It wasn’t too long ago that cash was the primary means of paying for most retail goods, and many personal and professional services too. Debit cards were barely a thing, credit cards were reserved for the wealthy (for the most part), and paper checks were the de facto option for payments too large to make with coins or bills.
This is no longer the way things are done, to put it mildly. In the United States today, most payments take one digital form or another, whether assisted by plastic (as with credit or debit cards) or not (as with electronic financial transfers and mobile payment apps).
Industry veterans like Steve Streit, whose venture capital firm invests in several payments companies, have watched this transformation closely over the years.
Here’s what Streit and his fellow payments experts see as what could be the top trends to watch in 2025 and beyond — and what they could mean for your business.
1. Instant Payments Are Becoming “Table Stakes” (And May Soon Be Harder to Monetize)
For the time being, offering an instant payment or transfer option for an added fee is an easy way for payment businesses to boost revenue while improving the customer experience. A classic win-win, if you will.
However, it’s not clear how long this gravy train will last. As more customers come to expect the instant (or same-day) option, and technical changes to the underlying financial architecture increase the actual velocity of interbank exchanges, payments businesses will have a harder time monetizing the feature. In fact, the time is fast approaching when offering complimentary instant transfers adds more value than charging for them.
2. Cryptocurrency Payments Are Poised for Wider Adoption If Regulation Allows
The rise of cryptocurrency payment gateways has been foretold for some time, but it’s finally here. Widespread adoption of cryptocurrency payments is likely to follow.
Or is it? Regulation remains a big question mark for crypto payments, especially in major markets like the United States and the European Union. Although many crypto experts believe (with good reason) that crypto regulation will ease over time, risk-averse payments businesses may want to hedge their bets.
3. Cross-Border Payments Are Improving, Fast
International exchange is one big present-day use case for crypto payments. But international payments denominated in traditional currencies are becoming more common as well. This is due in part to reduced friction, according to Deloitte.
Deloitte finds the fastest adoption happening in the Asia-Pacific region, but the innovations we see there are likely to gain favor in North America and Europe before long. Payments businesses focused on international markets should pay close attention to the rise of so-called payment “super-apps,” which may take market share from niche apps.
4. Privacy and Security Are Top of Mind for Consumers
Financial-grade cybersecurity is like an arms race. With so much on the line, the bad guys and the good guys are willing to pour untold resources into one-upping their opponents. Payments businesses caught in the middle — and in particular, those without the resources to manage security and privacy internally — must partner with leading “white-hat” security providers and regulatory experts to minimize risk and reduce liability in the event of a security incident.
5. Falling Interest Rates Could Mean Easier Business Credit
Now, for some good news: The lean times for payment startups that depend on venture capital funding could be drawing to a close. With interest rates expected to fall in late 2024 and throughout 2025, capital could be easier to come by and less expensive. All the more reason to preserve cash in the meantime.
6. Contactless Payments Continue to Gain Market Share
Will the credit card go the way of the $2 bill? In the not-too-distant future, it might — that is, if contactless payments’ full promise is realized. Billions have already been invested in expanding and improving the pay-by-phone ecosystem, so this seems foolish to bet against in the long run.
Final Thoughts
If you could travel back in time to 1984, you’d want to bring cash. Lots of it. Because many of the merchants you’d visit if you stayed for any amount of time — including the grocery store — probably wouldn’t know what to do with your credit or debit card.
The payment industry has changed so much in the past 40 years as to be almost unrecognizable, at least to outsiders. The industry’s behind-the-scenes “plumbing” has been a bit more stable, but that’s starting to change too as cryptocurrencies begin to make their mark.
All this is to say that the payments landscape of the future could look very different from the payments landscape of today. The hope is that it’ll be easier for consumers and producers alike to navigate, although that’s no sure thing. Until then, we can look for guidance to experts like Steve Streit — and keep close watch on changes that directly affect how we buy, sell, and use goods and services.
