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Tokenization is proving itself to be a transformative technology. It not only efficiently overcomes challenges around data security and privacy but also unlocks new opportunities for commercial and governmental players with the emergence of a token economy. As innovators continue to explore additional use cases beyond payments, tokenization will reinforce its role as an invisible enabler, underpinning secure and efficient digital interactions across various sectors.
Mastercard and McLaren Racing have joined forces in a multi-year deal that will see the global payments leader become a major sponsor of the McLaren Formula 1 Team.
Seven trends signaling how payments could evolve by 2030
The payments industry is entering a transformative chapter, powered by cutting-edge technology, heightened expectations and the rapid expansion of new systems and rails. Like the high-speed, high-stakes realm of motorsports, the future of payments demands agility, precision and foresight. In this issue of Mastercard Signals, we explore seven emerging trends that will shape the payments ecosystem by 2030.
Navigating different circuits
The payments ecosystem today is fragmented, with different rails and platforms often operating independently of one another, creating friction in cross-border and cross-platform transactions. Achieving true interoperability means bridging technological silos, addressing regulatory fragmentation, resolving ecosystem complexity and integrating cutting-edge security. By 2030, orchestration layers, shared global standards and technological innovation will help create a world where payments flow seamlessly across platforms, currencies and borders, enabling secure, invisible transactions that connect even the most disparate systems.
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Despite increased digitization, too much identity authentication is still characterized by repetitive logins and manual credential entry across platforms, apps and geographies. Nevertheless, advances in biometrics, tokenization and AI-powered security are creating frictionless and secure digital identities. Passkeys and government-backed initiatives are paving the way for cross-border ID recognition. By the end of the decade, digital identities will resemble universal keys, granting instant access across platforms and services — from health care to travel. These identity networks will ensure security and personalization while minimizing personal data exposure.
Ignition keys
Digital wallets continue to grow in popularity, storing payments, loyalty cards and credentials, but they remain limited in functionality and interoperability. AI-driven personalization, and integration with identity and financial management tools, are transforming wallets into command centers for daily life. Between now and 2030, digital wallets will evolve toward intelligent, proactive assistants capable of managing finances, travel, health records, subscriptions and more, seamlessly integrated into both physical and digital worlds.
Cockpit controls
Millions of small and underserved merchants lack digital payment acceptance capabilities, while inconvenient checkout processes are causing cart abandonment in e-commerce. Expanding acceptance technology and improving checkout are critical for both merchants and consumers. New technologies, from Tap on Phone to AI-powered checkout systems, will democratize acceptance, while enabling hyper-personalized and "no-checkout" experiences.
The open-track economy
Commercial payments often lag behind consumer-grade experiences, with businesses facing fragmented workflows and manual processes. Embedded finance solutions powered by APIs and AI are transforming operations, enabling programmable payments, dynamic discounting (such as for early payments) and cash flow forecasting. Over the next few years, payments will become more intelligent and invisible, embedded seamlessly into workflows to eliminate inefficiencies and drive faster business operations. Enterprises will leverage real-time insights and automation to focus on strategic growth.
Harnessing the slipstream
Payments are increasingly targeted by sophisticated cybercriminals who exploit human error and system vulnerabilities. AI-powered tools are already identifying fraud in real time. Adaptive intelligence, threat sharing and federated learning will enable predictive, rather than reactive, defenses. By the end of the decade, payments will be characterized by continuous, adaptive, self-healing security systems, which anticipate and neutralize threats before they materialize, ensuring that cybersecurity is a competitive differentiator.
Telemetry on the track
Payment partnerships are evolving beyond the bank-fintech model to incorporate diverse players such as internet service providers, government agencies and vertical-specific innovators. Collaborative ecosystems will drive the co-creation of services by integrating embedded finance and enabling cross-platform solutions. Privacy-enhancing technologies will enable secure data-sharing and drive innovation. By 2030, integrated ecosystems will better deliver low-friction, scalable and inclusive solutions for businesses and consumers alike.
Race strategy
Winning the race
These seven trends shaping the future of payments form an interconnected roadmap for innovation and progress. Together, they point to a future defined by three themes:
Identity
Seamless authentication enabling secure, personalized interactions.
