2025 is expected to be an important year for the payments industry, driven by new technologies, evolving regulations, and changing consumer needs. Artificial intelligence (AI) will continue to be crucial in transforming the sector, but it is only one among many trends that will shape how businesses and consumers manage payments. Developments such as increased automation in digital payments, the expansion of embedded financial services, and potential deregulation allow more types of banking transactions as Trump prepares to take office next year.
This blog outlines several major trends redefining the payments field as we move into the next year. Whether you are involved in payments or financial services or looking to start or expand your business in FinTech, this blog provides valuable insights to help you and your company prepare for what lies ahead.
Top Payment Trends That You Should Know
AI to Become a Central Focus in FinTech in 2025 and Beyond
Artificial Intelligence (AI) is now a critical component in the financial technology sector, enhancing numerous functions with its ability to handle large datasets quickly. This technology improves fraud detection, automates regulatory compliance, and tailors user experiences. AI’s role extends to customer service and marketing, improving security against fraud through advanced AI models, including generative AI. Data show a marked rise in the use of AI within financial services. A 2024 survey reported that 65% of organizations have adopted AI in at least one area of operations.
Additionally, 91% of financial services companies actively explore or use AI in their systems. Among these, 55% are investigating generative AI for tasks like generating reports and enhancing customer interaction.
Generative AI is used to create content and compile investment research, helping streamline tasks and lessen the need for manual labor. In fraud prevention, AI evaluates transaction patterns to detect and halt suspicious activities. For example, the Commonwealth Bank of Australia uses AI to monitor 20 million transactions daily, sending alerts to over twenty thousand retailers to reduce fraud-related losses.
AI-powered chatbots and virtual assistants efficiently manage customer queries, shorten response times, and raise the quality of service. JPMorgan Chase has introduced a generative AI tool, the LLM Suite, to boost its team’s productivity. AI also supports real-time oversight and reporting, which helps financial firms meet regulatory demands and manage risks more effectively. This technology is increasingly used to streamline compliance operations, improving overall business efficiency.
The influence of AI in fintech is set to grow, with forecasts suggesting that the AI market within this sector will surpass $50 billion by 2029. Financial institutions will likely boost their investment in AI technologies to enhance operational efficiency, better customer experiences, and stay competitive in a quickly changing market.
Deregulation, More Competition, Introduction of Crypto Policies, CFPB Scrutiny, and More — All Under Trump’s Reign
Donald Trump’s election as president is expected to significantly impact the payments industry, particularly in areas such as stablecoins, earned wage access policies, and federal antitrust priorities. As the industry experiences rapid changes, the administration’s actions in terms of legislation and regulation will be key in shaping the future of digital payments and cryptocurrency initiatives.
The administration will also influence the competitive environment between emerging fintech companies like Stripe and Block and established corporations such as Visa and Amazon.
Consumer Financial Protection Bureau (CFPB) Leadership Changes
Despite attempts by some conservative lawmakers to dismantle the CFPB, a recent Supreme Court ruling has confirmed that the agency will continue to operate. Under Trump’s presidency, it is expected that there will be significant changes in leadership and policy direction at the CFPB.
Current Director Rohit Chopra is likely to be replaced before the end of his term, enabling Trump to nominate a successor who aligns with his administration’s goals. With the Senate under Republican control, the confirmation of this new leader is probable.
Potential Rollback of CFPB Rules
Unimplemented rules might be reconsidered or reversed. For example, the stocks of buy now, pay later (BNPL) companies recently surged, reflecting investor expectations that Trump’s CFPB would ease proposed BNPL regulations.
The future of the agency’s open banking rule is also in question, particularly following resistance from the industry. However, Republican support for open banking may keep this rule active under the new administration.
Cryptocurrency Policies
Trump has expressed support for cryptocurrency during his campaign, aiming to make the U.S. a major center for cryptocurrency activities. His position is likely to increase cryptocurrency ownership and enhance crypto payments’ adoption. After his election, Bitcoin’s price hit a record high, almost touching $100,000 before settling at $95,000, signaling strong consumer interest in cryptocurrency during his presidency.
Stablecoins, specifically from specialized cryptocurrency markets, play a significant role in mainstream financial systems. By 2025, stablecoins are expected to be widely used for daily transactions, especially in cross-border payments, because they offer fast, transparent, and cost-efficient transaction methods. This adoption is mainly due to their stability, achieved through collateralization and algorithmic adjustments, making them a dependable choice for financial planning and transactions.
Several major financial institutions have already started using stablecoins within their operational frameworks. JPMorgan Chase, for example, employs its blockchain-based JPM Coin to improve settlement processes and manage liquidity. BBVA uses the USD Coin (USDC) to facilitate real-time currency exchange and custody services. In Japan, leading banks such as MUFG, SMBC, and Mizuho use stablecoins in Project Pax to enable trade payments without depending on traditional correspondent banking networks.
