The 2-Z of 2025 predictions: T & U

T is for transaction

Source: Adyen. Wong.

“Subscriptions are everywhere, from food delivery to beauty services. In 2025, the subscription economy is set to face a turning point with two in five (40%) consumers in APAC looking to scale back on their online subscriptions, driven by rising costs of living and subscription fatigue, according to research we recently conducted," said Ben Wong, GM of SEA and Hong Kong, Adyen.

"In 2025, the challenge for businesses lies in ensuring their subscription models not only deliver value but also address consumer pain points – chief amongst them: payments. Our research reveals that 41% of APAC consumers would abandon a subscription altogether if their preferred payment method is not available, shining a spotlight on the immense yet often overlooked role payments play in sustaining the success of digital subscriptions."

According to Wong, businesses must "rethink their payments strategy beyond a mere transaction mechanism and instead, create experiences that are seamless, secure and hyper-personalised" if they are to thrive. "This could mean optimising the checkout page with local payment methods that customers already know and trust, e.g. PayNow in Singapore, PayMe in Hong Kong or even DuitNow in Malaysia," he advised.

Cross-border

Igor Kozintsev, VP at CMA, said that regional and international initiatives to create real-time remittance and cross-border
payments corridors will continue in 2025. "We anticipate many discussions around how industry standards and best practices can support in achieving true interoperability across both national and international payments systems," he said.

"The implementation of cross-border payments depends on having common rules and legislation for all stakeholders. While the CBPR+ ISO 20022 protocol is becoming a common standard, concerns remain around regulatory differences between participating countries, compliance issues, and access to sensitive payment information by third parties, including network providers and system operators. There’s also a need to agree risk mitigation rules, final settlement procedures and more."

"Due to the diversity of cross-border payment options – within ‘closed user groups’, regional and worldwide – CMA sees that an ‘integration’ module, hub or similar application may be necessary at a domestic level, helping to solve ‘orchestration’ tasks, such as messaging formats, business flows, payments corridors, connectivity and more," Kozintsev added. 

"As regional cross-border systems mature – providing attractive services in terms of speed, compliance and security – over time we can expect the use of correspondent banking to diminish, with relationships iteratively replaced by such services."

Kozintsev also noted that distributed ledger technology (DLT, sometimes called Blockchain) is arguably much better suited for regional payment systems or cross-border payments frameworks where participating countries need to delegate responsibility to a designated system operator. 

"Just as DLT is considered typical for CBDC implementations, we see its potential to underpin regional cross-border payments and alternate ‘private’ payment systems," he said. CBDC stands for central bank digital currency. 

Modernisation

"While most countries across Southeast Asia, the Middle East, Africa and Latin America have real-time gross settlement (RTGS), automated clearing house (ACH) transactions and instant payment systems (IPS) in place, they recognise the importance of keeping up with the rapid pace of change in the international payments landscape. Central banks and financial market infrastructure providers are looking to deliver increased efficiencies and cost savings, as well as improved payments accessibility, security and financial inclusion for all," said Kozintsev, leading to three trends:

Modernisation: deployment of next-generation RTGS systems

"A growing demand for better liquidity and risk management support, including liquidity-saving mechanisms that lower liquidity costs for all RTGS participants, requires a more modern, open approach. Central banks are also increasingly looking at extended RTGS operating hours to facilitate the settlement of transactions outside of business hours and
during national holidays," said Kozintsev. 

"The objective is to avoid settlement delays that could result in participants not having the necessary liquidity needed to cover their obligations. In addition, to foster increased competition and innovation in payment services, there’s a
growing desire for central banks to onboard non-bank payment service providers to RTGS systems, and also to consider how to orchestrate linkages from RTGS to cross-border payment systems and to prepare for the potential introduction of CBDCs."

Modernisation: expansion of instant payment systems

"Alongside RTGS, central banks are keen to promote increased financial inclusion by providing easier access to instant payment services. Areas of interest include support for unified QR codes, offline payments, request-to-pay, prevalidation of payee, and other value-added services. Effectively there’s the potential to implement a range of user-friendly instant
payment services that improve the customer experience, similar to those that already exist within card payment systems," Kozintsev noted. 

"Real-time payments are providing greater consumer choice of ways to pay and be paid. As countries move to interlink their domestic schemes, cross-border payments will become more seamless. And more interoperability between real-time payments and other forms of payment, such as central bank digital currencies and digital assets, will make it easier to enable transactions between traditional bank accounts and digital currency accounts," Mastercard noted in a list of 2025 predictions.

Modernisation: replacement of ACH systems 

"The modernisation and extension of RTGS systems, coupled with the deployment of instant payments systems is diminishing the ongoing requirement for separate, batch-based ACH payment systems within emerging economies – particularly for those countries that handle relatively small daily volumes of retail payments," Kozintsev said.

"Some are questioning whether they need to continue operating a separate ACH system, and whether these payments can easily be re-routed and handled more efficiently as part of a modernised RTGS and IPS infrastructure. We expect an increasing number of conversations on this topic."