Unified systems that eliminate friction across rails and borders.
Interoperability
Advanced AI optimizing and securing every aspect of payments.
Intelligence
Mastercard is committed to leading this journey, embracing collaboration, anticipating disruption and delivering solutions that drive global prosperity.
"The race to transform payments is underway, and the winners will be those who innovate boldly, adapt quickly and never lose sight of the customer experience."
Jorn Lambert | chief product officer, Mastercard
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Seven trends signaling how payments could evolve by 2030 · Seven trends signaling how payments could evolve by 2030 · Seven trends signaling
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Much as motorsports features a variety of tracks, each with its own challenges and demands, so the payments landscape presents a dynamic maze of different systems. From account-to-account and real-time payments to cross-border and digital public infrastructures, these systems often operate separately, creating difficulties for consumers, businesses and governments alike. Achieving interoperability — the seamless movement of payments across platforms, currencies and jurisdictions — is one of the industry’s most complex challenges. By 2030, advances in orchestration layers, global standards and technology will reshape the ecosystem, enabling secure, connected and frictionless transactions worldwide.
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The payments landscape today is more dynamic and complex than ever before. Consumers, businesses and governments expect fast, secure and efficient transactions across a multitude of rails and systems. This includes:
Account-to-account
A2A payments refer to the transfer of funds directly between two bank accounts, typically relying on real-time payments and ACH networks. Businesses and consumers are increasingly leveraging A2A payments via fintech apps and platforms, enabled by APIs and open banking.
Real-time payments
RTP systems are rapidly proliferating, with over 80 operational by 2024. Transactions globally are expected to grow from 266 billion in 2023 to 575 billion by 2028, underscoring their role as a backbone for A2A flows.
Alternative payment methods
APM refers to any payment method outside of traditional credit and debit cards and includes mobile wallets like Apple Pay, Google Pay, Paytm and WeChat, and buy now, pay later providers like Klarna, Affirm and Afterpay, as well as digital currencies and public infrastructure.
Digital currencies
Digital currencies, including central bank digital currencies, add programmability and traceability to A2A frameworks. While countries like Nigeria and China are advancing their use, adoption elsewhere remains largely experimental.
Digital public infrastructure
Platforms like India’s UPI and Brazil’s Pix demonstrate how centralized, government-backed systems can scale A2A payments. These systems act as public goods, providing the necessary infrastructure to expand access to digital payments for individuals, businesses and institutions.
Open banking
By enabling secure data sharing between financial institutions and third-party providers, open banking resolves barriers to connectivity. In markets like the U.K. regulatory mandates designed to improve financial inclusion and boost innovation are driving the process, while in the U.S. industry-led adoption is meeting consumer demand for connected experiences.
Challenges to interoperability
Interoperability is often synonymous with card networks, allowing users to pay anywhere, any time and ensuring global connectivity for businesses and consumers alike. Fintech and APM platforms are similarly trying to remove barriers by connecting banks, wallets and payment providers, in some cases using card networks to bridge the gaps. For example, Alipay, the ubiquitous Chinese APM, works with Mastercard to enable payments where Alipay is not accepted. Still, there is much that needs to be addressed, such as:
Security risks
As payment options expand, so does the scope for vulnerabilities. Authorized push payment fraud losses in the U.S. are projected to rise from under $2 billion in 2022 to over $3 billion by 2027.3 In Brazil, the government introduced measures after fraud cases soared immediately in the wake of the introduction of the country’s Pix fast payments network.4 Elsewhere, a recent report found almost two-thirds of merchants citing increased difficulties in managing fraud around APMs.5 The intersections of different payment systems — such as bridges between fiat and cryptocurrencies6 — are often weak links in the ecosystem.
Real-time payments (RTP) growth
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Technological silos
Disparate standards and messaging protocols limit compatibility across systems.
Inconsistent compliance requirements create barriers to cross-border transactions.
Regulatory fragmentation
A growing variety of payment rails, currencies and platforms adds friction to global flows.
