How money moves is becoming as critical as how much money moves. Whether it’s salary payments in Southeast Asia, inter-business settlements in Europe, or retail checkouts in Latin America, the design choices made today are shaping the payments landscape for the next decade and will determine who leads, who follows, and who lags behind. Written by Will Awang The payments industry in 2025 is at a turning point. What was once a quest for universal efficiency has evolved into a competition among multiple market systems, each with its own unique philosophies, capabilities, and limitations. Some focus on achieving control and interoperability through centralized infrastructure, while others prioritize decentralization, programmability, and private rails. Still others embed payment functionality into platforms, devices, and networks not traditionally associated with finance. How money moves is becoming as critical as how much money moves. Whether it’s salary payments in Southeast Asia, inter-business settlements in Europe, or retail checkouts in Latin America, the design choices made today are shaping the payments landscape for the next decade and will determine who leads, who follows, and who lags behind. The global financial system is influenced by non-financial factors such as tariffs, data governance rules, energy constraints, and national security priorities. The growing fragmentation in the payments sector reflects the evolution of the entire financial system into a regional mosaic of different standards, timelines, currencies, and trust anchors. Against this backdrop, the payments industry remains the most valuable part of financial services, generating $2.5 trillion in revenue (0.125% take rate) from $200 trillion in value flows and supporting 3.6 trillion transactions globally. Therefore, we have incorporated stablecoin/tokenized currency payments and finance into the entire global payment landscape. In other words, from the perspective of Fintech, who will integrate and how to integrate these fragmented systems caused by geopolitical factors, as well as how to adapt to the development of the next payment era based on their own advantages, are issues that all market players need to think about now. The McKinsey Global Payments Report 2025 provides a roadmap for success in the rapidly evolving global payments ecosystem, delving into the rise of diverse payment rails, the impact of digital assets, and the transformative power of artificial intelligence. It identifies the key elements needed to remain competitive in this rapidly changing environment. This report draws on McKinsey's Global Payments Map, which covers data from 50 countries, more than 20 payment methods, and 95% of global GDP. The report is divided into three parts: This paper provides a baseline forecast for industry growth through 2029, detailing how economic fluctuations and policy changes could lead to significant divergence in profit margins and revenue structures. It also examines whether the integration of multiple payment rails can generate new revenue streams, a key driver of payment development. The major forces reshaping the payments landscape include AI-native operations and the monetization of AI agents, emerging models of programmable payment liquidity, and regulated digital currencies. It's crucial to consider how these emerging forces will impact existing models. Payment operators should focus on agility, architecture, and trust during their transformation, and prioritize how to capture value. 1. Payment Income in the New Economy Global payment revenue is projected to grow by an average annual 7% between 2019 and 2024. Driven by rising interest rates, interest income will account for 46% of total revenue in 2024. Growth will then slow to 4% that year, significantly slower than the 12% achieved in 2023. The slowdown is attributed to peaking interest rates, a weakening macroeconomy, the structural expansion of low-yield payment methods, and ongoing fee squeezes. By region, Latin America saw an 11% increase, while Europe and Central Africa (EMEA) and North America saw increases of 8% and 5%, respectively, while Asia-Pacific (APAC) saw a 1% decline. Despite this, payments remains the most valuable sub-sector in the financial sector, with an average return on equity of 18.9% in 2024, with some institutions exceeding 100%. However, with interest rates peaking and declining in many countries and changes in deposit behavior, net interest income is expected to grow by only approximately 2% annually (until 2029) absent a major shock. Meanwhile, transactional revenue growth will also slow as consumers increasingly favor lower-cost methods such as direct account transfers and digital wallets. Continued pricing pressure (especially within the card-based ecosystem), stricter regulation, and the rise of platform-based payment experiences are squeezing fee-based models. Therefore, we forecast industry revenue growth to maintain an average annual growth rate of 4% through 2029, potentially dropping to 3% in the event of global disruptions or reaching 6% if productivity gains accelerate. At a 4% growth rate, the total market size will reach US$3 trillion by 2029. 1.1 Global Payment Trends Overall, global payment revenue is almost evenly divided between the consumer and business sides, but the composition varies significantly across regions. North America favors consumer payments because credit cards are the primary payment and borrowing tool, reflecting the maturity of the consumer credit market and the strength of card loyalty programs. The Asia-Pacific region is more commercial-oriented, with 25% of revenue coming from net interest income (NII) on commercial accounts, highlighting the depth of corporate banking relationships and the reliance of fast-growing economies on deposit interest. EMEA has the most diversified structure: 20% of revenue comes from commercial account NII related to trade and treasury activities, and 20% from consumer account NII, thanks to Europe's high savings base. Latin America, like North America, is also consumer-oriented, with consumer credit card revenue accounting for 32% of total revenue, reflecting the importance of revolving credit and consumers' reliance on installment payments. 