ALEX ROLFE
Fintech and payments trends shaping retail banking in 2025 By Alex Rolfe , CEO at Payments Cards & Mobile
3 Behavioural biometrics will strengthen fraud prevention Static biometrics like fingerprint and facial recognition are no longer sufficient against sophisticated fraud. In 2025, behavioural biometrics will gain traction, analysing keystroke dynamics, swipe gestures and device movement to verify identity passively. By integrating behavioural biometrics with AI-driven fraud detection, financial institutions can enhance know your customer (KYC) compliance, reduce false positives and prevent account takeover fraud. 4 The rise of 'glocal' payments for e-commerce growth With global e-commerce projected to reach $11.4trillion by 2029, businesses must offer local payment options to optimise conversion rates. Consumers increasingly favour localised payment solutions like Pix in Brazil and UPI in India over traditional card-based payments. To support this shift, merchants will adopt payment orchestration platforms, which streamline multi-currency payments, reduce costs and improve authorisation rates across regions. 5 Regtech will strengthen compliance amid BaaS scrutiny Banking-as-a-service (BaaS) has faced heightened regulatory scrutiny, with compliance failures leading to stricter oversight. In response, regtech solutions will become essential, enabling banks to automate risk assessments, fraud detection and real-time transaction monitoring. With evolving regulations requiring enhanced due diligence, banks and fintechs must adopt AI-driven compliance tools to mitigate risks efficiently. 6 PSD3 and PSR1 will reshape open banking The Payment Services Directive 3 (PSD3)
The financial services industry
and Payment Services Regulation 1 (PSR1) will introduce new security requirements, API quality standards and stronger consumer protections. Banks must enhance open banking infrastructure, ensuring compliance while leveraging account-to-account (A2A) payments to reduce reliance on card networks. These regulations will accelerate embedded finance adoption, further blurring the lines between banks and fintechs. 7 Sustainable fintech will drive customer engagement Environmental and social factors are becoming critical differentiators in banking. In 2025, fintech firms will integrate sustainability-focused features, such as carbon footprint tracking, transaction-based carbon offsets and ESG-aligned investment tools. By adapting early to these trends, financial institutions can lead in a rapidly evolving payments landscape and secure long-term market relevance.
is poised for a transformative shift in 2025, driven by rapid fintech advancements, regulatory changes and evolving consumer expectations. To remain competitive, banks must embrace digital payments innovation, strengthen fraud prevention and prepare for new compliance frameworks. Here
are seven key trends that I feel will define the future of retail banking and payments in the coming year. 1 Apple’s NFC shift will disrupt digital wallets Apple’s decision to open its NFC
ecosystem to third-party providers marks a turning point in digital payments. This move will allow Google Wallet, Samsung Pay and PayPal to expand their contactless payment capabilities on iPhones, increasing competition in mobile wallets. Banks face a critical challenge – either develop their own digital wallets to retain customers or risk losing market share to fintech and Big Tech players. Retailers and credit card issuers are also expected to launch branded NFC-enabled wallets, further intensifying market competition. 2 Virtual cards will transform B2B payments Virtual cards are replacing traditional corporate expense management tools, offering instant issuance, spend limits and enhanced fraud prevention. These features improve control over business expenses and eliminate the inefficiencies of physical corporate cards. By 2025, virtual cards will account for four per cent of all B2B payment transactions globally, surpassing checks and cash for the first time. This shift will enhance security, automate reconciliation and reduce manual processing.
AT A GLANCE Alex Rolfe started his
professional career in the music industry working for Jazz FM and Hed Kandi. He then went on to a career in payments and fintech. With a background in deploying highly technical and innovative payment solutions, including early mobile banking and parking systems, as well as consulting to major payments companies and central banks he has been instrumental in shaping discussions around digital payments. Rolfe has authored numerous articles on payment technologies and trends, sharing his insights through various industry platforms.
35
THE PAYMENTS POWER 50
www.thepower50.com
Powered by FlippingBook