Ecosystem complexity
“Tomorrow’s payments ecosystem must deliver the same level of security, assurance and convenience across the board — regardless of payment scheme, rails or jurisdiction. That is the challenge, and the opportunity, for our industry."
Peter Reynolds | EVP, Real Time Payments, Mastercard
Incentivizing innovation
Open banking regulation, RTP systems and CBDCs are just the beginning of a larger shift toward financial inclusion and digital resilience. Governments and private sectors must collaborate to ensure emerging digital infrastructures — including digital identity and data-exchange platforms — also foster innovation while enhancing security. Shared incentive models will be key to aligning industry and regulatory priorities, encouraging private-sector investment in scalable, interoperable solutions.
By 2030, consumers and businesses should be able to transact effortlessly across borders, currencies and platforms. Imagine a tourist in Kenya using a European digital wallet to pay a street vendor instantly, or a small business seamlessly managing real-time payments, digital currencies and bank transfers all in one dashboard. Advances in orchestration layers and universal standards will bridge today’s silos, enabling a truly global payments ecosystem — secure, seamless and invisible.
A framework for interoperability
The creation of seamlessly connected ecosystems requires progress across multiple dimensions:
The infrastructure enabling seamless A2A transfers, connecting RTP systems, carded networks and digital currencies.
Rails
Unified rules, standards, and protections that ensure security, consistency and trust across systems.
Schemes
AI-enhanced optimization, real-time fraud mitigation and transaction routing for secure payments.
technologies
Harmonizing domestic and regional systems to enable seamless cross-border payments.
Geography
As each racing circuit demands a unique strategy, each market requires tailored payment solutions. Interoperability is an ultimate goal as payment players align with emerging global standards, invest in scalable infrastructure and foster collaboration across ecosystems.
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In the U.S., U.K., Nordic and Australian markets, 76% of consumers connect financial accounts via open banking tech.2
www.openbanking.foleon.com https://www.openbankingeu.mastercard.com/blog/ www.paymentsdive.com www.reuters.com/article/markets www.merchantriskcouncil.org/learning www.bbc.com/news/technology
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Digital identity will become the master key to a connected world, unlocking access across platforms and borders without exposing personal data. Innovations in biometrics, tokenization and AI will turn today’s fragmented identity systems into complementary secure tools that empower both individuals and businesses.
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Identity is the ignition key that powers trusted payments and secure interactions, but all too often authentication remains fragmented and cumbersome. Consumers frequently have to log in, enter credentials and expose personal data across multiple platforms — a process at odds with rising expectations for seamless and secure experiences. Innovations in biometrics, tokenization and AI are transforming identity into a universal key, granting instant, persistent access while safeguarding personal data. From health care to global travel, these advances are unlocking a future of frictionless, secure interactions and reimagining how identity is managed across systems and borders.
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Always-on authentication
As passkeys start to replace one-time passwords, we are entering a new era of always-on authentication that requires no explicit action on the part of the individual beyond a near-effortless face or fingerprint scan. Increasingly, models will dynamically adjust security behind the scenes as they personalize and fine-tune risk assessments. Global markets for password-less authentication,10 risk-based authentication11 and passive (silent) authentication12 are forecast to grow 17% to 23% annually over the next several years, driven by tech advances, demands for enhanced security and rising adoption across industries like finance, health care, retail and workplace security.
Identity is the bedrock of digital transactions. Modern identity solutions ensure that value is exchanged accurately, efficiently and securely between entities. Current technologies include:
BIOMETRICS
Biometrics such as facial recognition, fingerprint scanning and voice authentication are increasingly used. Governments have also adopted biometric authentication for e-passports and national ID systems.
Market forecast: Biometric payments7
Tokenization
Tokenization is widely used to reduce fraud risk in digital and contactless payments by replacing sensitive information like card numbers.
AI and machine learning
AI and machine learning are used to analyze behavioral patterns, transaction histories and geolocation data in real time to detect anomalies and prevent fraud. Financial institutions and fintechs are leveraging these tools to enhance trust and personalize user experiences.
