diff --git a/app/code/Magento/Payment/Plugin/PaymentConfigurationProcess.php b/app/code/Magento/Payment/Plugin/PaymentConfigurationProcess.php
new file mode 100644
index 0000000000000..ff5d7b356e604
--- /dev/null
+++ b/app/code/Magento/Payment/Plugin/PaymentConfigurationProcess.php
@@ -0,0 +1,73 @@
+<?php
+/**
+ * Copyright © 2013-2017 Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Payment\Plugin;
+
+/**
+ * Class PaymentConfigurationProcess
+ *
+ * Removes inactive payment methods and group from checkout configuration.
+ */
+class PaymentConfigurationProcess
+{
+    /**
+     * @var \Magento\Payment\Api\PaymentMethodListInterface
+     */
+    private $paymentMethodList;
+
+    /**
+     * @var \Magento\Store\Model\StoreManagerInterface
+     */
+    private $storeManager;
+
+    /**
+     * @param \Magento\Payment\Api\PaymentMethodListInterface $paymentMethodList
+     * @param \Magento\Store\Model\StoreManagerInterface $storeManager
+     */
+    public function __construct(
+        \Magento\Payment\Api\PaymentMethodListInterface $paymentMethodList,
+        \Magento\Store\Model\StoreManagerInterface $storeManager
+    ) {
+        $this->paymentMethodList = $paymentMethodList;
+        $this->storeManager = $storeManager;
+    }
+
+    /**
+     * Checkout LayoutProcessor before process plugin.
+     *
+     * @param \Magento\Checkout\Block\Checkout\LayoutProcessor $processor
+     * @param array $jsLayout
+     * @return array
+     * @SuppressWarnings(PHPMD.UnusedFormalParameter)
+     */
+    public function beforeProcess(\Magento\Checkout\Block\Checkout\LayoutProcessor $processor, $jsLayout)
+    {
+        $configuration = &$jsLayout['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'];
+
+        if (!isset($configuration)) {
+            return [$jsLayout];
+        }
+
+        $storeId = $this->storeManager->getStore()->getId();
+        $activePaymentMethodList = $this->paymentMethodList->getActiveList($storeId);
+        $getCodeFunc = function ($method) {
+            return $method->getCode();
+        };
+        $activePaymentMethodCodes = array_map($getCodeFunc, $activePaymentMethodList);
+
+        foreach ($configuration as $paymentGroup => $groupConfig) {
+            $notActivePaymentMethodCodes = array_diff(array_keys($groupConfig['methods']), $activePaymentMethodCodes);
+            foreach ($notActivePaymentMethodCodes as $notActivePaymentMethodCode) {
+                unset($configuration[$paymentGroup]['methods'][$notActivePaymentMethodCode]);
+            }
+            if (empty($configuration[$paymentGroup]['methods'])) {
+                unset($configuration[$paymentGroup]);
+            }
+        }
+
+        return [$jsLayout];
+    }
+}
diff --git a/app/code/Magento/Payment/Test/Unit/Plugin/PaymentConfigurationProcessTest.php b/app/code/Magento/Payment/Test/Unit/Plugin/PaymentConfigurationProcessTest.php
new file mode 100644
index 0000000000000..646c7bcb670c3
--- /dev/null
+++ b/app/code/Magento/Payment/Test/Unit/Plugin/PaymentConfigurationProcessTest.php
@@ -0,0 +1,146 @@
+<?php
+/**
+ * Copyright © 2013-2017 Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Payment\Test\Unit\Plugin;
+
+/**
+ * Class PaymentConfigurationProcessTest.
