2024 was a pivotal year for many industries: geopolitical instability, economic changes, and the rise of AI dominated the news cycles and transformed business practices everywhere. 

The payments industry was no different. Technological, regulatory, and market-driven developments set important changes in motion that will alter the payments landscape for years to come. 2025 will build on 2024’s developments in AI to integrate it into nearly every aspect of payments, increasing security, efficiency, and personalisation. 

New initiatives like the US’s FedNow and the EU’s Wero leverage technology to speed up payments and simplify compliance and data collection, paving the way for more integration in payments beyond the national level. The rise in global interconnectedness will lead to a strong trend of modernisation in cross-border payments, making all payments faster and cheaper. Lastly, the ISO20022 revolution will reach its peak in early 2025 before the mandatory adoption in November, leading to more interoperability and unprecedented data collection potential. 

1. AI-powered innovation

AI was on everyone’s radar in 2024 with the release of new, more powerful AI chatbots from OpenAI, Microsoft, and Google. 2025 will bring more meaningful integration of these tools in every aspect of the industry: Apple’s announcement that AI would summarise messages, power its digital assistant, and be integrated into every aspect of its software is just one manifestation of its ubiquity, which will be replicated in the payments industry.

AI could play a crucial role in enhancing security without compromising speed or efficiency, a trade-off that has plagued the payments industry for decades. AI tools can analyse users’ transaction histories and identify abnormal activities before they become a problem, moving from a reactive to a predictive security system that is safer and more reliable. 

On a macro scale, AI can help banks’ anti-money laundering and fraud detection efforts by training algorithms to identify risks, verify identities, and analyse transactions as they happen. Institutions will also be able to provide personalised experiences to clients using AI, and use tools themselves to predict liquidity needs and identify inefficiencies or anomalies in their processes.

2. More accessibility through modernisation

Integrated software vendors and technological advancements have been helping small and medium enterprises (SMEs) access better payment tools, and in 2025, even more products will be launched to increase access to payment systems across the board. 

For years, SMEs have lagged behind large corporations in adopting innovative technology, as the newest tools were initially only available as enterprise-level products. Now, increasingly accessible payment tools mean that businesses of all sizes can use secure and automated payment solutions, democratising the industry and decreasing barriers to entry. The gap between SMEs and corporations is closing in.

Customer-targeted initiatives like Wero, the European Payments Initiative’s account-to-account payments solution, are offering tempting alternatives to traditional payment systems and streamlining the way large institutions handle individuals’ payments. 

3. Payments speeding up…

The overwhelming trend in payments for 2025 and beyond is speed. Payments that only a few years ago could take weeks to arrive are now taking a handful of days, and in 2025, this will be reduced to seconds as real-time payments become the norm.

On a regional level, real-time payment rails have reached beyond established markets and into emerging economies: India’s Unified Payments Interface and Brazil’s Pix are joining similar products by the US and EU to make payments easier and faster within jurisdictions. Beyond convenience and cost-saving, instant payments can be lifesavers for small businesses, improving liquidity management and working capital cycles.

The European Central Bank’s Instant Payments Regulation, set to go into effect by January 2025, mandates all payment providers to offer instant credit transfers without charging a surplus for this. While security concerns around instant payments are still prevalent, especially regarding fraud and sanctions avoidance, new payment rails are implementing technology to increase security without compromising speed. Interoperability, especially across regions, is also a challenge; the second half of 2025 could see payment systems go beyond national or regional silos to bring real-time payments everywhere. 

4.  …especially across borders

Perhaps the most pressing task of the payments industry is providing cross-border payments that are cheap, safe, and fast for businesses and individuals. Cross-border payments power today’s economy: from remittances that support families and keep local economies alive in many developing countries, to moving £26 trillion between exporters and importers around the world, to enabling international capital flows and foreign direct investment, international payments are crucial to keep the world economy going. 

With the rise of e-commerce and a growing trade industry, it is even more important for international payments to be up to the task. Cross-border payments are complicated by different legislations and standards across jurisdictions, fluctuating exchange rates, and concerns over sanctions and money laundering. This can make transferring money across borders expensive, unpredictable, and slow. 

Payment providers are focusing on this issue and exploring solutions, like expanding real-time payment networks and leveraging technology to avoid lengthy security checks for international payments. To simplify payments in emerging markets, some providers are expanding their local clearing networks and shifting to local currency networks, removing exchange rate volatility and simplifying compliance. The results of these efforts will come to fruition in the coming months.

5.  The ISO20022 revolution

Perhaps one of the most widely discussed changes that is finally set to go into effect in 2025 is the migration to ISO20022, SWIFT’s new universal messaging standard for payments. While more and more institutions are adopting it in the first months of 2025 and some, like the Eurozone and the Federal Reserve, have already integrated it into their products, the hard deadline of November 2025 will be the final push for many to adopt the new standard. 

ISO20022 is expected to revolutionise cross-border payments, driving integration across institutions and jurisdictions and standardising processes for credit transfers. The new standards provide for richer data collection, decreased costs, and faster transfers.

By 2026, an estimated 87% of all global high-value payments will be made using ISO20022, meaning 2025 will be a crucial turning point for adoption and adaptation of the new standard.