Passkeys
Passkeys grew by 400% in 2024.8 They work across devices and platforms to address challenges associated with passwords, including weak credentials, phishing and password fatigue.9
“Your identity will be the way you onboard, pay, enjoy personalized experiences and unlock a world beyond payments — health care, education, public services and more. This will happen in some regions faster than others and we will see the real innovation in bridging various systems to advance seamless authentication across geographies and jurisdictions."
Dennis Gamiello | executive vice president, global head of Identity, Mastercard
Mastercard is leveraging tokenization and payment passkeys that use biometric authentication to eliminate passwords and one-time codes. We intend to use tokenization for all e-commerce transactions by the end of the decade and ultimately phase out manual card entry worldwide.
Customer identiTY verification tops the list for most business security investment plans13
Customer identity verification
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IoT security
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From national to cross-border ID systems
Aadhaar, India’s biometric-based digital identity system, has provided more than 1 billion residents with 12-digit IDs linked to their biometric data and demographic information.14 It has also inspired the Modular Open-Source Identity Platform, which other countries — including the Philippines, Morocco, Ethiopia, Guinea, Togo and Sri Lanka — are using to create their own biometric-based digital identity systems.15 The European Union’s Electronic Identification, Authentication and Trust Services framework (eIDAS) is taking the next step — facilitating cross-border digital interactions. Fully implemented in 2018 and updated in 2024, eIDAS ensures that digital identities issued in one member state are recognized across the EU. It has provided a comprehensive legal structure for electronic identification, enhanced the security and efficiency of cross-border electronic transactions and facilitated the adoption of trust services such as electronic signatures and seals. In a similar effort to establish a multinational digital market, the African Union has set a goal of ensuring that 99.9% of African citizens have digital IDs by 2030.16
dIGITAL identity APPS INSTALLED 202317
DIGITAL identity APPS IN USE GLOBALLY18
2027
Picture a world where a digital ID unlocks everything — from boarding a plane to accessing health care, paying taxes and checking into a hotel. By 2030, always-on authentication and cross-border ID systems will replace cumbersome logins with silent, adaptive security. Friction will disappear as digital identities become the key to personalized, secure and trusted experiences across every interaction and location.
Toward a global solution
Although a universal digital ID that transcends every border and platform remains beyond reach, technologies are converging to create a mosaic of solutions that minimize and anonymize personally identifiable information during digital interactions. The digital identity solutions market — encompassing technologies like biometric authentication, identity verification and digital ID management — surpassed $40 billion in 2024 and is expected to reach $133 billion by 2030.19 North America is the largest market and Asia Pacific is the fastest growing.20 This trend is driven by the expansion of online services, the rise of identity-related fraud, strong adoption of ID wallet solutions and biometric devices, heightened demand across market sectors and government regulations and initiatives.21
Market forecast: Digital identity solutions22
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www.prnewswire.com/news-releases/ Dashlane Unveils the Top 20 Fastest-Growing Passkey Apps www.forbes.com/councils/forbestechcouncil/2024/ www.grandviewresearch.com/industry-analysis/ www.globalmarketstatistics.com/market-reports/ www.grandviewresearch.com/industry-analysis/ Leading in Identity, Mastercard Global Foresights, Insights & Analytics 2025 (not yet published) www.forbes.com/sites/tylerroush/2023 www.mosip.io/news_events/identifying-a-billion www.uneca.org/events/stakeholders-dialogue-on-digital-id-and-disruptive-technologies-in-africa www.juniperresearch.com/resources/ www.juniperresearch.com/resources/ www.marketsandmarkets.com/Market-Reports/digital-identity-solutions-market www.grandviewresearch.com/industry-analysis/digital-identity-solutions-market-report www.marketsandmarkets.com/Market-Reports/digital-identity-solutions-market www.securityworldmarket.com/int/News/
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Barriers to acceptance will fall, creating an open track where every business, large or small, can thrive. Smarter, more accessible payment tools will help transform checkout experiences into frictionless, hyper-personalized interactions, making seamless commerce the norm rather than the exception.
