By Tatiana Sokolova
The payments sector is a key enabler of international commerce and business growth. Through the integration of new technologies into payment rail systems, merchants are able to tap into new consumer markets in regions that are growing at pace. The success of this movement stems from the work of payment service providers.
There are now thousands of payment service providers who are radically transforming how cross-border transactions are managed. For merchants, these providers offer them a cost-efficient, secure and tailored service which effectively projects their offering to a global stage.
The COVID-19 pandemic triggered the rapid adoption of digital payments. Since then, the payments sector has continued to grow, with impressive projections on the horizon. According to a report from ResearchAndMarkets.com, the global payments market is expected to be valued at $4.78 trillion by 2029, maintaining a compound annual growth rate of 10.5%.
Based on SPAYZ.io’s activities in 2024, we can see that the coming 12 months will be defined by a series of new trends that will shape the future of the payments sector. One of these is Open Banking.
Open Banking has been around as a concept for over the last 40 years, yet it has only been in the last decade following a wave of regulatory reforms, that we have witnessed the process come into practice. At its core, it facilitates the sharing of customer data and their financial detail securely between banks and authorised financial entities. It is facilitated through licensed third-party providers via API interfaces that require customer consent, and removes the need for a card network to be used.
In one respect, market adoption of Open Banking looks positive. Statistica reports that Open Banking customers in Europe will reach approximately 64 million users in 2024, which represents a 400% increase on numbers recorded in 2020. However, when we consider this number as a proportion of the entire European population, this figure equates to less than 10%.
There are two reasons for this. First, the level of general consumer and business knowledge around this form of payment is limited. There is a level of risk involved in data sharing and data transfer, which can make people nervous. Second, there are bigger questions over the levels of protection provided at a regulatory level, particularly as this is a fairly new form of technology.
This is set to change in 2025. The US recently revealed new rules related to Open Banking which will make it easier for consumers to switch between financial service providers and transfer data. The EU is also actively considering a new directive – Payment Services Directive 3 (PSD3) – that aims to strengthen the European payments market through policies on competition, consumer protection, innovation and security. As these regulatory moves progress, they are likely to promote wider consumer awareness and adoption of Open Banking in the next 12 months. Open Banking regularly featured in our discussions, demonstrating the growing significance of the technology in 2025.
Another trend we’re likely to see across the payments sector. Market discussion around AI is rising as we witness the rollout of new, innovative technologies which can rapidly process data and take on time intensive tasks. Major players are aware of the disruptive role AI will play. Visa has invested over $3 billion on AI and data infrastructure, resulting in advancements in new areas including Generative AI.
It is still not properly known what impact AI will have on the financial sector. While there is an appetite for adoption, there are bigger questions surrounding its appropriate use and the risks involved in its integration with existing platforms.
In the payment space, we will see more payments companies exploring how AI can be integrated across the full range of services on offer. An optimal area for AI adoption is the prevention of fraudulent activities and enhancing the overall technological security of the payments platforms. In addition, it can reduce fraudulent activities to reduce chargeback cases, enhance the overall processing of payments and reduce the risk of payments failing to complete.
According to research from Payabl., 63% of merchants see security and fraud detection as the main challenge in 2025. As a result, nearly two-thirds (65%) plan to invest in AI over the next 12 months for real-time fraud detection.
The success of AI will be determined by experimentation in the payments sector. The key, however, is not to rush. AI can deliver significant benefits for the payments sector but companies should not see it as a silver bullet solution. AI can solve predetermined problems, but is not a solution in and of itself. For example, the use of chatbots to provide responsive and tailored customer advice is growing in popularity. However, the successful rise of the payment sector is a result of human networks and tailored solutions from payment professionals who are experienced and experts.
We will see the discussion around AI in the payments sector grow over the next 12 months, with payment service providers integrating different technologies into their platforms. While positive, the discussion will also need to focus on the importance and value of human-centric engagement with merchants and clients.
Open Banking and AI represent disruptive forces within the payments sector, offering new opportunities to enhance security, efficiency, and customer engagement. However, widespread adoption hinges on overcoming challenges related to consumer education, regulatory clarity, and responsible technological integration. As these barriers are addressed through thoughtful legislation and innovation, the sector will likely experience even greater expansion and global reach.
Looking ahead, 2025 can be a defining year for the payments sector. It will be down to payment service providers to willingly embrace new technologies, expand to new markets, and ensure the interests of their clients is the top focus. By combining advanced tools like AI with the expertise and insight of payment professionals, service providers can deliver tailored, secure, and reliable solutions to a diverse global clientele.
About the Author
Tatiana Sokolova is the Head of Marketing at SPAYZ.io, a leading Payment Service Provider specializing in cutting-edge payment solutions for high-demand industries. With expertise in marketing and brand positioning, she drives growth through impactful campaigns and partnerships, enhancing global brand recognition. Her leadership consistently delivers measurable success.
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