Development Prospects for the Payments Sector: An Analysis
The payment industry is undergoing a transformative period, with digitalization, regulation, and cybersecurity shaping its landscape. A comprehensive whitepaper, published by the team at Payment & Banking, offers insights into the trends that are likely to prevail in the coming years.
The whitepaper discusses several key scenarios that could shape the future of the payment industry. These include the rapid growth of digital and mobile payments, the expansion of embedded finance and Buy Now, Pay Later (BNPL) models, and the introduction of the digital euro.
The digital payments market is projected to grow significantly, with the global market value expected to rise from USD 121.5 billion in 2025 to USD 358.8 billion by 2030. Digital wallets are gaining traction, particularly in Europe, Latin America, and the Middle East-Africa, where usage at POS and online is expected to nearly double or more by 2030.
Embedded finance and BNPL models are expected to expand beyond retail into diverse sectors such as healthcare, travel, education, and automotive, offering flexible installment payment solutions that increase consumer affordability and spending.
Regulatory frameworks will also evolve with major initiatives like PSD3/PSR, DORA, and FIDA enhancing payment service regulation, cybersecurity standards, operational resilience, and data governance. These regulations aim to address growing complexity due to innovation, cross-border payments, and integration challenges.
The digital euro will contribute to a significant shift in digital currencies, complementing crypto assets while promoting central banks’ role in digital payment ecosystems. The integration of crypto assets and blockchain technologies with regulated payment rails is expected to increase, supported by compliance frameworks like MiCA (Markets in Crypto-Assets).
Cybersecurity and AI-powered fraud prevention will become essential pillars for sustaining trust in payments. AI-driven risk management tools, including real-time authorization engines, will differentiate service providers and help combat increasingly sophisticated cyber threats in digital transactions.
Data accessibility and interoperability across platforms and jurisdictions will improve, driven by regulatory initiatives and demand for seamless payment experiences. This will enable integrated payment orchestration covering in-store, online, and in-app flows, supported by white-label APIs bundling FX, tax reporting, and settlement services.
The whitepaper also highlights Wero and other emerging payment innovations as part of the growing suite of solutions enhancing payment convenience, acceptance, and consumer engagement. However, specific future scenarios around Wero require more detailed information to define.
Overall, the payment industry’s future will be shaped by the integration of digital innovation, enhanced regulation, cybersecurity robustness, and new currencies, fostering an open, interoperable, and consumer-friendly payments ecosystem over the next decade.
The whitepaper aims to help companies prepare for various possible scenarios in the future of the payment industry, though it does not guarantee that all hopes for the future of the payment industry will be fulfilled. The team at Payment & Banking consists of founders, investors, consultants, and editors with a mission to deliver deeper insights and actively shape the industry.
These changes are causing uncertainty about the immediate future of the payment industry, but they also present opportunities for payment providers that participate in the development in a timely manner. Established business models of payment providers are being questioned, and cash is gradually losing its dominant role in the payment industry. A package of regulations is coming up for all actors in the financial system in the next two years.
The form that FIDA will take, if it is discussed, is currently unclear. However, it is expected that PSD3/PSR and DORA will permanently change the work in the payment and banking sector, with data becoming significantly more accessible to all actors in the payment industry.
[1] Payment & Banking Whitepaper (2023) - The Future of Payments: Key Scenarios and Challenges [2] McKinsey & Company (2022) - Embedded finance: The future of banking is already here [3] Juniper Research (2022) - Digital wallets to reach $15 trillion in transactions by 2030 [4] European Commission (2021) - Proposal for a Regulation on the establishment of a framework to facilitate sustainable investment (DORA)
- The whitepaper suggests that the expansion of embedded finance and Buy Now, Pay Later (BNPL) models, as well as the rapid growth of digital and mobile payments, will be key drivers in the future of the payment industry, particularly in diverse sectors such as healthcare, travel, education, and automotive.
- Regulatory frameworks, like PSD3/PSR, DORA, FIDA, and MiCA, are anticipated to evolve and shape the payment industry's landscape, enhancing payment service regulation, cybersecurity standards, operational resilience, data governance, and promoting the integration of crypto assets and blockchain technologies with regulated payment rails.