+ */
+class PaymentConfigurationProcessTest extends \PHPUnit_Framework_TestCase
+{
+    /**
+     * @var \Magento\Store\Model\StoreManagerInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $storeManager;
+
+    /**
+     * @var \Magento\Store\Api\Data\StoreInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $store;
+
+    /**
+     * @var \Magento\Payment\Api\PaymentMethodListInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $paymentMethodList;
+
+    /**
+     * @var \Magento\Checkout\Block\Checkout\LayoutProcessor|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $layoutProcessor;
+
+    /**
+     * @var \Magento\Payment\Plugin\PaymentConfigurationProcess
+     */
+    private $plugin;
+
+    /**
+     * Set up
+     */
+    protected function setUp()
+    {
+        $this->storeManager = $this
+            ->getMockBuilder(\Magento\Store\Model\StoreManagerInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getStore'])
+            ->getMockForAbstractClass();
+        $this->store = $this
+            ->getMockBuilder(\Magento\Store\Api\Data\StoreInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getId'])
+            ->getMockForAbstractClass();
+        $this->paymentMethodList = $this
+            ->getMockBuilder(\Magento\Payment\Api\PaymentMethodListInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getActiveList'])
+            ->getMockForAbstractClass();
+        $this->layoutProcessor =  $this
+            ->getMockBuilder(\Magento\Checkout\Block\Checkout\LayoutProcessor::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['process'])
+            ->getMockForAbstractClass();
+
+        $objectManagerHelper = new \Magento\Framework\TestFramework\Unit\Helper\ObjectManager($this);
+        $this->plugin = $objectManagerHelper->getObject(
+            \Magento\Payment\Plugin\PaymentConfigurationProcess::class,
+            [
+                'paymentMethodList' => $this->paymentMethodList,
+                'storeManager' => $this->storeManager
+            ]
+        );
+    }
+
+    /**
+     * @param array $jsLayout
+     * @param array $activePaymentList
+     * @param array $expectedResult
+     * @dataProvider beforeProcessDataProvider
+     */
+    public function testBeforeProcess($jsLayout, $activePaymentList, $expectedResult)
+    {
+        $this->store->expects($this->once())->method('getId')->willReturn(1);
+        $this->storeManager->expects($this->once())->method('getStore')->willReturn($this->store);
+        $this->paymentMethodList->expects($this->once())
+            ->method('getActiveList')
+            ->with(1)
+            ->willReturn($activePaymentList);
+
+        $result = $this->plugin->beforeProcess($this->layoutProcessor, $jsLayout);
+        $this->assertEquals($result[0], $expectedResult);
+    }
+
+    /**
+     * Data provider for BeforeProcess.
+     *
+     * @return array
+     */
+    public function beforeProcessDataProvider()
+    {
+        $jsLayout['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [
+            'braintree' => [
+                'methods' => [
+                    'braintree_paypal' => [],
+                    'braintree' => []
+                ]
+            ],
+            'paypal-payments' => [
+                'methods' => [
+                    'payflowpro' => [],
+                    'payflow_link' => []
+                ]
+            ]
+        ];
+        $result1['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [];
+        $result2['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [
+            'braintree' => [
+                'methods' => [
+                    'braintree' => [],
+                    'braintree_paypal' => []
+                ]
+            ]
+        ];
+
+        $braintreePaymentMethod = $this
+            ->getMockBuilder(\Magento\Payment\Api\Data\PaymentMethodInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getCode'])
+            ->getMockForAbstractClass();
+        $braintreePaypalPaymentMethod = $this
+            ->getMockBuilder(\Magento\Payment\Api\Data\PaymentMethodInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getCode'])
+            ->getMockForAbstractClass();
+
+        $braintreePaymentMethod->expects($this->any())->method('getCode')->willReturn('braintree');
+        $braintreePaypalPaymentMethod->expects($this->any())->method('getCode')->willReturn('braintree_paypal');
+
+        return [
+            [$jsLayout, [], $result1],
+            [$jsLayout, [$braintreePaymentMethod, $braintreePaypalPaymentMethod], $result2]
+        ];
+    }
+}
diff --git a/app/code/Magento/Payment/etc/frontend/di.xml b/app/code/Magento/Payment/etc/frontend/di.xml
index d86147b109366..e3d9c3593c6c4 100644
--- a/app/code/Magento/Payment/etc/frontend/di.xml
+++ b/app/code/Magento/Payment/etc/frontend/di.xml
@@ -19,4 +19,7 @@
             </argument>
         </arguments>
     </type>
+    <type name="Magento\Checkout\Block\Checkout\LayoutProcessor">
+        <plugin name="ProcessPaymentConfiguration" type="Magento\Payment\Plugin\PaymentConfigurationProcess"/>
+    </type>
 </config>
diff --git a/app/code/Magento/Vault/Plugin/PaymentVaultConfigurationProcess.php b/app/code/Magento/Vault/Plugin/PaymentVaultConfigurationProcess.php
new file mode 100644
index 0000000000000..d0fa85925afbe
--- /dev/null
+++ b/app/code/Magento/Vault/Plugin/PaymentVaultConfigurationProcess.php
@@ -0,0 +1,93 @@
+<?php
+/**
+ * Copyright © 2013-2017 Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Vault\Plugin;
+
+/**
+ * Class PaymentVaultConfigurationProcess
+ *
+ * Checks if vault group have active vaults.