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Fifty years ago, racecar cockpits offered little more than basic dials and switches. Today they are advanced control centers, providing real-time insights and tools for precision performance. Digital wallets are undergoing a similar transformation. Once limited to storing payments and loyalty cards, wallets are now evolving into proactive financial tools and intelligent platforms capable of managing digital identities, subscriptions and health records. By 2030, digital wallets will serve as command centers for daily life, seamlessly bridging digital and physical experiences.
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Proliferating digital wallets
The total user base for digital wallets is expected to grow from 3.4 billion in 2022 to 5.2 billion — more than 60% of the world’s population — by 2026.23 Digital wallets accounted for half of global e-commerce sales in 2023, with 15% annual growth expected through 2027.24 Alongside global players like Apple Pay and Google Pay, domestic solutions are gaining traction, such as Sweden’s Swish, the country’s most downloaded fintech app in 2022.
Finance
From a starting position as a straightforward payment tool, the digital wallet is evolving to offer more choice in how and when we pay. Today, some consumers are choosing between debit, credit, installments or loyalty options from a single card or payment credential. In the future, "all-in-one" payment experiences will scale as consumers increasingly seek choice and convenience. Beyond this, the wallet is expected to operate as a financial hub capable of integrating banking, investments, lending and insurance. Features like buy now, pay later, credit scoring and personalized financial planning integrate with open banking and APIs to improve wealth management, bill payments, loyalty accounts and more.
total value of digital wallet transactions is set to rise 77%25
A series of legal and regulatory challenges are aiming to loosen the grip of established wallet providers and increase competition and consumer choice. In 2024, regulators in the EU successfully pushed Apple to give mobile wallet providers access to secure elements and contactless payment functions on iPhones, a move expected to lead to new players launching wallets.
Physical and digital convergence
Wallets are also bridging physical and digital spaces. As well as storing tickets for the daily commute, boarding passes for international travel and loyalty points, they’ve emerged as repositories for passkeys and encrypted credentials for online interactions.
e-commerce digital wallet transaction volume yearly26
Digital wallets increasingly facilitate a range of activities unrelated to payments. Super apps like Alipay and WeChat offer a comprehensive range of services, from transport to food delivery to social networking. These developments are part of the global shift toward more integrated and comprehensive digital ecosystems.
“Digital wallets are ubiquitous today; tomorrow we expect them to become smart and personal digital agents, helping people with a wide range of tasks and interactions. This is a real focal point for innovation in the years ahead.”
Pablo Fourez | chief digital officer, Mastercard
Wallet as command center
The digital wallet is embarking on a journey not dissimilar to the evolution of yesterday’s phone into the smartphone supercomputer we carry in our pockets today. It is moving from being a static repository of credentials toward functioning as an intelligent, proactive life management tool.
Digital wallets are likely to serve as virtual identity vaults, securely storing and managing IDs, passports and biometric data — allowing users to both share digital credentials and maintain control over their personal information. In Belgium, for example, more than 80% of the adult population is already registered with the Itsme digital identity app and uses it to access public services.28
The fintech app Revolut began as a digital wallet designed to address expensive overseas transactions, but it expanded into banking, trading and insurance, exemplifying how wallets can evolve into full-service financial platforms.27
Under the European Digital Identity Framework, each EU member state is required to offer an EU Digital Identity Wallet to all citizens and residents by 2026.29 This mobile app “will revolutionize the way European citizens and businesses engage with online services by seamlessly integrating convenience, safety and privacy,” said Thierry Breton, former EU Commissioner for Internal Market.
Life management
In health care, digital wallets could store medical records and vaccination certificates, book medical appointments and pay for services. They could automate tax filing by tracking income and expenses or serve as digital repositories for property deeds, mortgage records and rental agreements. By leveraging features like biometric authentication and passkey generation, they become secure, adaptive life management tools.
By 2030 wallets will seamlessly bridge physical and digital worlds. These proactive command centers will manage finances, subscriptions, health records and even travel itineraries, all tailored to user preferences. A wallet might book flights, pay taxes and adjust investments automatically. Enhanced interoperability will ensure that transactions are seamless and secure anywhere in the world.
