BrazilPayments Pulse: payments and fintech priorities to watch in 2025
The payments and the broader fintech industry stand at a significant turning point, propelled by the convergence of rapid technological progress, shifting consumer expectations, and an increasingly complex regulatory landscape.
Digital-first payments, open banking, sustainability in financial services, and more – the fintech landscape is changing rapidly, with a number of trends emerging for 2025. A new whitepaper from PaymentGenes explores the current state of payments, including exclusive global case studies, market data, and interviews with expert.
Real-time payments, digital wallets, and account-to-account transactions are now the norm in most financial ecosystems. For example, in Europe, digital wallets are projected to be the primary online payment method by 2030, reaching 40% of transactions.
A rundown of some of the major trends to look out for in 2025 in the fintech and payments landscape:
Digital-first payment ecosystems: The shift towards digital-first payments has solidified, with real-time payment networks like SEPA Instant and FedNow becoming very common. Digital wallets are evolving into comprehensive financial hubs, integrating loyalty programs, AI-driven personal finance tools, and ‘buy now, pay later’ options.
Account-to-account (A2A) payments are also gaining traction, especially in Europe with the rise of initiatives like Wero, which offer lower transaction costs and enhanced security for e-commerce, B2B, and cross-border transactions. Interoperability efforts among domestic card schemes in Europe aim to create a more unified regional payment ecosystem, reducing reliance on the mostly American brands (like Paypal) that have dominated this space for years.
Open finance: The transition from open banking to open finance is fundamentally altering the competitive landscape by expanding data sharing beyond traditional bank accounts to include investments, insurance, and pensions. Open finance enables sharing of consumer data to financial products and services beyond just banking (like mortgages, loans, savings, investments, and more).
Europe is at the forefront of open finance, with the EU legislation PSD3 extending data access and the EU Digital ID Wallet facilitating secure service access. The UK is leveraging its open banking success to build a broader open finance framework. In contrast, the US is witnessing more market-driven innovation in this space, with fintechs and embedded finance solutions driving adoption.
Sustainability in payments: Environmental, Social, and Governance (ESG) considerations are increasingly vital in the payments sector. Europe is leading the way in regulatory mandates promoting sustainable finance, while the US is seeing a market-driven approach influenced by consumer demand, particularly from younger consumers.
Innovations like carbon-neutral transaction options and the introduction of eco-friendly payment cards are gaining traction as both consumers and investors prioritize sustainability.
Alternative financing models face pressure: After some rapid expansion, ‘buy now, pay later’ services are now facing serious challenges. Increased regulatory scrutiny, rising interest rates impacting funding costs, and challenges in achieving profitability are forcing BNPL providers to re-evaluate their business models.
Many players in this spaces will only survive if they manage to keep up with robust risk management practices, a focus on sustainable credit practices, and can adapt to evolving regulations from the EU.
Fraud and compliance evolve: The dominance of real-time payments requires a parallel evolution in fraud prevention and compliance strategies. AI-driven fraud detection systems, the implementation of biometric authentication methods, and enhanced cross-industry data sharing are becoming essential tools to effectively mitigate the heightened fraud risks associated with instant transactions.
Fintech M&A and investments poised for revival: Following a period of decreased funding activity over the past two years, the fintech sector is likely to see a resurgence in big investments and M&A activity in 2025. Companies will likely seek strategic partnerships and acquisitions to achieve scale, enhance efficiency, and strengthen their market positions in this rapidly transforming industry.
“The payments industry is undergoing a transformation, driven by real-time payments, embedded finance, sustainability, and evolving fraud prevention strategies,” said David Nuñez, consultant at PaymentGenes. “Businesses that embrace adaptability, collaboration, and innovation will be best positioned to navigate these changes and thrive in 2025 and beyond.”