The use of stablecoins is expected to increase significantly with the development of regulatory frameworks that boost confidence in these digital currencies. By 2025, the transaction volumes of global stablecoins are expected to reach trillions of dollars, making them fundamental elements of international payment systems.
Regulation of Junk Fees and Credit Card Interest Rates
The Biden administration’s CFPB tried to eliminate junk fees, such as credit card late fees and other charges considered burdensome to American households. On this issue, Trump’s proposals may show some alignment. He proposed a temporary 10% cap on credit card interest rates during his campaign.
Additionally, Vice President-Elect J.D. Vance sponsored the Credit Card Competition Act, which would have required banks issuing credit cards to offer an alternative network to Visa or Mastercard for processing transactions. However, reports suggest Vance has since rescinded support for this proposal.
Embedded Expansion
The term “embedded” is crucial in today’s financial innovations, especially in payment systems. This method integrates financial services directly into various platforms, improving user experiences and operational efficiency.
Embedded finance brings financial services such as payments, lending, insurance, and banking into non-financial platforms. This allows users to access financial services within their applications, removing the need to switch between different platforms. For example, ride-hailing apps that offer in-app payment options are a clear demonstration of this model.
The use of embedded finance is growing rapidly, with estimates predicting that the U.S. market will expand at a compound annual growth rate (CAGR) of 23.8% from 2024 to 2029.
In the early 2010s, companies like Uber pioneered the idea of “invisible” payments, where transactions are processed without the user’s active involvement at the point of sale. This idea has developed into “embedded” finance, where financial services are integrated smoothly and an integral part of the user journey, increasing engagement and satisfaction.
However, simply adding financial services to platforms is not enough. The focus now is on ensuring these services operate effectively and meet user expectations. A Payrix study points out that embedded payments’ success depends on minimizing disruptions for the customer, thus enhancing the overall user experience.
The future of embedded finance suggests that its integration is merely an initial step. The priority now lies in how these services are executed and the additional benefits they deliver to users. As technology progresses, we can anticipate more innovative uses of embedded finance, increasingly integrating financial services into daily activities.
The Rising Need for Customized Payment Solutions
As we approach 2025, consumer demand for payment solutions that cater to their unique preferences and behaviors is noticeable. In response, companies are using data-driven approaches to customize payment interactions to improve operational efficiency, enhance privacy protections, and boost customer acquisition and retention.
Customizing payments goes beyond mere convenience; it’s about developing user-focused experiences that resonate with consumers. Companies use detailed item-level data to provide payment options that match individual purchasing patterns. AI plays a crucial role in this shift, enabling businesses to sift through extensive data sets to discern customer preferences and behaviors, thereby supporting the delivery of customized payment experiences.
The benefits of customization also impact customer acquisition and retention. According to a Statista report, 80% of global business leaders recognize that customizing experiences to customer preferences increases spending, while 62% noted a positive effect on customer retention. Payment processors and neobanks that successfully employ customization strategies can stand out in a competitive market. By providing customized payment solutions, these entities can forge stronger, lasting connections with their customers, addressing the changing expectations of Millennials and Gen Z consumers.
A2A Payments Will Continue to Grow
Unlike traditional card-based transactions, A2A payments facilitate direct transfers between bank accounts, cutting out intermediaries and potentially reducing transaction costs. Particularly in emerging economies, A2A adoption is accelerating. In India, the Unified Payments Interface (UPI) has drastically increased digital transactions, reaching nearly 15 billion in August 2024 alone. Brazil’s Pix payment system, launched by the central bank, now dominates retail transactions, making up over a third of the total. In China, platforms like Alipay and WeChat Pay have added A2A capabilities, noticeably decreasing the reliance on cash. These systems are favored for their speed, low costs, and security, benefiting consumers and businesses.
Meanwhile, developed markets have been slower in adopting A2A payments, generally preferring digital wallets like Apple Pay and Google Pay. However, the development of real-time payment infrastructures such as the U.S. FedNow and The Clearing House’s Real-Time Payments (RTP) network is changing this trend. Additionally, businesses are increasingly drawn to A2A payments to bypass card processing fees and access funds more quickly, and consumers are seeking more accessible and user-friendly payment options.
Looking forward, the A2A payment sector is expected to see significant growth. Juniper Research predicts that the value of global A2A transactions will increase from $1.7 trillion in 2024 to $5.7 trillion by 2029, a 230% rise. Furthermore, the Capgemini World Payments Report 2025 suggests that A2A instant payments may reduce the growth of card transactions by 15-25%, indicating a major shift in payment methods. This expansion will likely affect cross-border and business-to-business transactions, with regulatory discussions and pilot programs initiated in 2024 setting the stage for considerable advancements in 2025.