Enhanced interoperability
The next generation of wallets will function across devices, platforms and geographies. Better cross-border functionality will enable users to make secure, real-time transactions anywhere in the world. Achieving true interoperability, however, will require extensive industry collaboration to develop and implement common protocols. Recent examples demonstrate the potential for this shift:
Industry collaboration
In 2024, London-based TerraPay formed a “Wallet Interoperability Council” to facilitate transactions across wallet platforms. Founding members of the council — Airtel, bKash, MPESA, Nequi and Sama Money — serve millions of consumers across Bangladesh, Colombia, Kenya, Senegal, Tanzania and Uganda. They are focused on merchant payments, international remittances and other use cases in cross-border transactions.30
Philippines-based fintech firm Mynt, which operates the GCash e-wallet, reached a valuation of $5 billion in 2024 following significant investments from Ayala Corp, one of the Philippines' oldest conglomerates, and Mitsubishi UFJ Financial, Japan's largest banking group. Their investments reflect confidence in the potential for expansion and interoperability of digital wallet services in emerging markets.31
Startup activity
AI in your pocket
With the rise of AI agentic models — designed to perform tasks and make decisions on behalf of users — our wallets could become semi-autonomous assistants. Imagine your wallet automatically searching for discounts or making purchases when items go on sale, for example. The way we interact with these wallets will also change, becoming more conversational and intuitive. This reflects a broader trend across industries: the transition from generic, one-size-fits-all software to personalized, proactive and intelligent agents.
Wallets are evolving as multifunction control centers — agile, intelligent and semi-autonomous agents with the potential to transform the way we manage our lives.
www.huspi.com/blog-open/how-digital-wallets-revolutionize-global-payments-and-offline-retail/ www.paynet.pro/post/the-50-growing-market-share-of-digital-wallet-payments www.juniperresearch.com/press/digital-wallets-transaction-value-16-trillion-2028 www.paynet.pro/post/the-50-growing-market-share-of-digital-wallet-payments www.blog.ibagroupit.com/2024/ www.brusselstimes.com/1029912/ www.ec.europa.eu/digital-building-blocks/ www.terrapay.com/media/ www.reuters.com/markets/deals/
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Imagine if motorsports opened their tracks to newcomers, giving them equal access to advanced technology and resources. Payments acceptance is experiencing a similar revolution. From micro-merchants to global enterprises, democratized acceptance technologies are breaking down barriers, enabling greater participation and expanding the types of payments accepted. By the end of the decade, these innovations will enhance and personalize experiences for consumers and merchants alike, both online and in store.
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Acceptance growth and challenges
Some 130 million small to medium-sized enterprises around the globe still lack digital acceptance capabilities,32 a disadvantage in an economy moving at speed away from cash. But that’s changing, with the democratization of technology that turns any smartphone or tablet into a point of sale device, for example. In store, solutions like Tap on Phone enable any business to accept contactless card or digital wallet payments without paying for costly POS hardware (a traditional POS set-up can cost a merchant more than $10,000 each year).33 The most advanced solutions are software-driven (SoftPOS), making any sort of hardware unnecessary, while others rely on unobtrusive modules that plug into the phone or tablet. Traditional POS devices remain robust, high-volume solutions,34 but the number of merchants using SoftPOS in 2027 is expected to be five times that of 2022.35
For e-commerce, solutions like Click to Pay and passkeys continue to transform acceptance online. Even with the rise of cutting-edge digital payment solutions, online shopping still faces challenges and friction points. Fraud rates are seven times higher online than in stores,37 creating headaches for cardholders and huge losses for merchants and card issuers. Plus, according to Mastercard research, nearly two-thirds of shoppers still struggle through manually entering their card details, with 25% of carts abandoned because checkout is too complex or slow.38
Integrated platforms
