Payments is a sector continually driven forward by technological advancements year-on-year, 2024 was no exception to this and neither will 2025. Everyone has a different opinion as to which technologies have and will have the most impact, however.
In part one of a three part roundtable, Payment Expert speaks to senior figures from travel payments provider Swiipr, embedded finance specialist Toqio and payments processing company Blink Payment. The views on what technologies will define and drive payments forward in 2025 are as varied as these companies, specialities and target sectors.
Payment Expert: How do you anticipate merchant payment ecosystems to evolve in 2025? What technologies do you think will drive this?
Ian Clowes, Co-Founder and Chairman of Swiipr: From a high-level perspective, I believe merchant payment ecosystems are moving away from hardware towards cloud-based systems. SoftPOS is gaining in popularity and while card terminals aren’t going to disappear overnight, there’s likely to be a significant further migration to SoftPOS in 2025.
A lot of people and businesses are going to move further into cloud-based environments more generally. Many people think everyone’s on the cloud, but in reality, that’s not always the case and many businesses still have work to do in this area. It’s quite a big process to move fully into the cloud and there are a lot of challenges on the technology front.
Players in the acquiring space will also continue the trend of increasing the scope of product they sell into merchants to increase their share of wallet and leverage customer data.
Eduardo Martinez, CEO and Co-Founder of Toqio: Given the macroeconomic climate, we think there could be a move towards more local payment options, or at least a push to offer these alongside global options.
This is largely because rising protectionism and the stronger dollar we are currently seeing could create complex challenges for global supply chains and cross-border commerce. In response, companies will leverage local payment solutions, offering region-specific payment options, currency hedging and real-time FX services to navigate fluctuating tariffs and currency values.
As the US and European central banks continue to lower interest rates, the cost of financing will drop, making credit more accessible and affordable. This shift will spur companies to integrate embedded finance solutions, especially embedded lending, within their ecosystems.
From retail to logistics, businesses will increasingly offer tailored, low-cost financing options directly at the point of sale, reducing friction for customers and capturing new growth opportunities.
Ari Eder, Head of Product at Blink Payment: I think network tokens, essentially a higher form of tokenisation that allows clients to move their tokens from one provider to another, are set to have a big impact on the merchant payment ecosystem. Previously, businesses were held hostage to a specific technology, but there are now more ways tokens can be migrated to other players.
This feeds into the drive for decentralisation we’ve been seeing and that we expect to drive the evolution of the marketplace next year. Businesses in the payments sphere are increasingly becoming comfortable using other platforms’ technology and there’s a recognition that providers can’t necessarily own the entire payments journey. Merchants no longer want to be tied into a specific vendor; they want the flexibility to integrate other features into their existing offerings.
On a broader scale, we’re seeing a trend towards solutions that bring together as much as possible for businesses and this includes payments. As well as wanting to offer a wide variety of payment options, many merchants now want this to be facilitated via an independent software vendor that performs other functions for their business, for example, customer relationship management.
Many businesses today want as many of their providers as possible to work together to provide integrated, cloud-based solutions that streamline all of their business operations, including payments.
PE: Which technologies will have the biggest impact on payments processing over the coming months?
Ian Clowes: The penetration of Open Banking is going to increase exponentially in future. While it’s been around for some time and has been hyped as the next big thing before, the driving factor is that now interested parties are properly investigating ways to commercialise it.
While it’s always been great for end-user businesses because of the lack of charges, there’s been no real incentive for payments providers to become heavily involved in it. This is because there has been no way for them to profit from it, whereas with card payments both acquirers and banks take a percentage of every payment.
However, there are now considerable discussions taking place with infrastructure providers on setting fees for Open Banking, albeit lower fees than for cards. It’s a great solution, so if the business side can be worked out, it has huge potential.
Eduardo Martinez: We think there is going to be a broader adoption of fintech technology that supports B2B embedded finance products by large corporations. As enterprises of various sizes across different sectors seek better ways to manage payments and working capital for their merchant ecosystems, embedded finance is set to become a revolutionary force in business-to-business (B2B) commerce, in a similar way to how it has impacted the B2C world.
This more tech-driven approach will not only boost revenue growth, but also simplify regulatory compliance, particularly in areas like onboarding (KYC/KYB) and automated reconciliation. Additionally, it will drive performance enhancements across the board, including optimised payment flows that reduce card declines and rescue lost transactions.
AI will, of course, continue to be a key focus area next year, including in the area of fraud detection and prevention, risk management and KYC. Furthermore, mobile wallets and contactless payments – while no longer brand-new technologies – will continue to gain traction next year. Industry forecasts suggest that half of the world’s population will be using mobile wallets by next year.
Ari Eder: We think Tap to Pay will have a huge impact. Whilst initially marketed at tradespeople, micro businesses and mobile businesses, I expect to see lots more solutions making use of Tap to Pay technology.
More widely, we’re seeing a trend towards all-in-one devices, and we think this trend will continue to develop further. We don’t expect employees to use their mobile phones to accept payments, rather they will have access to a device that enables payment acceptance, and POS, on a single device.
This also ties in with the drive by POS providers to move away from maintaining hardware for their customers and move towards becoming licensed SaaS-based software providers, offering cloud-based products that run on a merchant’s device.
PE: Conversely, looking back over the past 12 months, which technologies have made the biggest impact in 2024 and do you expect this to continue or change?
Ian Clowes: While Apple Pay and Google Pay have been around for some time, the use of these and other wallets has really picked up over the past 12 months. In turn, this has driven an increased take-up in virtual cards of all types.
The trend away from the previous reliance on physical cards looks set to continue to gather pace, and it could be developed much further over the next year or so. One area where I see potential is in app provisioning, which is a system that’s been trialled that allows small payments to be given to people virtually without them needing a card and without them even needing to download an app.
Eduardo Martinez: We’ve seen a rise in the use of digital wallets such as Google Pay and Apple Pay. These have become increasingly popular in the B2C space, but this year we’ve also seen digital wallets become more utilised in the B2B world and we expect this to accelerate.
We also anticipate that the increased focus we’ve seen on regtech will continue. New compliance challenges are continually emerging in many parts of the world, with stricter requirements for AML, KYC and sanctions adherence.
Regtech is the natural basis for all other fintech development. If a company is not legally compliant it cannot move forward with a fintech offering.
Ari Eder: Generally, 2024 was something of a year of catch-up on the technology front. At the start of the year, there were a couple of tech-first payment providers that were head and shoulders above a lot of the other players in the market, but the playing field has levelled out to an extent over the year.
2024 was more evolution than revolution in terms of specific technologies as well. For example, virtual payment cards are not new, but 2024 did see a big increase in the adoption of technologies such as Apple Pay and Google Pay. We expect adoption of existing technologies to continue and we also believe virtual cards will become more prevalent in the B2B world.
There was also a big increase in the number of opportunities to make card payments and payments in general. EV chargers being used for payments was one example of how the landscape moved further away from static retail payments towards more mobile payment methods.
One technology that didn’t get the traction expected in 2024 was Open Banking. Despite the industry’s efforts to push this system forward and its clear potential in terms of reducing fraud, cost and payment friction, it just hasn’t taken off yet.
It needs a much bigger push to get it into mainstream acceptance, whether that’s from the government, the industry or some other body.
The current government has introduced its National Payments Vision – time will tell if this brings about the long awaited ‘hockey stick’ growth that has been spoken about for the last few years.
