Updated Jan 22, 2025
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Whether it’s paying for our weekly groceries or our regular Netflix subscription, we all deal with payments, both incoming and outgoing, daily. Banks and financial institutions continue to look for new ways to improve the payment process, to attract new customers. And then there are innovative technologies like blockchain, cryptocurrency, and AI that directly and indirectly affect payment processes. This all means that the payment processing industry is a fast-moving one.
2025 is likely to continue to see the advance of blockchain and AI, as well as a rise in super apps that incorporate payments, as well as some other improved payment systems.
Instant payments are desirable for consumers as well as retailers and other businesses. They’re popular in commerce because it means stores get their money sooner and can send items to shoppers. Fast withdrawal casino sites are also proving more popular than traditional online casinos because, through their use of digital wallets and cryptocurrency payments, they can give players access to their betting deposits and winnings withdrawals sooner.
This move towards instant payments will likely continue in 2025, especially as financial institutions start to implement blockchain and other technologies that speed up the entire remittance process.
With the move towards digital currencies and cryptocurrency, it is easy to overlook the continued importance of traditional payment methods. While many people think of their bank card or credit card when they think of paying by the bank, the pay-by-bank system enables the user to pay money directly from their account to the recipient without using a card to do so.
The use of banking apps and the integration of open banking technologies means that this style of payment is gaining a little momentum, although it remains surprisingly niche. It will likely continue to pick up steam in 2025, especially if it is backed by moves towards CBDCs.
Central Bank Digital Currencies, or CBDCs, are major banks and governments’ takes on cryptocurrencies. They will be developed on some form of digital ledger, potentially even the blockchain, and they will be the digital equivalent of primary currencies. Like cryptocurrencies, they won’t be backed by any asset other than the value assigned to them by the governing bank.
Many central banks and local governments are known to be investigating CBDCs, and there will likely be significant movement in this area in 2025, especially following Donald Trump’s inauguration and the changing of the SEC Head in the US.
CBDCs are being introduced in response to the advent and continued growth of cryptocurrencies. Cryptocurrencies were introduced in 2009, with the launch of Bitcoin, although it did take a couple of years for the digital currencies to gain prominence. Cryptocurrency offers virtually instant payments even across borders. It is secure and private, and because it is established on smart contracts, entire remittance and payment processes can be automated to further facilitate fast and simple transactions.
Following Donald Trump’s election victory, it seems highly likely that the US will regulate cryptocurrency which will likely see other economies follow, and cryptocurrency’s rise will continue.
Many of cryptocurrency’s benefits come from its use of blockchain, which is the digital ledger technology that underpins digital currencies. Blockchain has also found other uses, especially in the formation of decentralized apps and other fintech applications, while certain crypto companies are attempting to create a bridge between traditional payments and modern, crypto payments.
Even where cryptocurrency itself isn’t directly used, we can see its influence, and this will continue to grow with the emergence of CBDCs and blockchain’s integration into existing financial networks.
Payment apps and digital wallets continue to provide popular alternatives to traditional finance. They are fast, and convenient, and most of us have access to at least one digital wallet thanks to their installation on cell phones and smartphones.
As well as payment apps, we are seeing an increase in super apps like Alipay. These combine the features of digital wallets with those of social media, messaging, and even e-commerce apps. They enable us to do virtually everything from a single app. There are reports that Meta wants to become a super app, and Elon Musk has attempted to rebrand X as an everything app. Super apps will continue to grow in popularity, and potentially in the ways they are used.
Like blockchain, artificial intelligence is a disruptive technology. It has massive potential to change the way we live and the way we interact with the world around us. It is already being used in big data, and there isn’t much bigger data than in the finance industry.
AI can be used to speed up payment processes and to facilitate faster and more intelligent payments. Not only businesses, but entire industries, are investing big money in AI so it will see continued growth in the coming years.
No matter the payment method, or the speed of payments, one of the most important factors for users is security. Unfortunately, security will always be an issue when it comes to payments, and this is especially true of instant payments.
Traditional payment methods like credit card and debit card payments have delays as financial institutes and card issuers run various checks to ensure payments are legitimate and not fraudulent. There is a lot less opportunity to perform these checks with instant payment, which means companies will continue to look for ways to offer improved payment security levels.
The payment industry continues to innovate. The emergence of CBDCs, blockchain payment solutions, and AI has seen payment methods evolve significantly in recent years. The use of digital wallets and instant payment apps has become relatively commonplace, and while cryptocurrency payments are less common, they too are gaining prominence, thanks especially to how quickly payments can be processed.
2025 will see further developments in all of these areas, along with greater prominence of super apps that combine payments with other features.