What Lean Manufacturing Can Teach Payments About Hidden Operational Cost

We’ve started doing some work in Japan.

It was a useful reminder: the Japanese built Lean manufacturing to systematically identify and eliminate hidden operational waste.

We’re seeing something very similar in payments.

Across the $45+ trillion global card payment infrastructure, there is an estimated $60–120 billion in avoidable operational cost. This is the same category of hidden waste that Lean was designed to surface and eliminate.

In payments, this waste shows up across card network operations, interchange processing, network fees, and exception handling inside issuer and acquirer environments.

Not fraud losses.

Not the cost of innovation.

Hidden operational cost.

Where the waste actually comes from

Much of this leakage is not mysterious or exotic. It typically shows up as:

• Interchange downgrades caused by incomplete or inconsistent transaction data that could be fixed

• Avoidable card network fees tied to configuration, enrollment, or legacy service choices

• Manual exceptions and rework that get absorbed into “business as usual”

The drivers of these costs are distributed across product, operations, compliance, and technology teams. There is often no single owner and no clear line of sight into how much the leakage adds up to.

Why it persists

What’s interesting is that many of these costs are addressable once you know where to look.

But most organizations don’t have:

• Clear visibility into where the leakage is occurring

• A consolidated view across teams

• A way to quantify the cumulative impact

As a result, the waste remains hidden, tolerated, and normalized.

The Lean parallel

Toyota spent decades building systems to surface and eliminate exactly this kind of hidden operational waste.

The same principles apply to payments.

The difference is not complexity. It’s discipline.

Few organizations have applied Lean-style thinking systematically to card network operations and payment economics.

The practical takeaway

We’re finding that institutions that take a structured look at operational cost across payments usually uncover more opportunity than they expected.

This is not about large-scale transformation.

It’s about visibility, ownership, and discipline applied to areas that quietly compound over time.

For issuers and acquirers under margin pressure, this kind of hidden waste is increasingly hard to ignore.

Worth exploring in your organization?