1.2 Payment Development Trends under Income Structure Cash usage continues to decline globally, falling from 50% of all payments to 46% in 2023. Account-to-account (A2A) payments, particularly those completed through digital wallets, are growing in popularity and now account for approximately 30% of global point-of-sale (POS) transactions, led by markets such as India, Brazil, and Nigeria. As transaction volume shifts to lower-yield tracks like instant payments, monetization becomes increasingly challenging. This is particularly true in markets with strict regulations on interchange and processing fees. We expect new economic and fee models to emerge in the A2A space, potentially mirroring India's practice where banks have begun charging payment aggregators Unified Payments Interface (UPI) merchant transaction fees. Digitalization has been widely adopted in business-to-business (B2B) payments, but it is primarily concentrated in low-margin channels such as bank transfers and instant payments. To capture value, companies (especially software-centric ones) are investing in value-added services, including invoice automation, reconciliation, and working capital tools. These services are particularly important for small and medium-sized enterprises (SMEs) and industries such as healthcare that still rely on manual processes. Finally, new technologies continue to present both opportunities and threats. From tokenized and digital currencies to AI-powered anti-fraud and liquidity management, innovations are improving security, efficiency, and reach. However, adoption is uneven. Regulatory uncertainty, infrastructure gaps, and inconsistent technical standards have limited progress to isolated pockets. 2. Three major forces reshaping global payments Three structural forces have the potential to radically change how money flows between individuals, businesses, and intermediaries: The payment system is becoming increasingly fragmented and regionalized; Large-scale application of digital assets in payment scenarios; The transformative potential of artificial intelligence. 2.1 Fragmentation and regionalization of the payment landscape The global payments ecosystem is entering a phase of unprecedented complexity, driven by the hyper-connectivity of goods, services, and people. Over the past 30 years, globalization has ensured the smooth flow of funds across borders. However, geopolitical events have prompted some countries and regions to reduce their reliance on global standards and systems. For example, sanctions against Russia have excluded it from international card schemes, forcing it to rely on Mir cards for domestic transactions and to work with China UnionPay to meet international demand. Some countries and regions are promoting "payment sovereignty" to reduce their reliance on global intermediaries; the European Central Bank is actively promoting large-scale systems with Europe at their core. At the same time, technological advances are accelerating the growth of localized and regionalized payment systems. The development of instant payment infrastructure is particularly critical, fostering a superior user experience (exemplified by Brazil's Pix, Spain's Bizum, and India's UPI). The increasing interoperability between domestic instant payment systems is providing new pathways for cross-border payments beyond traditional standards. Pix's internationalization in Latin America and the National Payments Corporation of India's (NPCI) expansion into the Middle East and Southeast Asia are both prominent and rapidly developing examples. Furthermore, the rapid adoption of stablecoins is also creating a new channel distinct from traditional payment systems. These geopolitical and technological shifts are reshaping the payments landscape, leading to greater regionalization and diversification. A return to the fully globalized payments system of five years ago is unlikely, as the forces driving fragmentation have already begun. However, many alternative payment systems have encountered obstacles in their expansion: poor user experience, unclear value propositions, governance flaws, and a lack of supporting legislation in key markets. In some cases, legacy systems have proven resilient enough to circumvent or even defeat newer solutions. Therefore, the payment landscape is evolving towards two outcomes, both of which are more fragmented than the current one: one is a diversified ecosystem of "multiple tracks + global access keys"; the other is a divided world of "increased localization + declining global standards." Scenario A: Multi-track ecosystem with a “global access key” In a more optimistic scenario, geopolitical tensions stabilize or ease, payment standards remain strong, and they serve as a global gateway for a variety of payment scenarios and customer types. The scope of services can be broad or narrow—from online shopping to a range of value-added services; and the depth of services can be shallow or deep—from cross-border financial solutions for a specific industry to simple remittances for the general public. In this environment, all participants must address multiple challenges: monitoring and regulating the flow of funds across multiple channels, navigating the vastly different economic benefits across different use cases and systems, and ensuring the technical integration of these systems. This may give rise to a group of "integrators" and "aggregators" capable of seamlessly stitching together multiple payment systems. While this scenario would create a more fragmented payment system than it currently is, it could foster innovation and specialization, allowing diverse solutions to coexist and meet the needs of niche markets. Scenario B: Fragmentation escalates and global standards erode If global trade and commerce continue to face significant challenges and geopolitical tensions intensify, countries may increasingly rely on local and regional alliances, gradually withdrawing from the global flow of goods, services, and people. This scenario will occur against the backdrop of a global failure to establish a framework that allows the coexistence of "global systems" and "local systems." Consequently, the regionalization of payment systems will inevitably become inevitable. Countries and regions will prioritize resilience and self-sufficiency, leading to the emergence of more bilateral agreements, intermediary currencies, and alternative payment systems, further deviating from global standards. Over time, regional systems and payment instruments will dominate across use cases, fundamentally reshaping the financial landscape. International connectivity will become more challenging, with profound implications for the payments technology stack, particularly for multinational, globally distributed institutions. This could accelerate the adoption of stablecoins and tokenized currencies. While the first scenario offers smoother international connectivity, both scenarios mean the previously unified global payments landscape will become further fragmented and complex, with solutions becoming more localized. Adapting to this new reality will require flexibility, innovation, and a deep understanding of the forces driving financial flows. 