2025 Payment Trends: Wallets & Open Banking to steal the spotlight

By Gloria Methri

The payments industry is on the cusp of transformation, with digital wallets and Open Banking poised to dominate the landscape by 2025, according to a recent survey by payabl. The findings highlight shifting consumer preferences and payment industry strategies as merchants gear up for a digital-first future.

The Rise of Digital Wallets and Open Banking

The survey shows that 81% of merchants expect digital wallets to see significant adoption in the coming years, driven by consumer demand for seamless and secure payment experiences. Meanwhile, 69% of respondents anticipate a surge in Open Banking adoption, with instant bank transfers becoming increasingly popular. Other emerging payment methods include QR code payments (33%), Buy Now, Pay Later (BNPL) options (25%), cryptocurrencies (21%), and Central Bank Digital Currencies (CBDCs) (11%).

Merchants cite consumer demand for convenience (59%), technological advancements (52%), and regulatory changes (49%) as the primary drivers behind these innovations.

Investing in the Future: AI and Data Analytics

To navigate this changing landscape, merchants are prioritising strategic investments in technology.

• 65% plan to adopt artificial intelligence (AI) to enhance real-time fraud detection and boost payment system performance.
• 56% are leveraging data analytics to gain deeper insights into payment behaviours and trends.
• 38% are focusing on API-based integrations to ensure secure, flexible payment ecosystems.

These investments are not just about staying competitive—they are aimed at addressing operational challenges while enhancing security and efficiency in payments.

Tackling Fraud and Regulatory Compliance

Despite the optimistic outlook, challenges loom large. Fraud prevention tops the list of merchant concerns, with 63% of respondents identifying it as their biggest challenge for the year ahead. Regulatory compliance follows closely at 60%, as businesses grapple with evolving payment regulations. Other significant concerns include cybersecurity risks (46%), AI integration complexities (44%), and the intricacies of cross-border payments (10%).

“Merchants are clearly focused on futureproofing their payments strategy to meet the growing demand for convenience and flexibility while tackling regulatory and fraud-related challenges,” said Ugne Buraciene, Group CEO of Payabl. “These efforts are crucial for building a resilient, sustainable payments ecosystem.”

With the SEPA Instant payment deadline set for January 9, 2025, readiness across the industry remains uncertain. Only 25% of merchants believe the sector will be fully prepared, underscoring the need for collaboration between regulatory bodies, financial institutions, and merchants to ensure a seamless rollout.

Trends Defining the Payments Industry

The survey also highlights key trends reshaping the payment landscape:

• Instant payments emerged as the most influential trend, with 57% of respondents identifying it as transformational.
• Regulatory changes, such as PSD3 and APP fraud regulations, were highlighted by 50% of respondents.
• The integration of AI and machine learning ranked high, cited by 44% as a critical industry driver.
• Open Banking (35%), BNPL (27%), and cross-border payments (25%) continue to gain traction.

Lesser-discussed trends such as embedded finance (13%) and sustainable payments (8%) also signal the diversification of the payment ecosystem. Meanwhile, cryptocurrencies and digital assets are making steady inroads, acknowledged by 19% of respondents.