+ */
+class PaymentVaultConfigurationProcess
+{
+    /**
+     * @var \Magento\Vault\Api\PaymentMethodListInterface
+     */
+    private $vaultPaymentList;
+
+    /**
+     * @var \Magento\Vault\Api\PaymentMethodListInterface
+     */
+    private $paymentMethodList;
+
+    /**
+     * @var \Magento\Store\Model\StoreManagerInterface
+     */
+    private $storeManager;
+
+    /**
+     * @param \Magento\Vault\Api\PaymentMethodListInterface $vaultPaymentList
+     * @param \Magento\Payment\Api\PaymentMethodListInterface $paymentMethodList
+     * @param \Magento\Store\Model\StoreManagerInterface $storeManager
+     */
+    public function __construct(
+        \Magento\Vault\Api\PaymentMethodListInterface $vaultPaymentList,
+        \Magento\Payment\Api\PaymentMethodListInterface $paymentMethodList,
+        \Magento\Store\Model\StoreManagerInterface $storeManager
+    ) {
+        $this->vaultPaymentList = $vaultPaymentList;
+        $this->paymentMethodList = $paymentMethodList;
+        $this->storeManager = $storeManager;
+    }
+
+    /**
+     * Checkout LayoutProcessor before process plugin.
+     *
+     * @param \Magento\Checkout\Block\Checkout\LayoutProcessor $processor
+     * @param array $jsLayout
+     * @return array
+     * @SuppressWarnings(PHPMD.UnusedFormalParameter)
+     */
+    public function beforeProcess(\Magento\Checkout\Block\Checkout\LayoutProcessor $processor, $jsLayout)
+    {
+        $configuration = &$jsLayout['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'];
+
+        if (!isset($configuration)) {
+            return [$jsLayout];
+        }
+
+        $storeId = $this->storeManager->getStore()->getId();
+        $activePaymentMethodList = $this->paymentMethodList->getActiveList($storeId);
+        $activeVaultList = $this->vaultPaymentList->getActiveList($storeId);
+        $getCodeFunc = function ($method) {
+            return $method->getCode();
+        };
+        $getProviderCodeFunc = function ($method) {
+            return $method->getProviderCode();
+        };
+        $activePaymentMethodCodes = array_map($getCodeFunc, $activePaymentMethodList);
+        $activeVaultProviderCodes = array_map($getProviderCodeFunc, $activeVaultList);
+        $activePaymentMethodCodes = array_merge(
+            $activePaymentMethodCodes,
+            $activeVaultProviderCodes
+        );
+
+        foreach ($configuration as $paymentGroup => $groupConfig) {
+            $notActivePaymentMethodCodes = array_diff(array_keys($groupConfig['methods']), $activePaymentMethodCodes);
+            foreach ($notActivePaymentMethodCodes as $notActivePaymentMethodCode) {
+                unset($configuration[$paymentGroup]['methods'][$notActivePaymentMethodCode]);
+            }
+            if ($paymentGroup === 'vault' && !empty($activeVaultProviderCodes)) {
+                continue;
+            }
+            if (empty($configuration[$paymentGroup]['methods'])) {
+                unset($configuration[$paymentGroup]);
+            }
+        }
+
+        return [$jsLayout];
+    }
+}
diff --git a/app/code/Magento/Vault/Test/Unit/Plugin/PaymentVaultConfigurationProcessTest.php b/app/code/Magento/Vault/Test/Unit/Plugin/PaymentVaultConfigurationProcessTest.php
new file mode 100644
index 0000000000000..ea23616887018
--- /dev/null
+++ b/app/code/Magento/Vault/Test/Unit/Plugin/PaymentVaultConfigurationProcessTest.php
@@ -0,0 +1,158 @@
+<?php
+/**
+ * Copyright © 2013-2017 Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+namespace Magento\Vault\Test\Unit\Plugin;
+
+/**
+ * Class PaymentVaultConfigurationProcessTest.