2.2 Accelerated Adoption of Stablecoins and Tokenized Money Stablecoins and tokenized currencies are becoming increasingly important components of the financial system, though they haven’t yet crossed the critical mass of widespread adoption. While the industry is rapidly expanding—stablecoin issuance has doubled since the beginning of 2024—they still only account for a small portion of the trillions of dollars in daily global payments: currently, daily transaction volume averages approximately $30 billion. Multiple signals indicate that stablecoins are nearing a breakthrough. The primary factor is the increasing clarity of regulatory rules: the United States (with the recently passed GENIUS Act), the European Union, the United Kingdom, Hong Kong, and Japan have all introduced or refined their regulatory frameworks, clarifying key requirements such as licensing, reserve management, anti-money laundering, and customer due diligence. The alignment of these frameworks across regions will determine the success of cross-border stablecoin operations. Clarity in regulations will lower barriers to entry, particularly benefiting traditional financial institutions and boosting market confidence in stablecoins. The technical infrastructure is also rapidly upgrading: by migrating transaction processing from the main network to the more scalable Layer 2 and adopting more efficient consensus protocols, throughput continues to increase; user-oriented digital wallets and bank-grade custody solutions are becoming more reliable and accessible; advanced on-chain analysis tools enhance security and compliance capabilities. A more compelling driver is real-world demand. While initially limited to niche areas like crypto asset trading settlement, stablecoins' potential has been recognized by a wider range of use cases: tokenized deposits allow clients to accrue interest intraday and be readily available; stablecoins offer 24/7 real-time settlement, providing an alternative to traditional correspondent banking networks; and in regions experiencing significant local currency volatility, stablecoins pegged to major global currencies offer consumers an inflation hedge. Institutional applications are also emerging, such as B2B treasury management, supply chain financing, and repurchase agreements. Furthermore, the programmable nature of stablecoins opens up new use cases, including addressing custody challenges and limiting government benefits to specific consumer categories. Over the past 18 months, a number of high-profile announcements, partnerships, and mergers and acquisitions have demonstrated the industry's commitment to capturing the value of tokenized assets. However, widespread adoption also carries risks that must be carefully managed. While regulatory oversight is gaining traction in key markets, the lack of a unified, coherent global regulatory framework could lead to uncertainty and even market disruption. If an issuer's reserves are insufficient, a stablecoin could become unpegged and trust could collapse. A failure of a leading stablecoin could ripple through the broader financial system. Furthermore, for stablecoins to truly become ubiquitous, end users must shift from viewing them as a temporary bridge to fiat currency conversion and instead be willing to hold them for the long term. Once the majority of customers retain their funds in stablecoins, the traditional bank's deposit funding and revenue model will be disrupted. The rise of stablecoins coincides with the broader trend toward multi-track payments—for example, merchant acquirers offering unified solutions that support card payments, A2A transfers, and stablecoins. Leading companies have already made significant strides: PayPal now accepts payments in a variety of digital assets; Coinbase has launched a debit card tied to stablecoins, with credit card products coming soon. Other service providers seeking to meet their clients' stablecoin needs face a choice: whether to build their own capabilities or partner with aggregators or integration providers. 3. The path forward for payment participants As the global payments landscape reshapes into a mosaic of multiple tracks, digital assets, and intelligent AI agents, many possible paths will emerge for industry participants. This chapter breaks down the key decisions facing payment institutions, merchants, platform providers, and solution experts, exploring how each segment can position itself, continue to innovate, and capture value in an increasingly "decentralized, programmable, and real-time" environment. 3.1 Payment Providers: Fighting for Brand and Trust As AI agents begin to dominate more of the consumer journey, traditional competitive strategies based on product differentiation and user experience may become ineffective. Convenience and personalization will become fundamental barriers, and the main battleground will shift to brand trust and relationships. Whoever controls the interactive interface (whether direct or embedded) will be able to influence consumer decisions in a highly sticky and irreplaceable way. At the same time, new rails, stablecoins, and programmable currencies will rewrite the economic model of consumer payments. Intelligent agents optimizing "when and how" for consumers could squeeze interchange fees and interest rate spreads, putting pressure on the growth of local and regional players and challenging the dominance of global giants. Large institutions and solution specialists, long profiting from inefficiencies in settlement, credit, and liquidity, need to reshape their value proposition to avoid being disintermediated by smaller players and their customers. The ultimate winners will be those who build intelligent, embedded, secure, and emotionally resonant experiences around the “agent journey”: players who can not only anticipate needs and “translate” complex technology into intuitive experiences, but also be explainable and deeply aligned with the brand’s trust promise. Countries' emphasis on "payment sovereignty" and local solutions will benefit local/regional players and constrain global players. Local institutions can serve as "trust anchors" for local ecosystems (instant payments, identity layers, and central bank digital currency platforms), promoting interoperability, connecting networks, and adhering to local policies. Regional players (such as Europe's Wero and Brazil's Pix) can lead the economic landscape by establishing rules for cross-border payments, digital identity, and data governance. Global players may also shift to more flexible and open architectures to