Key payments industry predictions for 2025

Dear Customer,

Firstly, I want to wish you a happy New Year. I hope you all had an enjoyable Christmas period.

For my opening column of the year, I would like to discuss three key predictions that will shape the payments industry in 2025.

My first prediction is that the National Payments Vision (NPV) will be a success. NPV aims to enable industry and governmental collaboration to ensure the UK has a fit-for-purpose payments ecosystem.

Over the next 12 months, banks and PSPs will have to review and improve, incrementally, their technological solutions in order to deliver the Vision.

In terms of your customers, NPV will mean that banks and PSPs must address account-to-account payments as an alternative to card payments, especially for commerce situations, such as the paying of domestic bills.

In summary, NPV implementation means dealing with agile-driven change. If banks and PSPs haven’t got the right experience and technical skills in place, then look for scaled tech partners that can help.  

My second prediction is that tackling fraud in 2025 remains a pressing concern for banks and PSPs. In the UK, the key focus will be identifying next steps needed to further tackle APP fraud. To do this, banks and PSPs will have to work together – whether they like it or not.

Looking at the US market, I think we will see an increase in account-to-account, real-time payment fraud. Key to addressing this challenge is to take learnings from how fraud is being tackled in UK and European card ecosystem markets.

My third prediction is that banks and PSPs need to be ready for new, tougher industry regulation. The big news in the UK is that the New Payments Architecture (NPA) is now dead in the water. It is likely to be replaced with the National Payments Vision. Arguably, the Vision can deliver better outcomes than NPA ever could.

In Europe, the Verification of Payee (VoP) activity should be a key focus. My advice to you is to get up-to-speed in preparation of VoP’s Scheme Rulebook and its API Specifications, with both going live in early October 2025.

Banks and PSPs will also need to secure their IT supply chain in light of the Digital Operational Resilience Act (DORA). Banks and PSPs looking to be DORA-ready should look for third party support if they haven’t got the resources needed in-house.

Finally, I think regulators will demand banks demonstrate better resilience in their payment processes, to thwart criminal activity in 2025. The way to improve resilience is to audit legacy tech estates. Be honest – if it isn’t working, then fix it.

In summary, if we can help you with the National Payments Vision implementation or regulatory changes, please get in touch for advice.

I wish you all the very best with your business endeavours this year.

Written by

Mike Walters
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Mike Walters Chief Executive Officer

Mike was appointed CEO in October 2023, having joined Form3 as CPO and co-founder in 2016. During his roles as CPO he was responsible for strategy, product development, product management as well as strategic initiatives, playing a key role in the business’ funding activities and key client relationships.

Prior to Form3, Mike held senior Product roles within Barclays:
As Product Director for Barclaycard Payment Acceptance (card acquiring) he was a member of the Executive Committee and responsible for P&L, product management, strategy development, vendor selection and management, digital transformation and M&A.
As Head of UK Corporate Payments for Barclays Corporate Bank, Mike held product management responsibility for all payment, receipting and reporting products delivered to Barclays corporate clients – this included defining the Barclays Corporate Bank mobile payments strategy and initiating, building and scaling multi-award winning mobile payment solutions. Earlier in his career he managed client relationship teams responsible globally for the North American Financial Institutions and FTSE 250 sectors providing him with significant product and enterprise client experience domestically and internationally.