Domestic Switches Must Go from Utility to Platform to Access More Revenue 

For most of their history, domestic payment switches were judged on a narrow basis: how reliably and how cheaply they moved a transaction. That measure no longer captures what a switch is used for. 

Across emerging and developed markets alike, from South Africa’s PayShap (operated by PayInc) to Brazil’s PIX and Singapore’s FAST, switching is being reclassified. Gone are the days of switching being simply the plumbing, it’s now a strategic national digital infrastructure. 

Global schemes and well-capitalised fintechs are competing for the same volume that domestic operators once held by default. 

Modernisation costs keep rising and against all of that, the strategic expectations placed on national payment infrastructure are growing, not shrinking. The question facing every domestic switch operator now, is no longer how to protect declining fee pools, but what comes next. 

From Processor to Platform 

A processor moves a transaction from one party to another and charges for the leg. A platform does more, hosting the services that sit around the transaction, such as tokenisation, fraud signal, identity, and overlay payments, and earning from them. That is the difference between a switch that clears volume and one that builds revenue around it. Margin compression is a clear symptom of a changing payments landscape, but locating the issue is not simple. 

For decades, the economic logic of a domestic switch was simple: 

• route transactions 
• charge a fee per leg 
• invest in resilience 
• reinvest into the system 

There used to be a relatively stable mix of card-present, card-not-present, and account-to-account volume. Operators could also count on a regulatory environment that treated the switch as a closed national utility. 

Operators can no longer assume the switch behaves as a closed national utility, for three reasons. 

The first is real-time payments. Rails such as PayShap in South Africa, PIX in Brazil, UPI in India, and FAST in Singapore have moved a meaningful share of volume off card. Because these rails are built to run at very low cost, they take the associated fee income with them as they take share. 

The second is competition for the customer relationship. Global schemes and digital wallets now compete for the customer and the transaction around them. The margin has migrated from the rail to the overlay, following tokenisation, dispute services, loyalty, fraud signal, and identity. 

The third is payment sovereignty. Geopolitics has put domestic payment infrastructure on the agenda of finance ministries and central banks, as governments consider what would happen to domestic payments if cross-border rails were constrained. 

The challenge is not, that the old business model is shrinkingit is that the role of the switch is being redefined, and the commercial model has not caught up. 

New Monetisation Pathways 

There are more than 90 domestic card schemes globally, with major examples including RuPay, Elo, Mir, and Shetab. These schemes are projected to reach approximately 2.1 billion cards and around 7.5% global market share by 2027. Proactive switches are unearthing new revenue and have started operating like platforms,  this shift changes what the switch sells, who it sells to, and how it invests. 

National ITMX in Thailand runs PromptPay, alongside services that extend well past clearing. In Saudi Arabia, Saudi Payments has built mada into something closer to a national digital commerce backbone than a card switch. 

Across these markets, three platform-era opportunities are now being put to use: 

1. Overlay and value-added services 

Value added services such as Request to Pay, proxy directories, QR interoperability, token lifecycle management, fraud orchestration, identity verification, and digital credential issuance have moved beyond simply being features, and they have become monetisable services that ride on the trust and reach  of the switch. 

In markets where the switch has not built these, the gap is being filled by global schemes and fintechs, with the revenue  leaving the country. 

2. Switching-as-a-service and shared infrastructure 

Smaller banks, neobanks, and mutuals do not want to build issuing, acquiring, or scheme-integration capability from scratch. A domestic switch with a modern infrastructure layer can offer scheme integration, token services, and real-time provisioning as a service, on commercial terms. 

This shifts the switch from a transaction utility to a B2B infrastructure provider. It’s a different margin profile and a different relationship with its customers. 

3. Cross-border and regional interoperability 

Project Nexus, the Pan-African Payment and Settlement System, and the bilateral linkages between PayNow, PromptPay, UPI, and DuitNow are early examples of architecture in a world where domestic schemes connect directly, without routing through global card networks for every cross-border leg. 

The switches that build interoperability capability now will be the ones that monetise the corridors later. 

Three Strategic Models, Three Revenue Logics 

Not every domestic switch starts from the same position. The commercial path forward depends on which of three models the operator most looks like. 

1. The pure clearing utility 

The operator whose only mandate is national settlement, and whose governance treats commercial expansion with caution, has the narrowest commercial aperture but the deepest strategic relevance. 

Its monetisation pathway runs through services that the central bank and member banks will accept as natural extensions of its mandate such as directory services, fraud signal sharing, identity, and resilience-as-a-service. 

The discipline here is to expand carefully, in step with regulators, without compromising the trust position. 

2. The domestic card scheme operator 

Domestic card schemes face a different problem. They are competing directly with global schemes for issuer commitment, merchant acceptance, and consumer top-of-wallet. 

Their revenue future depends on overlay services that global schemes have monetised at scale: 

• tokenisation for wallet provisioning 
• cardholder authentication 
• dispute and chargeback orchestration 
• digital identity 

The strategic question is whether to build, partner, or acquire. 

3. The integrated payment infrastructure operator 

This format is increasingly common, often the result of consolidation or mandate expansion. It runs both card scheme and instant payment rails, with overlay services across both. This is the model with the broadest revenue surface, and the highest architectural demands. 

It is also the model that most clearly resembles what regulators are now asking domestic infrastructure to become, which is a single, sovereign, modular platform that supports multiple rails, multiple ecosystems, and multiple commercial relationships without losing the resilience profile of a national utility. 

The pivot demands changes in capability, architecture, and orchestration.  

Whichever model an operator most resembles, the direction of travel is the same. The switch is moving from a cost centre measured on throughput to a platform measured on the services and revenue it can support, without giving up the resilience a national utility is built on. 

The operators that treat this as an infrastructure decision now, rather than a marketing one later, will be the ones that hold the volume and earn from what sits around it.