is regulated for debit but not credit. Network fees are set by the schemes. The acquirer and PSP margins are the genuinely competitive piece, and they have been compressing for years.
The Rejected $30 Billion Settlement
The largest single regulatory event for US PSPs in the 2024–2025 period was the rejection of the proposed Visa-Mastercard $30 billion antitrust settlement. The proposed deal would have reduced US credit-card interchange and given merchants more flexibility on surcharging, in exchange for releasing the card networks from the long-running US merchant antitrust litigation. On June 25, 2024 US District Judge Margo Brodie formally rejected the proposed settlement, calling the projected merchant savings “paltry” relative to the estimated annual fees merchants pay the networks. CNN’s contemporaneous coverage documents the ruling and the judge’s reasoning. The rejection sent the parties back to the table and re-opened the surcharge and interchange conversation for US retailers.
Who Is Capturing the Margin
Four broad groups captured most of the new US payments-tech margin in 2024 and 2025. The first is the scaled platforms: Stripe, Adyen, Block, and similar firms that combine acceptance, value-added services, and developer-led distribution. The second is the issuer-processor stack: Marqeta, Lithic, and Galileo continue to power most US neobanks and embedded card programmes. The third is the vertical software stack: Toast for restaurants, Mindbody for fitness, ServiceTitan for trades, Procore for construction, Shopify and similar e-commerce platforms across retail. These firms bundle payments with software, which lets them subsidise the acceptance fee from software revenue. The fourth is the payment-operations layer: Modern Treasury, Increase, Orum, and similar API platforms that let companies move money across multiple rails through a single integration.
Margin trends differ across the four groups. Card acceptance margins compressed through 2024 and 2025 as competition intensified and as the regulatory backdrop continued to push toward lower interchange. Payment operations margins held, since the API layer charges per transaction rather than per percentage. The vertical software platforms are absorbing some of the margin compression at the acceptance layer by reframing payments as a feature of their broader operating system rather than as a standalone product.
Embedded Finance and the Vertical Software Wedge
Embedded finance reshaped US PSP economics through 2024 and 2025. The wedge starts with payment acceptance and expands into instant payouts, business credit, FDIC-insured deposit accounts, payroll, and increasingly insurance. Toast Capital cash advances on top of Toast payment processing is the textbook example, with eligibility driven by the merchant’s payment history through the platform. Square does the same for the small-business customers on its product. The lifetime-value math for a vertical software platform now starts with payments and expands from there, which is the opposite of a traditional PSP whose payments-only customer has limited upside.
The implications cascade. Traditional PSPs lose merchants to vertical platforms. Vertical platforms route their payment volume through infrastructure-layer payment facilitators (Finix, Rainforest, Tilled, Stripe Connect). Infrastructure payfacs commoditise the underlying acquiring relationship. The acquiring banks move further upstream, handling the regulated piece while the application layer moves downstream into software. None of this is finished, but the direction was clear by the second half of 2025.
| Date | Event | Headline number |
|---|---|---|
| March 2024 | Visa and Mastercard reach proposed $30 billion antitrust settlement with US merchants | $30B proposed |
| June 25, 2024 | US District Judge Margo Brodie formally rejects the proposed settlement | Rejected |
| February 27, 2025 | Stripe reports $1.4 trillion in 2024 total payment volume, up 38 per cent year on year | $1.4T TPV |
Sources: CNN coverage of the settlement rejection and Stripe 2024 update.
What to Watch Through 2027
Three threads will shape US payment service providers through 2027. First, the next chapter of the merchant antitrust litigation will determine whether a successor settlement, or a renewed court fight, reshapes US credit-card interchange. The original $30 billion proposal failed because the court found the relief inadequate; subsequent proposals will have to clear that bar. Second, the steady consolidation among small and mid-tier PSPs continues, with several private equity firms running roll-up strategies across the legacy independent-sales-organisation portfolio. Third, the CFPB has signalled supervisory interest in how payfac-as-a-service vendors handle merchant onboarding compliance, and any new guidance through 2026 will shape the cost of operating the payfac model.
The interesting US PSP question for 2026 is not which provider has the lowest rate. It is whose model can absorb the next round of margin compression and still fund the software and risk investment required to stay in front of a US merchant base that has more options, and falling switching costs, than ever before.
The PSPs that figure that out first will capture the next decade. The ones that do not will become the contracting back office of someone else’s growth story.
