Six common pitfalls of payments integration and how to avoid them

Growing companies need secure and efficient ways to transfer money from customers to businesses, but many struggle with setting up these payment systems. Early mistakes, like neglecting compliance, can lead to slowed growth and regulatory issues. But designing your payment system well from the start can boost customer satisfaction and streamline operations. Compliance is more than a formality — it’s fundamental to a strong, lasting business.

Adam Goller, EVP, Head of Fintech Banking at Cross River, JoelMcCormick, who leads Cross River Operating System’s (COS) engineering group, and Ben Krefting, Cross River’s chief customer success officer, provide insights into common payments integration pitfalls and how to avoid them.

Pitfall 1: Overlooking compliance from the start

It’s common for fintech startups to neglect the compliance aspects of financial technology integrations. “Typically, the focus early on is the technology,” Goller said. “A big part of our job is to explain, yes, we’ve got the technology, but it’s also that the compliance components, specifically BSA (Bank Secrecy Act) and AML (Anti-Money Laundering), can’t be overlooked.”

Early-stage startups especially need to be aware of the importance of compliance; many dismiss it or under-invest in it. Krefting suggests viewing compliance not as a burden, but as an opportunity to dive deeper into your business: “When you’re new, you are probably not a payments expert. You will probably need a partner with a strong understanding of compliance,” he said. Partnering with an experienced bank can help fintechs develop the necessary compliance infrastructure from the beginning.

Fintechs must strike a balance between scaling quickly and implementing effective compliance frameworks. “These companies need to partner with compliance teams early to ensure they capture the right data and prevent issues later,” McCormick said. “Failing to gather key data can lead to holds by BSA/AML teams for weeks or even months. Ultimately, it comes down to meeting the regulator’s conditions.”

Additionally, it’s important to choose a bank partner that offers the necessary education — more foundational knowledge can help reduce discovery time. For example, Cross River’s developer portal offers detailed resources on payment integration complexities.

Pitfall 2: Failing to build scalable infrastructure

Critical components of scalable infrastructure include automated transaction monitoring, customer onboarding processes with KYC/KYB (Know Your Customer/Know Your Business), and secure APIs for data collection. A common mistake is building systems without considering future scalability. “There was a large client who set up their own customer onboarding flow with the bare minimum requirements,” Goller said. “As their customers and business grew, they realized they needed to add enhanced due diligence and collect more information from their customers.” But the retrofitted due diligence led to operational problems and delays due to incomplete data and regulatory requirements; a case for fintechs to collect comprehensive customer data from the start. While it may seem like extra work initially, it saves time and resources later. Krefting agrees: “If you don’t build your app by starting to collect this information, you’re going to have to go and update your user’s experience or flows later on.”

McCormick recommends event-driven architecture and loosely coupled systems that can operate independently. He also suggests storing data locally when possible and using webhooks for efficient updates. This approach allows fintechs to handle different payment life cycles — such as ACH (Automated Clearing House) versus instant payments — without compromising scalability or security. Avoid “building [technology] extremely tightly coupled with the expectations that everything operates the same,” McCormick said. Fintechs must design their technical architecture with compliance in mind to scale securely.

Pitfall 3: Viewing different payments systems as the same

Integrating with banks can be a challenge. Financial technology companies often need to pay more attention to the complexity of different payment systems like ACH, RTP (Real-Time Payments), and wire transfers. Each system comes with unique risks, particularly around fraud and money laundering. If you don’t understand product-specific requirements, you could find yourself dealing with issues like chargebacks and disputes.

These companies will also benefit from understanding that payment systems are asynchronous. According to McCormick, partners sometimes expect instant results for all transactions, not accounting for the fact that ACH can take as long as three days.

Pitfall 4: Viewing compliance as a barrier to growth

Fintechs should shift their mindset and embrace compliance as a way to scale successfully. “So many fintechs focus on investing in things that will generate revenue,” Goller said. “But they sometimes miss the connection between investing in compliance and how that correlates to revenue growth.”

Compliance is about avoiding penalties, yes, but it’s also about building trust with customers, partners, and investors. Krefting suggests seeing compliance as an investment for the long term: “Having compliance will enable you to scale your product and engage in financial institution transactions.” A long-term view can also help you save time and money as regulations evolve. Features like subledgers — which have been built into Cross River’s Operating System from the beginning — were once optional but now may become regulatory requirements.

Pitfall 5: Neglecting AML best practices

Establishing best practices for AML early on is key. A strong BSA/AML program includes a qualified AML officer, automated transaction monitoring, and robust customer due diligence. Fintechs can stay agile while maintaining AML protocols by adopting flexible, event-driven architectures that allow for parallel processing of compliance checks. Cross River’s event-driven architecture, as an example, supports compliance and can run checks without blocking operations.  

Krefting emphasizes that the more customer information you have, the better, and “having the structure to reconcile all customer information and keep it accurate, such as through customer profiles,” is essential for meeting AML requirements. Creating systems from Day 1 helps fintechs meet future regulatory requirements — integrate these processes into the user flow from the start, and you’ll avoid complications later.

Pitfall 6: Failing to evolve a long-term compliance strategy

As fintechs scale, their compliance needs will evolve. Many companies, however, struggle to adapt and adjust their compliance frameworks to new markets or products. Krefting stresses the importance of working with a partner who understands compliance and can help you grow sustainably, and will ask questions such as, “How many transactions do you have? Do you have all the controls that you need in place? Are they working?”

A proactive compliance strategy ensures smooth operations and builds investor confidence. As a fintech prepares for future funding rounds or an IPO, strong compliance frameworks become selling points and demonstrate the company’s commitment to long-term success. For example, Cross River’s API-based banking core is flexible and adaptable to different payment rails and compliance requirements. In addition to being able to handle complex scenarios, Cross River’s advanced compliance-driven features, such as subledgers and fraud controls, are strong selling points for partners and even for potential investors.

When fintechs work with banking experts, invest in scalable systems, and stay proactive about compliance, they’re more apt to grow sustainably and improve customer experiences.