Singapore, December 23, 2024 – As the global payments landscape evolves at an unprecedented pace, Mastercard has revealed its predictions for the ten key trends that will redefine the industry in 2025 and beyond. These insights reflect the company’s commitment to advancing secure, inclusive, and innovative financial solutions that meet the ever-changing needs of consumers and businesses worldwide.
1. Embracing AI to Tackle Emerging Threats
Cybercriminals are currently utilising generative AI to generate deep-fake videos and uber-personalised phishing messages in order to acquire data or money. It is anticipated that cybercrime will increase to $10 trillion annually by 2025. Companies are training AI models to predict and neutralise threats in real time, but this weapon is also a tool. Mastercard’s Decision Intelligence Pro employs generation AI to scan 1 trillion data points in less than 50 milliseconds to determine whether a transaction is likely to be genuine or not. This process increases fraud protection rates by an average of 20% and as much as 300% in certain cases. In the United Kingdom, Mastercard’s Consumer Fraud Risk solution employs artificial intelligence (AI) to identify legitimate payment schemes and prevent them from obtaining funds from the victim’s account.
2. Elevating Small Businesses with Digital Empowerment
The small businesses that endured and, in some cases, prospered during the pandemic were frequently those that promptly adopted electronic payments, e-commerce, and other digital interfaces. Yet, an online presence is merely the top of the iceberg. Small businesses are now able to access a diverse array of digital tools and services that were previously unavailable or dispersed across numerous platforms, making them challenging to manage. Centralised platforms that are specifically designed to meet the requirements of small businesses are enabling proprietors to automate administrative tasks and develop personalised marketing and loyalty campaigns. These platforms provide data-driven insights to assist in decision-making.
3. Driving Financial Inclusion Through Digital Wallets
In developing and emergent markets, digital wallets are increasingly serving as bank accounts and attracting the vast majority of consumers and businesses. Although these digital wallets are directly addressing unbanked populations by providing simple, convenient, and affordable experiences, there has been a disconnect in the connection of traditional, card-based payments for international consumers. Mastercard Pay Local was introduced to address this issue by enabling cardholders to connect their credit or debit cards to a local digital wallet. This enables them to shop at merchants without the need to establish or replenish a prepaid account. Digital wallets will continue to develop into comprehensive platforms that integrate payments, identity, loyalty, and even health care, providing a crucial method for individuals to manage their daily lives. Leaders will be those who establish ecosystems that are intuitive and interoperable.
4. Transforming Identity Verification
The digital economy is built upon the foundation of a trusted identity, which allows individuals to interact with complete confidence at their convenience. Authentication is already being exponentially enhanced throughout the consumer journey by biometrics, machine learning, and identity insights. This is being driven by the adoption of passkeys, which are passwordless authentication methods that are typically fuelled by the biometrics of the user. This trend is expected to continue to gain momentum in 2025. Digital identity will begin to influence experiences in public services, education, and health care. Individuals will be able to selectively share their identity with anyone without any friction while maintaining privacy. For instance, Mastercard is introducing a service in Europe that enables merchants to confirm that a consumer fulfils the requirements to purchase specific goods or services using their payment card, without the need to upload documents.
5. Accelerating B2B Payment Transformation
Businesses have been sluggish to adapt to the digital world in terms of corporate payments; however, this is changing as they recognise the advantages of virtual cards, which are temporary card numbers that are randomly generated and associated with a funding account that has an established line of credit. It generates automated reconciliation, which reduces human error and provides companies with real-time data insights and increased expenditure control. Businesses can more effectively manage costs, prevent fraud, and make real-time payments by integrating payments into enterprise resource planning software. In 2025, the entire market for embedded finance for small businesses could be worth up to $124 billion. The potential for these enterprises is limitless, ranging from digital wallets and customer loyalty applications to accounting software and purchasing cart platforms.
6. Redefining Consumer Checkout Experiences
In the Mastercard network, contactless payments now account for over two out of every three in-person purchases, solidifying their position as a technology that facilitates secure and rapid consumer payments. However, the technology encompasses more than just the act of a consumer tapping their phone or card in a store. The Tap on Phone technology, which transforms any device into a payment acceptance terminal, is already democratising acceptance for merchants, ranging from solopreneurs to larger retailers. This technology reduces the necessity for complex transaction infrastructure and shortens wait times, among other benefits. As physical and digital experiences continue to merge, we will observe an increasing number of applications of tapping technology in a variety of commerce use cases, such as instantaneously adding your card to your mobile wallet, sending money to friends and family, or verifying a transaction.
7. Expanding Real-Time Payments for Global Commerce
Real-time payment systems are currently accessible in over 100 countries, and it is anticipated that 575 billion RTP transactions will be conducted by 2028, which accounts for 27% of all electronic payments worldwide. The availability of real-time payments is expanding the range of payment and receiving methods available to consumers. Cross-border payments will become more seamless as countries integrate their domestic schemes. Additionally, the facilitation of transactions between central bank accounts and digital currency accounts will be facilitated by the increased interoperability between real-time payments and other payment methods, including central bank digital currencies and digital assets.
8. Fostering Collaborative Ecosystems
The world is so interconnected, and technology is evolving so rapidly that success can no longer be achieved in isolation. Partnerships are transitioning from mere tactical alignments and agreements on paper to genuine collaborations that co-create solutions and accelerate large-scale innovation. Fintechs, governments, corporations, and financial institutions are integrating technologies to improve experiences, unleash value, and drive efficiencies. In particular, fintechs will continue to be instrumental in the simplified provision of financial services and the provision of integrated and accessible tools that enhance the advantages of the digital economy and establish trust.
9. Integrating Blockchain Technology
The transformative potential of blockchain and digital assets to improve global finance and commerce systems has been demonstrated by their maturation in recent years. Cryptocurrencies, stablecoins, and tokenised assets have transitioned from concept to commercialisation, particularly in terms of their potential application to tangible assets. Invest in blockchain technology in 2025 to improve the speed, security, and efficacy of commercial and B2B payments. In order to develop more secure and efficient payment solutions, it will continue to necessitate strategic partnerships with financial institutions and crypto natives.
10. Growing the Token Economy
Tokenisation is essential to Mastercard’s objective of eliminating manual card entry by 2030, and it is currently facilitating the adoption of in-car commerce (pun intended). However, its potential extends far beyond card payments. For instance, using tokenisation technology, consumers can share their purchasing habits and preferences with merchants on digital platforms in order to access more pertinent offers and discounts, all without disclosing their personal information. The digitisation and optimisation of any economic activity, including capital markets, trade finance, and the exchange of a land title or a carbon credit, can be achieved through the tokenisation of assets through blockchain technology.
A Vision for the Future
Mastercard’s analysis underscores the company’s proactive approach to addressing the challenges and opportunities of a rapidly evolving payments landscape. From empowering small businesses to integrating cutting-edge technologies, Mastercard is committed to shaping a future where financial services are more secure, inclusive, and efficient.
For more insights and details, visit Mastercard’s newsroom: Mastercard Newsroom.
