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10 payments trends for 2025 and beyond - Industry roundup: 16 December

10 payments trends for 2025 and beyond 

Mastercard has released its top 10 payments trends for 2025, highlighting advancements in AI, B2B payments, digital identity, and more. Here are key takeaways:

1. Outsmarting AI fraudsters… with AI. Cybercriminals are using generative AI for scams like deepfakes and phishing. To counter this, companies are deploying AI-powered tools. For example, Mastercard’s Decision Intelligence Pro uses AI to analyse a trillion data points in milliseconds to detect fraud, enhancing security by up to 300% in some cases.

2. Small business, bigger toolboxes. Small businesses are increasingly leveraging digital tools that were once out of reach. Centralised platforms now enable automated tasks, personalised marketing, and data-driven decision-making, helping businesses operate more efficiently.

3. A new era of digital inclusion. Digital wallets are becoming essential in emerging markets, often serving as substitutes for traditional bank accounts. Mastercard’s Pay Local links credit or debit cards to local wallets, enabling seamless international transactions without preloading funds.

4. Digital identity on demand. Digital identity solutions powered by biometrics and machine learning are transforming online security. Passkeys, which are biometric-driven passwordless login systems, are gaining traction, promising secure, frictionless interactions across sectors like healthcare and education.

5. Making B2B as easy as ABC. Corporate payments are moving toward digital solutions like virtual cards, which automate reconciliation, reduce errors, and improve spending controls. The embedded finance market for small businesses could reach $124bn by 2025.

6. Checkout gets a glow-up. Contactless payments have become standard, but innovation continues. Tap-on-phone technology turns devices into payment terminals, simplifying merchant operations and reducing checkout times.

7. Real-time comes of age. Real-time payment systems are expanding globally, with 575 billion transactions expected by 2028. Interoperability between domestic and cross-border systems is improving, enhancing convenience and financial access.

8. The rise of collaborative ecosystems. Financial institutions, fintechs, and governments are forming partnerships to co-create solutions. Collaboration drives innovation, streamlines services, and builds trust in digital ecosystems.

9. Banking on blockchain. Blockchain’s potential in payments and commerce is maturing. Digital assets like cryptocurrencies and stablecoins are being commercialised, enhancing speed, security, and efficiency in global finance.

10. The token economy. Tokenisation is redefining payments by eliminating manual card entries and enabling personalised offers while safeguarding personal data. Blockchain-based tokenisation extends to assets like real estate and carbon credits, boosting transparency and efficiency.

 

UK regulator proposes price cap on cross-border card fees 

The UK’s Payment Systems Regulator (PSR) has published the final report of its market review into cross-border interchange fees. The report finds that the high level of fees is harming businesses, so the PSR is also publishing a consultation on a proposed price cap remedy that seeks to protect UK businesses from overpaying these fees. 

Over the course of 2021 and 2022, Mastercard and Visa raised their cross-border interchange fees fivefold, from 0.2% to 1.15% for debit cards and 0.3% to 1.5% for credit cards. The PSR finds that this was harmful to the interests of UK businesses and, ultimately, their customers.   

The PSR published its interim report in December 2023, setting out its provisional view that this market is not working well. Following further engagement and analysis, the final report confirms that Mastercard and Visa were not subject to effective competitive constraints, allowing them to increase their fees to an unduly high level. It also notes that the pair raised their fees without regard to the potential impacts on or interests of businesses and their customers, with the increases costing businesses £150-200m extra annually.

The PSR did not identify any justifications for the increases. Mastercard and Visa were not able to show that they undertook any specific assessment when deciding to increase their fees, and the PSR has seen no evidence that the pre-increase fee levels were not working. 

Alongside the final report, the PSR is launching a consultation on implementing a price cap remedy to prevent businesses from overpaying these fees any longer.  