accommodate jurisdictional differences. In some markets, they may also consider partnering with emerging regional companies to address brand recognition and trust gaps. 3.2 Merchants: Using Payment Methods to Retain Customers As consumer expectations rise, merchants must provide seamless, scalable experiences across multiple payment methods, channels, and compliance requirements. AI agents are increasingly controlling the demand side, forcing merchants to acquire customers in new ways and meet new standards in payment orchestration, checkout intelligence, and personalized offers. Merchant payment service providers must evolve from simply supporting acquiring to providing autonomous payment infrastructure: intelligent routing, real-time settlement, automated compliance, and dynamic currency optimization will become default features. The greatest opportunity lies in building an "empowered commerce layer" to help merchants acquire, convert, and retain customers across multiple channels and regions. This layer encompasses acquiring services and further integrates merchant SaaS with payments. Early adopters can leverage the complexity of "regionalized rails + tokenized currencies" into a competitive advantage through programmable APIs and embedded services. 3.3 Platform Providers: Ecosystem Enablers This large, multi-product platform, spanning the value chain and multiple payment rails, is naturally well-positioned to upgrade its capabilities with AI and programmable money, helping traditional clients like banks accelerate innovation. Its breadth of services enables it to orchestrate the entire end-customer journey and serve as the "control layer" for AI agents and programmable finance. Its rich data resources fuel large-scale decision-making and personalization. However, many platforms, despite their breadth, are weak in specific areas, lagging behind experts in specific functionality. Blindly adding new, all-encompassing features can further widen the gap with the pros, ultimately forcing clients to seek out "best-of-breed" solutions. Therefore, platforms need to clearly define strategic priorities, determine resource allocations, and effectively implement new technologies for different customer segments (banks, merchants, businesses, and individuals). Leveraging their R&D and developer ecosystems, large platforms can maintain a leading position in innovation in specific service areas. 3.4 Solution Experts: Unlocking Segment Value Specialized players—such as cross-border payment specialists, single-rail acquiring providers, and payables/receivables automation vendors—face both opportunities and risks. The fragmentation of the payments ecosystem has spawned numerous edge cases and niches, perfect for point-based solutions. However, the rise of proxy-based workflows and programmable money risks commoditizing capabilities that lack unique intelligence, depth, or leverage. Therefore, the key to success for experts will be to target complex and intellectually valuable use cases and deeply embed their capabilities into the platform and agent ecosystem; at the same time, they must adapt to regional differences while retaining the ability to orchestrate larger workflows across tracks and links. Specific path example: Transforming the cross-border payment system into an "embedded engine" allows platforms or agents to dynamically choose routes based on real-time rates, foreign exchange fluctuations, and arrival time, and deeply integrate with programmable wallets to achieve optimal cash movement between multiple currencies and multiple tracks. The KYC/KYB rules engine has been upgraded to a "programmable trust layer," allowing the agency system to adjust the onboarding process in real time based on transaction type, jurisdiction, and customer profile, making onboarding intelligent and differentiated. 4. Six strategies for thriving in the next era of payments Facing the new era of “intelligent, programmable, and interconnected” payments, participants can adopt the following six core strategies to seize the newly added value. Designed with "intelligent simplicity" in mind As consumers and businesses increasingly rely on agents and automation, the key to trust and adoption lies in "keeping the complexity for ourselves and simplifying it for our customers." Simplicity, transparency, and personalization must be embedded in the core of our products, allowing users to maintain complete control over their funds without feeling the need for manipulation. Interoperability as infrastructure Cross-border, multi-track transactions will become the norm for the foreseeable future. The ability to bridge different asset types, jurisdictions, and compliance systems in real time is no longer a differentiating selling point; it's a "ticket to get in." Participants need to build a resilient infrastructure that natively supports these demands. Pushing intelligence to the edge Decisions must be made instantly, within agents and programmable contracts. Routing logic, fraud detection, and liquidity management should be embedded directly into software agents, APIs, and workflows, rather than relying on centralized batch processing or manual approvals. Making compliance programmable Faced with increasingly fragmented regulation, only those who can embed local compliance into their code can achieve scalability. Modular policy engines and regionalized logic will replace manual processes and hard-coded rulebooks, enabling one-click global compliance. Integrate with the ecosystem, not against it In a modular, programmable world, victory lies with the layers that others use as foundations: whether it's intelligence, trust, liquidity, or connectivity. Independent moats will erode, and only those embedded in the larger ecosystem will endure. Put trust upstream When AI and automation become the initiators of transactions, companies need to design transparency, explainability, and error backtracking into the system so that users and regulators can always know "what happened and why it happened", thereby gaining trust "before the transaction". V. Summary The payments industry is not just adapting to new technologies or market shifts; it is fundamentally reshaping its infrastructure in response to geopolitical forces, emerging digital paradigms, and the accelerating pace of artificial intelligence. In this fragmented yet interconnected future, success will depend on a commitment to seamless interoperability across diverse payment rails and an embrace of complexity. In the coming years, players who can turn challenges into opportunities and forge new paths in a world where agility, innovation and trust are the most valuable assets will be richly rewarded.How