back Back

4 Critical issues the payments industry must solve in 2025

By Gloria Methri

January 21, 2025

  • Compliance Regulatory
  • Cross Border Payments
  • Digital assets
Share

AI Payments, Digital Payments, Secure Payment Rails, Payment Processing, PayTech, FinTech, UKThe payments industry enters 2025 with a host of challenges that will shape its future, as outlined by the Electronic Transactions Association (ETA), for the payments industry. With over $47 trillion processed annually in purchases and peer-to-peer payments, the stakes couldn’t be higher. From harnessing AI to enhancing privacy, these issues demand immediate attention.

Here are the four critical challenges identified in ETA’s 2025 public policy agenda:

1. Harnessing AI While Protecting Consumers

Artificial intelligence (AI) has revolutionised the payment landscape, improving security, reducing fraud, and enhancing the consumer experience. However, as the ETA highlights, deploying AI responsibly is an urgent challenge.

Key hurdles include:

  • Establishing consistent definitions for AI technologies.
  • Creating regulations that complement existing frameworks without stifling innovation.
  • Addressing biases in AI systems to ensure fairness for all consumers.

Without clear guidance, the transformative power of AI could be overshadowed by fragmented regulations and consumer scepticism.

2. Regulating Digital Assets Without Stifling Growth

Digital assets, including stablecoins, are redefining how value is transferred and stored. Yet, their rapid adoption has outpaced regulatory frameworks, leaving consumers and businesses in uncertain territory. The ETA advocates for a regulatory framework rooted in five principles:

  • Proper classification of digital assets.
  • Risk-based, tailored regulations.
  • Comprehensive consumer protections.
  • Harmonisation with existing laws.
  • Support for responsible innovation.

These steps are crucial to ensure digital assets can fulfill their potential in driving financial inclusion and cross-border efficiency.

3. Strengthening Privacy Amid Growing Data Concerns

The payments ecosystem depends on consumer trust, which hinges on robust privacy protections. With increasing volumes of sensitive data processed, privacy breaches are a growing concern. The ETA underscores the importance of:

  • Advocating for harmonised, principles-based privacy laws across jurisdictions.
  • Balancing innovation in fraud prevention with stringent data protection.
  • Educating consumers about data usage and safeguards.

By prioritising these measures, the payments industry can safeguard consumer trust and support innovation.

4. Making Open Banking Secure and Inclusive

Open banking promises to empower consumers with greater control over their financial data while fostering innovation. However, as the ETA points out, achieving these goals requires overcoming key barriers. Critical tasks include:

  • Crafting comprehensive policies to ensure security and interoperability.
  • Encouraging public-private collaboration to drive open banking adoption.
  • Addressing inclusivity to safeguard the benefits extend to underserved communities.

Without proactive measures, open banking’s transformative potential may remain underutilised, leaving many consumers and businesses behind.

As highlighted by the Electronic Transactions Association (ETA), the payments industry’s ability to address these four critical challenges will determine its trajectory in 2025. Collaboration, innovation, and a focus on consumer trust are paramount to navigating these complexities. In doing so, the industry can ensure a secure, inclusive, and innovative payment ecosystem that benefits all stakeholders.

Previous Article

January 21, 2025

Plumery launches Digital Lending to fast-track loan disbursements

Read More
Next Article

January 22, 2025

MobiKwik joins forces with Piramal Finance to offer personal loans

Read More






IBSi FinTech Journal

  • Most trusted FinTech journal since 1991
  • Digital monthly issue
  • 60+ pages of research, analysis, interviews, opinions, and rankings
  • Global coverage
Subscribe Now

Other Related News

February 13, 2025

Revolut enters Ukraine, launches special edition Clear Sky card

Read More

February 13, 2025

Tabby raises $160m Series E at $3.3bn valuation ahead of IPO

Read More

February 13, 2025

Indian payments startup ToneTag nets $78m in Series B2

Read More

Related Reports

Sales League Table Report 2024
Know More
Global Digital Banking Vendor & Landscape Report Q4 2024
Know More
NextGen WealthTech: The Trends To Shape The Future Q4 2023
Know More
IBSi Spectrum Report: Supply Chain Finance Platforms Q4 2023
Know More
Treasury & Capital Markets Systems Report Q4 2024
Know More