Industry insights: Steve Klebe on payments, processing costs, and the future of fintech
About Steve
Steve Klebe is a payments industry veteran with 40 years of experience and who recently retired from his role as Head of Enterprise Payments Performance at Stripe, where he worked with key enterprise partners and clients. He currently serves on multiple private company boards and advisory boards, is an angel investor and is active in multiple expert networks. Prior to Stripe, Steve served as Head of Google Pay BD – PSP Partnerships, where he drove global partnerships for online and in-app payment acceptance. His career spans leadership roles at VeriFone, CyberCash, and CyberSource, with expertise in payment processing, fraud prevention, data security, and authentication.
A recognized industry thought leader, Steve has spoken at dozens of conferences and served five terms on the Electronic Transaction Association (ETA) Board of Directors. He represented multiple companies on the Advisory boards of the Merchant Risk Council, Merchant Advisory Group, and PaymentsEd Forum.
Interview questions
Yeeld: You’ve had a remarkable 40-year career in payments, recently retiring as Head of Enterprise Payments Performance at Stripe. Looking back across your time at VeriFone, CyberSource, Google, and Stripe, what are the most significant shifts you’ve observed in how businesses approach payment processing costs?
Steve: Here in the US it used to be that most merchants would use a single payment processor and all they really needed was support for cards. With the emergence of ecommerce that all changed around 1993. Since card payments were seen as the only viable option for ecommerce the pressure to reduce fees emerged and started to become an obsession. This though is intertwined with the need to reduce fraud, which was never an issue in the card present realm, and optimize authorization rates, which was also not an issue for most card present transactions. So, while the quest to reduce the costs above Interchange are ever present, the need to pay a reasonable amount for the value added services of fraud prevention and performance came along. One of the best methods to reduce the baseline fees is by having multiple PSPs (payment service providers) but that requires either a decent sized team of engineers and product managers or a decision to use what we now refer to as Orchestration. The other cost/opportunity comes from the proliferation of alternative payment methods. Some of these like BNPL cost more than cards but promise incremental conversions. Others like ACH promise super low cost but there is a lot of consumer resistance. Bottom line, the entirety of managing your payment stack has become much more complex and I do not see any end in sight.
Yeeld: During your time building Google Pay’s PSP partnership program – onboarding over 150 PSPs globally – and later working with enterprise clients at Stripe, what strategies have you seen work best for fintech companies trying to establish credibility and meaningful partnerships in the payments ecosystem?
Steve: There are many table stakes aspects such as PCI compliance and uptime, etc. but due to the diversity and fragmentation of the ecosystem investing in partnerships is paramount. I emphasize the word “investing”. There are press releases every day but in this area I advise a Less Is More strategy. I suggest investing in fewer partnerships but making sure it is with credible companies and making sure that there is sound strategic mutual self interest. It is much less important if these have a direct economic return and much more important if it truly adds value to all the parties involved.
Yeeld: As someone who’s been deeply involved in fraud prevention and authentication throughout your career, how do you view surcharging and cost-recovery mechanisms? What’s your perspective on how these solutions fit into the broader payments landscape?
Steve: On a personal level I despise surcharging but I understand the objective that merchants have in recovering some of these costs. In my opinion the solution would be getting away from the peanut butter approach to how Interchange and rewards are applied. I believe consumers would be OK getting a lower reward when they are buying low margin commodity type items like milk at the grocery store and merchants would be OK contributing to higher rewards when the use of the card is truly driving higher margin and incremental sales. From a near term practical perspective I believe at a minimum PSPs need to be trained properly about the rules and laws and their systems need to be smart enough to apply surcharges only when they are legitimate. I have experienced multiple situations where the merchants were given bad advice by their PSPs and consumers were being charged when they should not be like when paying with a Signature debit card.
Yeeld: In your recent enterprise-focused role at Stripe, what trends were you seeing in how businesses evaluate and optimize their payment operations? How has the economic environment influenced these decisions?
Steve: With all the chaos in our country around things like tariffs alongside the concerns about the impact that AI is having and likely to increasingly have, enterprises are even more sensitive about their costs than they ever have been. This has led many to consider more seriously payment options that could lower their costs as well as leveraging multiple PSPs to increase their leverage to negotiate better pricing.
Yeeld: Now that you’re serving on multiple private company boards and advisory roles, what opportunities and challenges are you seeing for payment companies, particularly those focused on helping businesses optimize processing costs?
Steve: Several of the companies I am advising are offering embedded payments. Many PSPs are offering solutions for these platforms but it is not always obvious that the teams that are serving this segment are trained deeply enough to focus on the mission of lowering processing costs and rather are often more focused on optimizing the PSPs revenue. In the long run this actually hurts the PSPs. I would therefore say PSPs have to do a much better job training these ISV/Platform support teams with the client’s objectives as the primary focus. Lastly I would say that lowering processing costs, while clearly an objective, should probably not be the primary objective. Other key areas to focus on are; fraud prevention during enrollment, recurring billing efficiency, dispute management, etc.
Yeeld: Given the evolving regulatory landscape and card network mandates, what major trends are you seeing in credit card surcharging adoption today? What advice would you have for companies looking to implement a solution to manage processing costs while staying compliant?
Steve: I believe the Card networks need to do a much better job of educating the PSP and merchant communities on the rules and then a much better job of enforcement. In the same way card data security got better once PCI was implemented, there needs to be a mandatory training and certification program for all primary and secondary PSPs on surcharging. This is also an area where the Card networks ought to be able to collaborate so there is consistency. PCI originally was separate programs by each Card network and the industry rose up and demanded that they work together on a single program. This is not an area to compete in. I also believe there ought to be a national law covering this so consumers buying online or traveling around the country do not need to understand the nuances. Lastly I would say that aside from making sure you’re compliant, businesses considering implementing surcharges should really understand what the negative impact can be when consumers don’t come back to shop when they are surcharged.
Yeeld: As a recognized industry thought leader who’s spoken at dozens of conferences, what excites you most about the future of payments? Where do you see the biggest opportunities for innovation in the next 5-10 years?