Embedded finance

By embedding payments in enterprise resource planning software, businesses are able to make real-time payments, prevent fraud and manage costs more efficiently, Mastercard said. Virtual cards — temporary card numbers randomly generated and linked to a funding account that has an established line of  credit — can also automate reconciliation, cutting down on human error and offering companies real-time data insights and more control over spending, predicted the company.

Contactless phone payments

Tap on phone technology, which turns any device into a payment acceptance terminal, is democratising acceptance for merchants, Mastercard observed. Benefits include cutting the need for complex checkout infrastructure and shortened wait times among other benefits. "As physical and digital experiences continue to converge, we’ll see more applications of tapping tech across a range of commerce use cases, from verifying a transaction to instantly adding your card to your mobile wallet or even sending money to friends and family," the company predicted. 

Retries

Wong of Adyen noted that smarter approaches to retries for when payment transactions fail also boosts the customer experience. "In some cases, for example, when the shopper's account has insufficient funds, the payment may still succeed when submitted again at a later point in time. Instead of applying a one-size-fits all solution, intelligent systems can analyse translation failure reasons and proactively determine the best time to retry. For instance, in the latter case, retries can be spaced out over a longer-term period to align with the cardholder’s payday to reduce the likelihood of incessant prompting," he suggested.

"While the subscription economy may be what’s capturing consumer demand today, the real challenge lies in building an adaptable and forward-looking infrastructure that can keep pace with the next consumer trend, preference or need.”

Wallets

According to Mastercard, digital wallets are increasingly playing the role of a bank account and capturing the large majority of consumers and businesses in developing and emerging markets. "While these digital wallets are addressing unbanked populations head-on by delivering simple, convenient and affordable experiences, there’s been a disconnect in connecting traditional, card-based payments for international consumers," experts from the company said, which led to the launch of a solution allowing cardholders to link their credit or debit cards to a local digital wallet.

"Digital wallets will continue to evolve into comprehensive platforms, integrating payments, identity, loyalty and even healthcare — an essential way for people to navigate their daily lives. The leaders will be those who create intuitive, interoperable ecosystems." 

Security

Weaponised deepfake technology could lead to a wave of account takeovers and fraudulent transactions that force banking regulators worldwide to take decisive action in 2025, iProov said. "Led by pioneers like Thailand and Vietnam, countries will mandate the implementation of biometric verification for payment authentication, adding an extra layer of security to protect customers and financial institutions.

"This move towards mandated biometric payment authentication will significantly enhance the security of digital transactions, making it more difficult for fraudsters to exploit stolen identities or manipulate systems. It will also accelerate the adoption of biometrics in the financial sector, paving the way for more secure and trustworthy digital banking experiences."

Tokens

Tokenisation is key to Mastercard’s vision to eliminate manual card entry by 2030, and is already used for in-car commerce. The company said that the potential for the technology is immense. Future scenarios can include using tokenisation technology to enable consumers to share their shopping habits and preferences with merchants on digital platforms, so they receive more relevant offers and discounts without revealing their personal data. "And the tokenisation of assets through Blockchain technology can digitise and optimise any economic activity — from capital markets to trade finance to exchanging a land title or a carbon credit," Mastercard said. 

T is also for truth

"As disinformation spreads at unprecedented rates, a new wave of AI-powered tools will emerge to empower journalists, researchers, and engaged citizens in their quest for truth. This technological revolution will democratise investigative capabilities, accelerate fact-checking, and begin to close the gap between the spread of misinformation and its debunking," said Dr Werner Vogels, CTO, Amazon in a list of 2025 predictions.

Dr Vogels pointed out that fact-checking processes are "painstakingly manual and labour-intensive", whereas misinformation can be spread instantly "with a single tweet or manipulated image or video, creating a significant imbalance in the information ecosystem". "This disparity underscores the need for better tools to combat misinformation and disinformation," he said, listing a number of new open-source intelligence (OSINT) tools that are able to do the job more quickly.

"In the years ahead, we can expect a shift in the direction of fact. The development and democratisation of these tools will level the playing field, allowing accurate information to flow as rapidly as disinformation. This transition will not only help to restore public trust in traditional news sources, but also enhance the overall quality of discourse across digital platforms. The impact will be far-reaching, benefiting consumers, businesses safeguarding their reputations, and governments and organisations striving to maintain informed populaces," he said.

"As technologists, we have a crucial responsibility in this transformation. By innovating and building tools to help detect and deter disinformation, we can reshape the information landscape. Our collective efforts will contribute to a more informed society, resilient against the tides of digital deception. The path forward is clear: use technology not just to connect the world, but to protect the integrity of the information that binds us."

U is for unlock value

"'Dark data' refers to the vast amount of information collected by organisations that is not actively used or analysed, leading to missed opportunities for insights. This includes unstructured data, chat transcripts, unused customer information, operational sensor inputs, logs, and IoT data. It was overlooked because it was multimodal, but that’s no longer an excuse; with AI-enabled pipelines and the right tools, a light can be shone on dark data. The race is on to tap into this previously unused data; all of it could hold the gold businesses seek," said Qlik in a discussion of AI trends.

Explore

Read more 2-Z predictions for 2025 at https://www.techtradeasia.com/2025/01/the-techtrade-asia-2024-roundup-2025.html

Hashtag: #2025Predictions