money moves is becoming as critical as how much money moves. Whether it’s salary payments in Southeast Asia, inter-business settlements in Europe, or retail checkouts in Latin America, the design choices made today are shaping the payments landscape for the next decade and will determine who leads, who follows, and who lags behind. Written by Will Awang The payments industry in 2025 is at a turning point. What was once a quest for universal efficiency has evolved into a competition among multiple market systems, each with its own unique philosophies, capabilities, and limitations. Some focus on achieving control and interoperability through centralized infrastructure, while others prioritize decentralization, programmability, and private rails. Still others embed payment functionality into platforms, devices, and networks not traditionally associated with finance. How money moves is becoming as critical as how much money moves. Whether it’s salary payments in Southeast Asia, inter-business settlements in Europe, or retail checkouts in Latin America, the design choices made today are shaping the payments landscape for the next decade and will determine who leads, who follows, and who lags behind. The global financial system is influenced by non-financial factors such as tariffs, data governance rules, energy constraints, and national security priorities. The growing fragmentation in the payments sector reflects the evolution of the entire financial system into a regional mosaic of different standards, timelines, currencies, and trust anchors. Against this backdrop, the payments industry remains the most valuable part of financial services, generating $2.5 trillion in revenue (0.125% take rate) from $200 trillion in value flows and supporting 3.6 trillion transactions globally. Therefore, we have incorporated stablecoin/tokenized currency payments and finance into the entire global payment landscape. In other words, from the perspective of Fintech, who will integrate and how to integrate these fragmented systems caused by geopolitical factors, as well as how to adapt to the development of the next payment era based on their own advantages, are issues that all market players need to think about now. The McKinsey Global Payments Report 2025 provides a roadmap for success in the rapidly evolving global payments ecosystem, delving into the rise of diverse payment rails, the impact of digital assets, and the transformative power of artificial intelligence. It identifies the key elements needed to remain competitive in this rapidly changing environment. This report draws on McKinsey's Global Payments Map, which covers data from 50 countries, more than 20 payment methods, and 95% of global GDP. The report is divided into three parts: This paper provides a baseline forecast for industry growth through 2029, detailing how economic fluctuations and policy changes could lead to significant divergence in profit margins and revenue structures. It also examines whether the integration of multiple payment rails can generate new revenue streams, a key driver of payment development. The major forces reshaping the payments landscape include AI-native operations and the monetization of AI agents, emerging models of programmable payment liquidity, and regulated digital currencies. It's crucial to consider how these emerging forces will impact existing models. Payment operators should focus on agility, architecture, and trust during their transformation, and prioritize how to capture value. 1. Payment Income in the New Economy Global payment revenue is projected to grow by an average annual 7% between 2019 and 2024. Driven by rising interest rates, interest income will account for 46% of total revenue in 2024. Growth will then slow to 4% that year, significantly slower than the 12% achieved in 2023. The slowdown is attributed to peaking interest rates, a weakening macroeconomy, the structural expansion of low-yield payment methods, and ongoing fee squeezes. By region, Latin America saw an 11% increase, while Europe and Central Africa (EMEA) and North America saw increases of 8% and 5%, respectively, while Asia-Pacific (APAC) saw a 1% decline. Despite this, payments remains the most valuable sub-sector in the financial sector, with an average return on equity of 18.9% in 2024, with some institutions exceeding 100%. However, with interest rates peaking and declining in many countries and changes in deposit behavior, net interest income is expected to grow by only approximately 2% annually (until 2029) absent a major shock. Meanwhile, transactional revenue growth will also slow as consumers increasingly favor lower-cost methods such as direct account transfers and digital wallets. Continued pricing pressure (especially within the card-based ecosystem), stricter regulation, and the rise of platform-based payment experiences are squeezing fee-based models. Therefore, we forecast industry revenue growth to maintain an average annual growth rate of 4% through 2029, potentially dropping to 3% in the event of global disruptions or reaching 6% if productivity gains accelerate. At a 4% growth rate, the total market size will reach US$3 trillion by 2029. 1.1 Global Payment Trends Overall, global payment revenue is almost evenly divided between the consumer and business sides, but the composition varies significantly across regions. North America favors consumer payments because credit cards are the primary payment and borrowing tool, reflecting the maturity of the consumer credit market and the strength of card loyalty programs. The Asia-Pacific region is more commercial-oriented, with 25% of revenue coming from net interest income (NII) on commercial accounts, highlighting the depth of corporate banking relationships and the reliance of fast-growing economies on deposit interest. EMEA has the most diversified structure: 20% of revenue comes from commercial account NII related to trade and treasury activities, and 20% from consumer account NII, thanks to Europe's high savings base. Latin America, like North America, is also consumer-oriented, with consumer credit card revenue accounting for 32% of total revenue, reflecting the importance of revolving credit and consumers' reliance on installment payments. 