+ */
+class PaymentVaultConfigurationProcessTest extends \PHPUnit_Framework_TestCase
+{
+    /**
+     * @var \Magento\Store\Model\StoreManagerInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $storeManager;
+
+    /**
+     * @var \Magento\Store\Api\Data\StoreInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $store;
+
+    /**
+     * @var \Magento\Vault\Api\PaymentMethodListInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $vaultList;
+
+    /**
+     * @var \Magento\Payment\Api\PaymentMethodListInterface|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $paymentMethodList;
+
+    /**
+     * @var \Magento\Checkout\Block\Checkout\LayoutProcessor|\PHPUnit_Framework_MockObject_MockObject
+     */
+    private $layoutProcessor;
+
+    /**
+     * @var \Magento\Vault\Plugin\PaymentVaultConfigurationProcess
+     */
+    private $plugin;
+
+    /**
+     * Set up
+     */
+    protected function setUp()
+    {
+        $this->storeManager = $this
+            ->getMockBuilder(\Magento\Store\Model\StoreManagerInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getStore'])
+            ->getMockForAbstractClass();
+        $this->store = $this
+            ->getMockBuilder(\Magento\Store\Api\Data\StoreInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getId'])
+            ->getMockForAbstractClass();
+        $this->vaultList = $this
+            ->getMockBuilder(\Magento\Vault\Api\PaymentMethodListInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getActiveList'])
+            ->getMockForAbstractClass();
+        $this->paymentMethodList = $this
+            ->getMockBuilder(\Magento\Payment\Api\PaymentMethodListInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getActiveList'])
+            ->getMockForAbstractClass();
+        $this->layoutProcessor =  $this
+            ->getMockBuilder(\Magento\Checkout\Block\Checkout\LayoutProcessor::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['process'])
+            ->getMockForAbstractClass();
+
+        $objectManagerHelper = new \Magento\Framework\TestFramework\Unit\Helper\ObjectManager($this);
+        $this->plugin = $objectManagerHelper->getObject(
+            \Magento\Vault\Plugin\PaymentVaultConfigurationProcess::class,
+            [
+                'vaultPaymentList' => $this->vaultList,
+                'paymentMethodList' => $this->paymentMethodList,
+                'storeManager' => $this->storeManager
+            ]
+        );
+    }
+
+    /**
+     * @param array $jsLayout
+     * @param array $activeVaultList
+     * @param array $activePaymentList
+     * @param array $expectedResult
+     * @dataProvider beforeProcessDataProvider
+     */
+    public function testBeforeProcess($jsLayout, $activeVaultList, $activePaymentList, $expectedResult)
+    {
+        $this->store->expects($this->once())->method('getId')->willReturn(1);
+        $this->storeManager->expects($this->once())->method('getStore')->willReturn($this->store);
+        $this->vaultList->expects($this->once())->method('getActiveList')->with(1)->willReturn($activeVaultList);
+        $this->paymentMethodList->expects($this->once())
+            ->method('getActiveList')
+            ->with(1)
+            ->willReturn($activePaymentList);
+        $result = $this->plugin->beforeProcess($this->layoutProcessor, $jsLayout);
+        $this->assertEquals($result[0], $expectedResult);
+    }
+
+    /**
+     * Data provider for BeforeProcess.
+     *
+     * @return array
+     */
+    public function beforeProcessDataProvider()
+    {
+        $jsLayout['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [
+            'vault' => [
+                'methods' => []
+            ],
+            'braintree' => [
+                'methods' => [
+                    'braintree_paypal' => [],
+                    'braintree' => []
+                ]
+            ],
+            'paypal-payments' => [
+                'methods' => [
+                    'payflowpro' => [],
+                    'payflow_link' => []
+                ]
+            ]
+        ];
+        $result1['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [];
+        $result2['components']['checkout']['children']['steps']['children']['billing-step']
+        ['children']['payment']['children']['renders']['children'] = [
+            'vault' => [
+                'methods' => []
+            ],
+            'braintree' => [
+                'methods' => [
+                    'braintree_paypal' => []
+                ]
+            ]
+        ];
+
+        $vaultPaymentMethod = $this
+            ->getMockBuilder(\Magento\Vault\Api\PaymentMethodListInterface::class)
+            ->disableOriginalConstructor()
+            ->setMethods(['getCode', 'getProviderCode'])
+            ->getMockForAbstractClass();
+
+        $vaultPaymentMethod->expects($this->any())->method('getCode')->willReturn('braintree_paypal_vault');
+        $vaultPaymentMethod->expects($this->any())->method('getProviderCode')->willReturn('braintree_paypal');
+
+        return [
+            [$jsLayout, [], [], $result1],
+            [$jsLayout, [$vaultPaymentMethod], [$vaultPaymentMethod], $result2]
+        ];
+    }
+}
diff --git a/app/code/Magento/Vault/etc/frontend/di.xml b/app/code/Magento/Vault/etc/frontend/di.xml
index faa72294f6ba8..598a30aa1c73b 100644
--- a/app/code/Magento/Vault/etc/frontend/di.xml
+++ b/app/code/Magento/Vault/etc/frontend/di.xml
@@ -19,4 +19,8 @@
             <argument name="session" xsi:type="object">Magento\Customer\Model\Session</argument>
         </arguments>
     </type>
+    <type name="Magento\Checkout\Block\Checkout\LayoutProcessor">
+        <plugin name="ProcessPaymentVaultConfiguration" type="Magento\Vault\Plugin\PaymentVaultConfigurationProcess"/>
+        <plugin name="ProcessPaymentConfiguration" disabled="true"/>
+    </type>
 </config>