Understanding the layers behind digital payments
A continuation of my exploration of digital payments, looking at how different layers relate and how the Mollie–GoCardless story helps illuminate the broader picture.
A companion piece to “How Money Moves”
Over the past months I’ve been exploring the mechanics behind digital payments. It began with a simple curiosity about how Apple Pay and Google Wallet actually work, what happens when you tap a terminal in a shop, and why online payments behave differently from card-present transactions. That curiosity eventually led to How Money Moves, an attempt to sketch the broader landscape and offer an intuitive sense of its underlying structure.
This new piece continues that exploration. After writing the first article, news broke that Mollie intends to acquire GoCardless, a company specialising in bank-to-bank payments. It made me realise that the earlier map could be coloured in more sharply. The physical and online worlds are converging; companies that once occupied narrow roles now stretch across multiple layers. The Mollie–GoCardless story is a concrete moment within that larger shift.
I’m not approaching this as a payments expert. I’m simply trying to understand how things fit together: which actors sit where, why so many layers exist, and why the distinction between customer-initiated and business-initiated payments turns out to be foundational. If How Money Moves traced the outline of the terrain, this piece adds a few contour lines.
Tom Matsuda
A simple model of the four layers
Much of the confusion around payments comes from mixing up categories. It helps to strip the system back to four layers. They are not industry terms, but they reflect how the system behaves.
Layer 1. The infrastructure
The deep foundation where value actually moves: card networks, bank-to-bank systems, and the rulebooks that govern them.
Examples include Visa and Mastercard for card rails, SEPA Credit Transfer and SEPA Direct Debit for euro bank payments, and systems such as ACH (US) or UPI (India).
Most businesses never interact with this layer directly.
Layer 2. The processors
Institutions allowed to operate on the infrastructure. They submit transactions, perform authorisations, handle settlement, and take on risk.
Examples include Worldpay, FIS, and TSYS for card processing, and GoCardless for Direct Debit and other bank-to-bank pull payments. Some processors specialise in cards, others in Direct Debit, others in specific regions or schemes.
Layer 3. The service layer for businesses
The space most digital companies touch. Here sit the platforms that make it easier to accept payments without dealing with banks or networks directly. They provide a unified interface over underlying complexity.
Examples include Stripe, Adyen, Mollie, PayPal, and Checkout.com, often bundling gateway, processing, reporting, and compliance into a single integration.
Layer 4. The consumer-facing experience
Wallets, checkouts, and authentication flows. This is the layer users see. It shapes convenience and trust but does not move money.
Examples include Apple Pay, Google Pay, PayPal Checkout, and local methods such as iDEAL or Bancontact, which sit on top of lower layers rather than replacing them.
Seen this way, the landscape becomes less opaque. You can begin to place companies by the part of the system they attach to, and understand their announcements as shifts within that structure rather than isolated moves.
Rob Hoeijmakers
Two different payment logics: push and pull
Another distinction helps the picture settle: the difference between push and pull payments.
Push payments are initiated by the customer. They include card payments, iDEAL, bank transfers, and digital wallets. They work well for occasional purchases and checkout flows.
Pull payments are initiated by the business, with prior consent. Direct Debit is the canonical example. These payments underpin subscriptions, utilities, insurance premiums, and much of B2B invoicing. They reduce friction and cost but require more trust and careful handling.
For years, these two logics developed in parallel. Providers typically focused on one or the other. When companies began blending subscription models with one-off purchases, the separation became visible: two systems, two logics, sometimes two providers.
Understanding this divide makes the Mollie–GoCardless news easier to interpret. One platform blending both logics is not a feature expansion but a structural change.
How companies occupy different parts of the system
With this model in mind, the landscape becomes easier to navigate. Companies can be understood in terms of the positions they take up rather than the labels they use. Some sit close to the financial machinery; others build tools on top of it. Some shape the checkout experience; others handle risk, routing, or settlement.
The exact boundaries are less important than the orientation. When a provider expands to another region, introduces a new payment method, or launches risk and analytics tools, it is often shifting its position within the system rather than redefining itself.
This narrative view is more forgiving than strict classifications. It offers enough structure to orient yourself without requiring encyclopaedic precision. You begin to see a pattern: the pieces of the payments ecosystem are aligning, slowly but noticeably, as digital commerce pulls formerly separate functions closer together.
Why the Mollie–GoCardless story fits the broader movement
Seen through this lens, the acquisition points to something larger than a corporate deal. Online payments were long built around push transactions. Recurring revenue, however, relies on pull transactions. For a long time these worlds remained separate, even as many businesses now blend both modes of interaction.
Bringing them together within a single platform reduces friction for the companies using it. But more importantly, it reflects a maturing of the European payments landscape. The system is not becoming simpler, yet the way the pieces relate to each other is becoming easier to recognise.
That, to me, is the significance of the Mollie–GoCardless story. It is not about scale or product consolidation but about coherence. A reminder that understanding digital payments is less about memorising terms than about seeing where things belong, how they evolve, and why some combinations begin to make sense only when the underlying structure comes into view.
If How Money Moves offered a map, this piece adds a few landmarks. Not a full guide, but enough to help you move through the terrain with a clearer sense of what sits where, and why.