1.2 Payment Development Trends under Income Structure Cash usage continues to decline globally, falling from 50% of all payments to 46% in 2023. Account-to-account (A2A) payments, particularly those completed through digital wallets, are growing in popularity and now account for approximately 30% of global point-of-sale (POS) transactions, led by markets such as India, Brazil, and Nigeria. As transaction volume shifts to lower-yield tracks like instant payments, monetization becomes increasingly challenging. This is particularly true in markets with strict regulations on interchange and processing fees. We expect new economic and fee models to emerge in the A2A space, potentially mirroring India's practice where banks have begun charging payment aggregators Unified Payments Interface (UPI) merchant transaction fees. Digitalization has been widely adopted in business-to-business (B2B) payments, but it is primarily concentrated in low-margin channels such as bank transfers and instant payments. To capture value, companies (especially software-centric ones) are investing in value-added services, including invoice automation, reconciliation, and working capital tools. These services are particularly important for small and medium-sized enterprises (SMEs) and industries such as healthcare that still rely on manual processes. Finally, new technologies continue to present both opportunities and threats. From tokenized and digital currencies to AI-powered anti-fraud and liquidity management, innovations are improving security, efficiency, and reach. However, adoption is uneven. Regulatory uncertainty, infrastructure gaps, and inconsistent technical standards have limited progress to isolated pockets. 2. Three major forces reshaping global payments Three structural forces have the potential to radically change how money flows between individuals, businesses, and intermediaries: The payment system is becoming increasingly fragmented and regionalized; Large-scale application of digital assets in payment scenarios; The transformative potential of artificial intelligence. 2.1 Fragmentation and regionalization of the payment landscape The global payments ecosystem is entering a phase of unprecedented complexity, driven by the hyper-connectivity of goods, services, and people. Over the past 30 years, globalization has ensured the smooth flow of funds across borders. However, geopolitical events have prompted some countries and regions to reduce their reliance on global standards and systems. For example, sanctions against Russia have excluded it from international card schemes, forcing it to rely on Mir cards for domestic transactions and to work with China UnionPay to meet international demand. Some countries and regions are promoting "payment sovereignty" to reduce their reliance on global intermediaries; the European Central Bank is actively promoting large-scale systems with Europe at their core. At the same time, technological advances are accelerating the growth of localized and regionalized payment systems. The development of instant payment infrastructure is particularly critical, fostering a superior user experience (exemplified by Brazil's Pix, Spain's Bizum, and India's UPI). The increasing interoperability between domestic instant payment systems is providing new pathways for cross-border payments beyond traditional standards. Pix's internationalization in Latin America and the National Payments Corporation of India's (NPCI) expansion into the Middle East and Southeast Asia are both prominent and rapidly developing examples. Furthermore, the rapid adoption of stablecoins is also creating a new channel distinct from traditional payment systems. These geopolitical and technological shifts are reshaping the payments landscape, leading to greater regionalization and diversification. A return to the fully globalized payments system of five years ago is unlikely, as the forces driving fragmentation have already begun. However, many alternative payment systems have encountered obstacles in their expansion: poor user experience, unclear value propositions, governance flaws, and a lack of supporting legislation in key markets. In some cases, legacy systems have proven resilient enough to circumvent or even defeat newer solutions. Therefore, the payment landscape is evolving towards two outcomes, both of which are more fragmented than the current one: one is a diversified ecosystem of "multiple tracks + global access keys"; the other is a divided world of "increased localization + declining global standards." Scenario A: Multi-track ecosystem with a “global access key” In a more optimistic scenario, geopolitical tensions stabilize or ease, payment standards remain strong, and they serve as a global gateway for a variety of payment scenarios and customer types. The scope of services can be broad or narrow—from online shopping to a range of value-added services; and the depth of services can be shallow or deep—from cross-border financial solutions for a specific industry to simple remittances for the general public. In this environment, all participants must address multiple challenges: monitoring and regulating the flow of funds across multiple channels, navigating the vastly different economic benefits across different use cases and systems, and ensuring the technical integration of these systems. This may give rise to a group of "integrators" and "aggregators" capable of seamlessly stitching together multiple payment systems. While this scenario would create a more fragmented payment system than it currently is, it could foster innovation and specialization, allowing diverse solutions to coexist and meet the needs of niche markets. Scenario B: Fragmentation escalates and global standards erode If global trade and commerce continue to face significant challenges and geopolitical tensions intensify, countries may increasingly rely on local and regional alliances, gradually withdrawing from the global flow of goods, services, and people. This scenario will occur against the backdrop of a global failure to establish a framework that allows the coexistence of "global systems" and "local systems." Consequently, the regionalization of payment systems will inevitably become inevitable. Countries and regions will prioritize resilience and self-sufficiency, leading to the emergence of more bilateral agreements, intermediary currencies, and alternative payment systems, further deviating from global standards. Over time, regional systems and payment instruments will dominate across use cases, fundamentally reshaping the financial landscape. International connectivity will become more challenging, with profound implications for the payments technology stack, particularly for multinational, globally distributed institutions. This could accelerate the adoption of stablecoins and tokenized currencies. While the first scenario offers smoother international connectivity, both scenarios mean the previously unified global payments landscape will become further fragmented and complex, with solutions becoming more localized. Adapting to this new reality will require flexibility, innovation, and a deep understanding of the forces driving financial flows. 