In this preview of a Mastercard report being released in early 2025, leaders at the card processer say that generative AI is emerging as critical to boosting fraud protection rates by as much as 300%.
In today’s digital economy, there is high demand for trusted interactions, simplicity and seamlessness. In Mastercard’s view, by 2030, consumers will no longer need to use a physical card, punch in a password or one-time code to make a transaction online. This will be due to advances in tokenisation, biometric authentication and digital wallets. Here are 10 trends that executives across the company say could impact payments in 2025 and beyond.
1. AI fraudsters will need to be outsmarted by AI
Criminals are leveraging generative AI to produce deep-fake videos and personalised phishing messages to steal money or data. However, this weapon must also be used as a tool by those in the financial services industry. Next year, companies will train AI models to predict and neutralise threats in real time. Further, generative AI must be used to scan trillions of data points to predict whether a transaction is likely to be genuine in milliseconds. This has the potential for improving fraud protection rates by as much as 300%.
2. Small businesses will need bigger toolboxes
It is evident that the businesses that survived during the Covid-19 pandemic were those that embraced electronic payments, e-commerce and other digital touchpoints. Beyond an online presence, small businesses must access digital tools and services previously out of reach. By leveraging centralised platforms tailored to their needs, small businesses will be able to automate administrative tasks and create personalised marketing and loyalty campaigns, with data-driven insights to guide decision-making.
3. Digital wallets will be connected to cards
While digital wallets are good alternatives for bank accounts and are providing convenience to unbanked populations, the disconnect in connecting traditional, card-based payments for international consumers will be resolved. In 2025, cardholders will be able to link their credit or debit cards to a local digital wallet, allowing them to shop at merchants without needing to set up or top up a prepaid account.
4. Passkeys will gain momentum
Trusted identities enable people to interact how, where and when they want, and this is bolstered by biometrics, machine learning and identity insights that are supercharging authentication throughout a customer’s journey. Passkeys, defined by Mastercard as "passwordless authentication most often powered by users’ biometrics", will give trusted identities a boost in the new year, fuelling experiences across health care, education and public services, where identity is usually shared.
5. Businesses will realise the benefits of virtual cards
Temporary card numbers randomly generated and linked to a funding account that has an established line of credit will be seen more often in the corporate payments world. Virtual cards create automated reconciliation that cuts down on human error and offers companies real-time data insights and more control over spending. By embedding payments in ERP software, businesses will be able to make real-time payments, prevent fraud and manage costs more efficiently.
6. Contactless payments will increase
Contactless payments now account for more than two out of every three in-person purchases on the Mastercard network. Tap on Phone technology, which turns any device into a payment acceptance terminal, is already democratising acceptance for merchants, reducing the need for complex checkout infrastructure and shortening wait times, among other benefits. As physical and digital experiences converge, there will be more applications of tapping tech.
7. Real-time cross-border payments will become more seamless
While real-time payments are providing greater consumer choice, as countries interlink their domestic schemes, cross-border payments will become more seamless. More interoperability is also expected between real-time payments and other forms of payment, such as CBDCs and digital assets.
8. Silos will be eradicated
Partnerships are evolving and will be possible to co-create solutions and accelerate large-scale innovation. Financial institutions, corporations, governments and fintechs are embedding technologies, driving efficiencies, unlocking value and enhancing experiences. This is expected to continue.
9. Blockchain will enhance speed, security and efficiency
Blockchain and digital assets have proved that the technology has transformative potential to enhance global finance and commerce systems. Cryptocurrencies, stablecoins and tokenised assets have moved from concept to commercialisation and in 2025, blockchain will be leveraged for B2B and commercial payments.
10. Manual card entry will be eliminated by 2030
Tokenisation and its potential beyond card payments is substantial. Tokenisation technology can enable consumers to share their shopping habits and preferences with merchants on digital platforms to access more relevant offers and discounts, all without revealing their personal data.
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