Subject to the outcome of the consultation, the PSR is proposing to intervene in two stages. It is consulting on whether to introduce a short-term interim cap on fees and, if so, at what level. The PSR has suggested a range of options for this, including the levels that were in place before the schemes raised fees, as well as levels that could allow issuers to cover the costs of a transaction. However, the regulator is keen to hear views, supported by evidence, on other potential levels. This cap would be set for a limited period while further analysis is conducted to determine an appropriate methodology and level for a longer-lasting cap.  

The PSR is collecting feedback on its consultation until 7th February 2025 and encourages all interested parties to contribute evidence. If it decides a phased approach to a cap is appropriate, the PSR will publish a final remedies notice on the proposed initial price cap next year and a proposed methodology for developing a lasting cap at a later date.

 

India’s economy is likely to stand firm in an uncertain world

Goldman Sachs Research (GSR) expects the Indian economy to be relatively insulated against global shocks over the coming year — including tariffs levied by the new administration of US President-elect Donald Trump. India's GDP will keep growing strongly in the long term — but with a speed bump next year as government spending and credit growth slow, according to GSR economists’ forecast.

“The structural long-term growth story for India remains intact, driven by favourable demographics and stable governance,” Santanu Sengupta, chief India economist at Goldman Sachs Research, wrote in his team’s report.

GSR economists expect India’s economy to grow at an average of 6.5% between 2025 and 2030. Their 6.3% forecast for 2025 is 40 basis points below a consensus of economists surveyed by Bloomberg. The decelerated growth rate is, in part, due to fiscal consolidation and slower credit growth.

Indian equity markets are likely to keep performing strongly in the medium term, according to a separate report from GSR. In the near term, though, slowing economic growth, high starting valuations, and weak earnings-per-share revisions could keep markets rangebound.

GSR equity strategists expect the benchmark NIFTY index to reach 27,000 by the end of 2025. They also forecast MSCI India earnings growth at 12% and 13% respectively for the calendar years 2024 and 2025 — lower than consensus expectations of 13% and 16%.

 

SocGen completes first repo transaction on public blockchain with Banque de France

Societe Generale has announced the successful completion of a collateralised market transaction fully executed on blockchain through its subsidiary Societe Generale - FORGE. This is the first repo transaction (sale and repurchase agreement) in digital securities (security tokens) with a Eurosystem central bank.

Societe Generale deposited as collateral with the Banque de France some bonds issued in 2020 on the public Ethereum blockchain in exchange for Central Bank Digital Currency (CBDC) issued by the Banque de France on its DL3S blockchain.

SocGen says this transaction demonstrates the technical feasibility of interbank refinancing operations directly on blockchain. It illustrates the potential of a CBDC to improve the liquidity of digital financial securities.

 

PayerMax and Standard Chartered look to simplify cross-border payments

During the recent Singapore Fintech Festival, Wang Hu, Co-founder & President at PayerMax, and Luke Boland, Global Head of Fintech at Standard Chartered, shared on how their companies are jointly helping global brands address the challenges in cross-border payments. This collaboration, spanning multiple countries and regions, has looked to advance the landscape of cross-border payments in emerging markets through robust compliance frameworks, technological innovations, and ecosystem cooperation.

Merchants with a global footprint need to support their operations with a trusted payment solution that can effectively serve multiple markets and regions. PayerMax therefore partnered with Standard Chartered to ensure its solution can deliver that capability by tapping on the bank's strong global network and deep local knowledge of emerging markets.

PayerMax integrated its solution with Standard Chartered's FX Scale product to link accounts in other countries through its hubs in Hong Kong and Singapore. They have also achieved technical integration across several countries using host-to-host (H2H) connections and APIs. This integration supports multi-currency virtual accounts and batch payment solutions, helping merchants efficiently manage multi-currency accounts and distinguish fund flows by currency and channel.

In the future, the two companies say they will continue to explore more cooperation opportunities to bring more convenient, efficient, and secure payment experiences to global merchants and consumers.

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