Various monetization strategies could prove lucrative for businesses developing payment applications. These include offering premium features for a fee, charging a small percentage per transaction, engaging in affiliate marketing, introducing in-app purchases and membership fees, and selling source codes and APIs to other developers.
M&A Activity will Rise Among AI-Focused FinTechs
The fintech sector is seeing a significant rise in mergers and acquisitions (M&A), fueled by the adoption of AI and the drive for technological innovation. In 2023, the value of M&A deals reached approximately $58.8 billion in fintech investments worldwide, outstripping other types of investments within the industry. Companies are actively purchasing firms with advanced AI expertise to strengthen their technology infrastructure, exemplified by Robinhood’s acquisition of Pluto, an AI-driven fintech firm.
AI is pivotal in enhancing the efficiency of post-merger integrations, helping companies simplify operations and manage increasingly complex payment ecosystems effectively. This growing consolidation trend is altering the competitive dynamics of the fintech landscape, necessitating that companies adapt their strategies to stay competitive.
Role of Digital Wallets in Payments Is Expanding
Source: Juniper Research
Digital wallets are currently seeing a dramatic increase in usage, expanding their functions beyond simple payment processing to include aspects of digital identity management. This broadening of capabilities transforms how users interact with financial systems and digital platforms.
Regarding e-commerce and point-of-sale (POS) transactions, digital wallets have emerged as the preferred payment method. In 2023, they accounted for around 50% of the global e-commerce transaction value, expected to increase to 61% by 2027. Similarly, digital wallets constituted about 30% of the global POS transaction value in 2023, outperforming credit and debit cards. Projections for 2027 suggest that digital wallets will facilitate around 46% of all POS transactions, translating to an estimated $19.6 trillion in spending.
The European Union is actively developing the European Digital Identity Wallet in response to these trends. This tool will allow EU citizens and businesses to verify their identities and exchange electronic documents across member states. Furthermore, major companies like Apple are integrating digital identity capabilities into their wallet applications, enabling features such as the storage of digital driver’s licenses.
Fraud Prevention Still a Critical Issue
Merchants increasingly focus on fraud prevention and regulatory compliance as they confront new challenges in the payment landscape. Around 63% of merchants view fraud prevention as their top concern, closely followed by regulatory compliance, which concerns 60%.
Fraud prevention has become a critical issue as the rise in online transactions has led to more sophisticated fraud tactics. Alongside this, merchants must navigate complex and ever-evolving payment regulations, which demand significant resources and expertise. Cybersecurity is another major concern, with 46% of merchants worried about threats that could result in data breaches and financial losses. Additionally, 44% of merchants report difficulties integrating AI into their systems despite its potential to enhance fraud detection and operational efficiency. Furthermore, cross-border transactions present challenges for 10% of merchants, such as dealing with currency conversion and varied regulations.
To address these issues, merchants are enhancing their payment strategies to balance consumer demands for convenience and flexibility with the need to tackle fraud and ensure compliance. This includes investing in advanced fraud detection systems, keeping up-to-date with regulatory changes, and implementing secure payment technologies.
Web 3.0 to Change the Scene of the Payments System
The next evolution of the internet, Web 3.0, is set to significantly alter the landscape of payment systems by incorporating advanced technologies such as blockchain, artificial intelligence (AI), and decentralized finance (DeFi). These developments aim to craft smarter, more personalized, and more secure user payment experiences. Web 3.0 uses AI and machine learning to improve payment processes in several ways.
For instance, through natural language processing (NLP) and voice commands, users can initiate payments using voice instructions, simplifying transactions and enhancing the user experience. Additionally, systems can now analyze past payment behaviors and preferences to offer personalized payment recommendations and deals that meet individual user needs.
DeFi, a key aspect of Web 3.0, leverages blockchain technology to offer decentralized financial services that promote inclusivity by providing access to financial services without traditional intermediaries. It also supports the creation of innovative financial products. For example, tokenizing real-world assets and developing yield-bearing stablecoins are expanding opportunities within the DeFi ecosystem. The global market for Web 3.0 is anticipated to experience substantial growth, with projections suggesting a CAGR of 49.3% from 2024 to 2030.
Conclusion
As 2025 approaches, the payments industry is on the cusp of significant transformation driven by technological advancements, regulatory shifts, and evolving consumer demands. Artificial intelligence, embedded finance, and customized payment solutions will play key roles in shaping the future, enhancing efficiency and security while meeting individual preferences. Meanwhile, changes under the new U.S. administration, especially in cryptocurrency policies and financial regulation, will create new business opportunities and challenges.
Additionally, the rise of direct account-to-account transfers, expanding use of digital wallets, and developments in Web 3.0 indicate a more integrated and decentralized payment ecosystem. As competition intensifies, businesses must adapt to these trends by investing in innovative solutions and robust fraud prevention strategies to stay ahead. Understanding and preparing for these changes will be crucial for companies to remain competitive and responsive in this dynamic environment.