2.2 Accelerated Adoption of Stablecoins and Tokenized Money Stablecoins and tokenized currencies are becoming increasingly important components of the financial system, though they haven’t yet crossed the critical mass of widespread adoption. While the industry is rapidly expanding—stablecoin issuance has doubled since the beginning of 2024—they still only account for a small portion of the trillions of dollars in daily global payments: currently, daily transaction volume averages approximately $30 billion. Multiple signals indicate that stablecoins are nearing a breakthrough. The primary factor is the increasing clarity of regulatory rules: the United States (with the recently passed GENIUS Act), the European Union, the United Kingdom, Hong Kong, and Japan have all introduced or refined their regulatory frameworks, clarifying key requirements such as licensing, reserve management, anti-money laundering, and customer due diligence. The alignment of these frameworks across regions will determine the success of cross-border stablecoin operations. Clarity in regulations will lower barriers to entry, particularly benefiting traditional financial institutions and boosting market confidence in stablecoins. The technical infrastructure is also rapidly upgrading: by migrating transaction processing from the main network to the more scalable Layer 2 and adopting more efficient consensus protocols, throughput continues to increase; user-oriented digital wallets and bank-grade custody solutions are becoming more reliable and accessible; advanced on-chain analysis tools enhance security and compliance capabilities. A more compelling driver is real-world demand. While initially limited to niche areas like crypto asset trading settlement, stablecoins' potential has been recognized by a wider range of use cases: tokenized deposits allow clients to accrue interest intraday and be readily available; stablecoins offer 24/7 real-time settlement, providing an alternative to traditional correspondent banking networks; and in regions experiencing significant local currency volatility, stablecoins pegged to major global currencies offer consumers an inflation hedge. Institutional applications are also emerging, such as B2B treasury management, supply chain financing, and repurchase agreements. Furthermore, the programmable nature of stablecoins opens up new use cases, including addressing custody challenges and limiting government benefits to specific consumer categories. Over the past 18 months, a number of high-profile announcements, partnerships, and mergers and acquisitions have demonstrated the industry's commitment to capturing the value of tokenized assets. However, widespread adoption also carries risks that must be carefully managed. While regulatory oversight is gaining traction in key markets, the lack of a unified, coherent global regulatory framework could lead to uncertainty and even market disruption. If an issuer's reserves are insufficient, a stablecoin could become unpegged and trust could collapse. A failure of a leading stablecoin could ripple through the broader financial system. Furthermore, for stablecoins to truly become ubiquitous, end users must shift from viewing them as a temporary bridge to fiat currency conversion and instead be willing to hold them for the long term. Once the majority of customers retain their funds in stablecoins, the traditional bank's deposit funding and revenue model will be disrupted. The rise of stablecoins coincides with the broader trend toward multi-track payments—for example, merchant acquirers offering unified solutions that support card payments, A2A transfers, and stablecoins. Leading companies have already made significant strides: PayPal now accepts payments in a variety of digital assets; Coinbase has launched a debit card tied to stablecoins, with credit card products coming soon. Other service providers seeking to meet their clients' stablecoin needs face a choice: whether to build their own capabilities or partner with aggregators or integration providers. 3. The path forward for payment participants As the global payments landscape reshapes into a mosaic of multiple tracks, digital assets, and intelligent AI agents, many possible paths will emerge for industry participants. This chapter breaks down the key decisions facing payment institutions, merchants, platform providers, and solution experts, exploring how each segment can position itself, continue to innovate, and capture value in an increasingly "decentralized, programmable, and real-time" environment. 3.1 Payment Providers: Fighting for Brand and Trust As AI agents begin to dominate more of the consumer journey, traditional competitive strategies based on product differentiation and user experience may become ineffective. Convenience and personalization will become fundamental barriers, and the main battleground will shift to brand trust and relationships. Whoever controls the interactive interface (whether direct or embedded) will be able to influence consumer decisions in a highly sticky and irreplaceable way. At the same time, new rails, stablecoins, and programmable currencies will rewrite the economic model of consumer payments. Intelligent agents optimizing "when and how" for consumers could squeeze interchange fees and interest rate spreads, putting pressure on the growth of local and regional players and challenging the dominance of global giants. Large institutions and solution specialists, long profiting from inefficiencies in settlement, credit, and liquidity, need to reshape their value proposition to avoid being disintermediated by smaller players and their customers. The ultimate winners will be those who build intelligent, embedded, secure, and emotionally resonant experiences around the “agent journey”: players who can not only anticipate needs and “translate” complex technology into intuitive experiences, but also be explainable and deeply aligned with the brand’s trust promise. Countries' emphasis on "payment sovereignty" and local solutions will benefit local/regional players and constrain global players. Local institutions can serve as "trust anchors" for local ecosystems (instant payments, identity layers, and central bank digital currency platforms), promoting interoperability, connecting networks, and adhering to local policies. Regional players (such as Europe's Wero and Brazil's Pix) can lead the economic landscape by establishing rules for cross-border payments, digital identity, and data governance. Global players may also shift to more flexible and open architectures to