As we know, the payments and fintech landscape is set for another transformative year, with rapid technological advancements, regulatory shifts and changing consumer expectations shaping the future of retail banking.
7 fintech and payments trends
A new report highlights seven key payments trends that will significantly impact financial institutions, requiring proactive adaptation to stay ahead of the competition.
From Apple’s NFC policy shift to the rise of virtual cards in B2B payments, the growing dominance of behavioural biometrics, and the expansion of “glocal” payment strategies, banks must prepare for a rapidly evolving ecosystem.
Meanwhile, regulatory developments like PSD3 and PSR1, increasing scrutiny of Banking-as-a-Service (BaaS), and the rise of sustainable fintech will reshape operational priorities.
Here’s a closer look at the seven fintech and payments trends defining 2025.
Digital Wallet Competition Heats Up with Apple’s NFC Shift
As reported by Payments Cards & Mobile, major shake-up is coming to the digital wallet market in 2025 as Apple officially opens its Near-Field Communication (NFC) ecosystem to third-party providers.
This long-awaited move follows regulatory pressure in the EU and other global markets, enabling competitors like PayPal, Google Wallet and Samsung Pay to expand their contactless payment offerings on Apple devices.
This change presents both a challenge and an opportunity for banks.
Traditional financial institutions must develop their own digital wallet solutions or risk losing market share to fintech and Big Tech rivals.
Credit card providers may also leverage the policy shift to launch branded wallet solutions, while retailers could transition from QR-based payments to NFC acceptance.
The race is on for banks to establish issuer-specific wallets to keep customers within their ecosystem and retain transaction revenue streams.
Virtual Cards to Revolutionise B2B Expense Management
The adoption of virtual cards is accelerating, offering a secure, efficient and cost-effective alternative to traditional corporate expense management.
By providing instant issuance, customisable spending controls, and enhanced transaction tracking, virtual cards reduce fraud, eliminate manual processing and enhance financial visibility.
A key statistic underlines the trend: Virtual cards will account for 4% of global B2B payment value in 2025, surpassing cash and checks for the first time.
Large enterprises stand to benefit significantly, automating expense management workflows while improving security against unauthorised spending.
Behavioural Biometrics to Enhance Passive Authentication
As fraud tactics become increasingly sophisticated, behavioural biometrics will play a crucial role in passive identity verification in 2025.
Unlike traditional authentication methods, behavioural biometrics analyse keystroke patterns, swiping behaviour, mouse movements and device orientation to create unique user profiles.
Financial institutions will integrate these capabilities to strengthen Know Your Customer (KYC) compliance and mitigate fraud risks, particularly in the account-to-account (A2A) payment ecosystem.
Combining behavioural biometrics with static verification methods like facial recognition will enhance fraud detection without compromising the user experience.
“Glocal” Payments Gain Traction in E-commerce
With the global e-commerce market projected to reach $11.4 trillion by 2029, businesses must adopt “glocal” (global + local) payment strategies to remain competitive.
Consumers increasingly favour local payment methods over traditional card-based transactions, with solutions like Pix in Brazil and UPI in India dominating their respective markets.
To support seamless cross-border transactions, merchants will leverage Payment Orchestration Platforms (POPs) that dynamically route payments based on cost efficiency, authorisation rates and currency conversion needs.
These platforms will enable businesses to offer diverse localised payment options while optimising global payment flows.
RegTech Advances Amid Rising BaaS Compliance Scrutiny
The Banking-as-a-Service (BaaS) sector has faced increased regulatory scrutiny, with compliance challenges forcing many providers to reassess risk management strategies.
In response, RegTech (Regulatory Technology) solutions will see accelerated adoption in 2025, helping financial institutions streamline compliance processes.
New regulations, including enhanced oversight of middleware providers and third-party risk management requirements, will shape the evolution of the BaaS industry.
Financial institutions will turn to automation, real-time monitoring and AI-powered compliance tools to reduce regulatory burdens and improve fraud detection capabilities.
Banks Must Prepare for PSD3 and PSR1 Compliance
The Payment Services Directive 3 (PSD3) and Payment Services Regulation 1 (PSR1) represent the next phase of Open Banking in Europe, introducing stricter API quality standards, security measures and enhanced consumer protections.
Banks will need to invest in Open Banking infrastructure to remain compliant while ensuring seamless integration with third-party services.
Additionally, account-to-account (A2A) payments will gain prominence as banks seek to reduce reliance on card networks and create more direct payment pathways.
The increased regulatory oversight will also drive collaboration between banks and fintechs, fostering innovation in embedded finance and real-time payments.
Sustainable Fintech Will Become a Competitive Advantage
Despite the current about turn at a government level, environmental, social and governance (ESG) factors will continue to gain prominence and sustainability-driven fintech solutions will emerge as a key differentiator for banks in 2025.
Consumers still expect financial institutions to integrate carbon footprint tracking, micro-offsetting and climate-conscious investment tools into their digital banking offerings.
Leading fintech firms are already embedding green finance initiatives into payment solutions, such as automated carbon offsetting for transactions or enabling businesses to fund sustainability projects through checkout integrations.
Banks that prioritise ESG innovation will strengthen customer loyalty and align with regulatory expectations surrounding climate-related financial disclosures.
How Banks Should Prepare for 2025’s Fintech Revolution
Banks must proactively embrace wallet competition, integrate AI-powered fraud detection and adopt “glocal” payment strategies to remain competitive in an increasingly digital-first world.
Regulatory compliance will be a defining challenge, requiring investment in RegTech, PSD3 compliance and Open Banking infrastructure.
Meanwhile, sustainability-focused fintech solutions will drive differentiation, meeting the rising demand for ethical and environmentally responsible financial services.
By leveraging new technologies and fostering strategic partnerships, banks can successfully navigate the next era of fintech disruption while maintaining market relevance.
The post 7 fintech and payments trends reshaping retail banking in 2025 appeared first on Payments Cards & Mobile.