accommodate jurisdictional differences. In some markets, they may also consider partnering with emerging regional companies to address brand recognition and trust gaps. 3.2 Merchants: Using Payment Methods to Retain Customers As consumer expectations rise, merchants must provide seamless, scalable experiences across multiple payment methods, channels, and compliance requirements. AI agents are increasingly controlling the demand side, forcing merchants to acquire customers in new ways and meet new standards in payment orchestration, checkout intelligence, and personalized offers. Merchant payment service providers must evolve from simply supporting acquiring to providing autonomous payment infrastructure: intelligent routing, real-time settlement, automated compliance, and dynamic currency optimization will become default features. The greatest opportunity lies in building an "empowered commerce layer" to help merchants acquire, convert, and retain customers across multiple channels and regions. This layer encompasses acquiring services and further integrates merchant SaaS with payments. Early adopters can leverage the complexity of "regionalized rails + tokenized currencies" into a competitive advantage through programmable APIs and embedded services. 3.3 Platform Providers: Ecosystem Enablers This large, multi-product platform, spanning the value chain and multiple payment rails, is naturally well-positioned to upgrade its capabilities with AI and programmable money, helping traditional clients like banks accelerate innovation. Its breadth of services enables it to orchestrate the entire end-customer journey and serve as the "control layer" for AI agents and programmable finance. Its rich data resources fuel large-scale decision-making and personalization. However, many platforms, despite their breadth, are weak in specific areas, lagging behind experts in specific functionality. Blindly adding new, all-encompassing features can further widen the gap with the pros, ultimately forcing clients to seek out "best-of-breed" solutions. Therefore, platforms need to clearly define strategic priorities, determine resource allocations, and effectively implement new technologies for different customer segments (banks, merchants, businesses, and individuals). Leveraging their R&D and developer ecosystems, large platforms can maintain a leading position in innovation in specific service areas. 3.4 Solution Experts: Unlocking Segment Value Specialized players—such as cross-border payment specialists, single-rail acquiring providers, and payables/receivables automation vendors—face both opportunities and risks. The fragmentation of the payments ecosystem has spawned numerous edge cases and niches, perfect for point-based solutions. However, the rise of proxy-based workflows and programmable money risks commoditizing capabilities that lack unique intelligence, depth, or leverage. Therefore, the key to success for experts will be to target complex and intellectually valuable use cases and deeply embed their capabilities into the platform and agent ecosystem; at the same time, they must adapt to regional differences while retaining the ability to orchestrate larger workflows across tracks and links. Specific path example: Transforming the cross-border payment system into an "embedded engine" allows platforms or agents to dynamically choose routes based on real-time rates, foreign exchange fluctuations, and arrival time, and deeply integrate with programmable wallets to achieve optimal cash movement between multiple currencies and multiple tracks. The KYC/KYB rules engine has been upgraded to a "programmable trust layer," allowing the agency system to adjust the onboarding process in real time based on transaction type, jurisdiction, and customer profile, making onboarding intelligent and differentiated. 4. Six strategies for thriving in the next era of payments Facing the new era of “intelligent, programmable, and interconnected” payments, participants can adopt the following six core strategies to seize the newly added value. Designed with "intelligent simplicity" in mind As consumers and businesses increasingly rely on agents and automation, the key to trust and adoption lies in "keeping the complexity for ourselves and simplifying it for our customers." Simplicity, transparency, and personalization must be embedded in the core of our products, allowing users to maintain complete control over their funds without feeling the need for manipulation. Interoperability as infrastructure Cross-border, multi-track transactions will become the norm for the foreseeable future. The ability to bridge different asset types, jurisdictions, and compliance systems in real time is no longer a differentiating selling point; it's a "ticket to get in." Participants need to build a resilient infrastructure that natively supports these demands. Pushing intelligence to the edge Decisions must be made instantly, within agents and programmable contracts. Routing logic, fraud detection, and liquidity management should be embedded directly into software agents, APIs, and workflows, rather than relying on centralized batch processing or manual approvals. Making compliance programmable Faced with increasingly fragmented regulation, only those who can embed local compliance into their code can achieve scalability. Modular policy engines and regionalized logic will replace manual processes and hard-coded rulebooks, enabling one-click global compliance. Integrate with the ecosystem, not against it In a modular, programmable world, victory lies with the layers that others use as foundations: whether it's intelligence, trust, liquidity, or connectivity. Independent moats will erode, and only those embedded in the larger ecosystem will endure. Put trust upstream When AI and automation become the initiators of transactions, companies need to design transparency, explainability, and error backtracking into the system so that users and regulators can always know "what happened and why it happened", thereby gaining trust "before the transaction". V. Summary The payments industry is not just adapting to new technologies or market shifts; it is fundamentally reshaping its infrastructure in response to geopolitical forces, emerging digital paradigms, and the accelerating pace of artificial intelligence. In this fragmented yet interconnected future, success will depend on a commitment to seamless interoperability across diverse payment rails and an embrace of complexity. In the coming years, players who can turn challenges into opportunities and forge new paths in a world where agility, innovation and trust are the most valuable assets will be richly rewarded.