There are more and more ways for smaller business owners to step into the digital economy. E-commerce platforms that offer the smallest entrepreneurs zero-code means to establish their own virtual storefronts, bundling in payment processing, inventory management and social commerce solutions, are showing healthy growth across the world. Shopify saw 5% growth in the number of storefronts it hosts over 202439; Squarespace saw 7% growth40; and Wix saw 13% growth.41 China’s JD.com, meanwhile, posted approximately 16% average revenue growth in the five years since 2019.42,43 Regionally-oriented platforms are also doing well: Poland’s Allegro, for example, has seen its domestic customer base steadily expand, reaching 14.6 million by the end of 2023.44
Technology players enter the mix
Upwards of 50% of small businesses have turned to independent software vendors like Square, Clover and Stripe as payment providers,45 increasingly drawn by value-added elements like bookkeeping, inventory and fraud solutions. As a result, this sector is expected to be worth more than five times in 2031 what it was worth a decade earlier.46 These vendors will also continue to broaden access to accounting, inventory management, invoicing, data, tax reporting and other solutions, giving smaller players tech tools that help level the field with larger competitors. There is still a lot of room for growth: Just a quarter of U.S. small enterprises used inventory management tech in 2024; only 16% used cash flow management platforms; and 54% used accounting solutions.47
Checkout gets smarter
Acceptance solutions increasingly use AI to improve the checkout experience and provide the insights necessary to address problematic transactions — whether due to fraud, expired credentials or insufficient funds. False declines afflicted 56% of U.S. consumers in 202348 — and 45% of customers who see declines abandon their purchases.49 Armed with better transaction intelligence, merchants can decide how to proceed when payments don’t work — whether to retry the transaction, for example, and the best time do so. One optimization solution has salvaged 20% of originally unsuccessful payments, adding up to billions of dollars of merchant revenue.50
% U.S. consumers who saw false declines
% U.S. consumers who abandoned their purchases after a decline
“We’re going to see democratization of acceptance across three planes: more merchants entering the ecosystem, more types of payments accepted and an increase in the number of technology partners involved. This will create a more inclusive and innovative commercial environment and a better experience for consumers.”
Jennifer Marriner | executive vice president, Global Acceptance Solutions, Mastercard
Analytics for all
As acceptance is democratized and expands geographically through card, digital wallet and other types of payments, data analytics can better serve the merchant. Analytical solutions geared to the needs of smaller enterprises are standard features in SoftPOS packages, crunching data on peak transaction times, average transaction value, regional and seasonal sales trends, individual salesperson performance, preferred payment methods and more.
Revenue growth for small businesses that use data analytics51
A more personalized experience
E-commerce continues to lead the way in innovation, whether it’s virtual changing rooms to reduce online returns or language-based, zero-click shopping searches. But 2030 may be when the brick-and-mortar store closes the gap, precisely gearing discount offers and marketing to individual consumers. With customer consent, systems can pinpoint relevant locations in store and send tailored offers or recommendations for nearby merchandise.
Consider a future where checkout brings consumers a range of options and benefits, and stops being a chore. Imagine personalized retail that is smart and incisive, not clumsy and intrusive. And an in-store experience without queues and delays.
Goodbye checkout queue?
Ultra-wideband technology and sensored environments have enabled both proximity-based checkout and no-checkout stores. Adoption makes most sense when there is a clear use case, such as in sports stadiums, where rapid retail is all-important for selling food and merchandise. Nearly a hundred52 of Amazon’s Just Walk Out-powered stores operate in more than 80 stadiums53 in the U.S., Canada, the U.K. and Australia. Five new such stores opened at NBA arenas for the 2024-2025 season54 and 14 new ones opened at NFL stadiums for this season.55 Germany’s Aldi discount supermarket chain has operated a no-checkout store, Aldi SHOP&GO, in London since 2022. In early 2024, the store made it possible to shop simply by tapping a payment card or smartphone at the store’s entrance, rather than having to download an app.56
www.reuters.com/markets/deals/ www.pymnts.com/news/point-of-sale/ www.pymnts.com/news/point-of-sale/ www.insights.flagshipadvisorypartners.com/ www.pymnts.com/news/point-of-sale/2024/ www.pymnts.com/news/point-of-sale/2024/ Home | Mastercard Newsroom Home | Mastercard Newsroom www.storeleads.app/reports/shopify www.storeleads.app/reports/squarespace www.storeleads.app/reports/wix www.stockanalysis.com/stocks/jd/revenue/ www.ir.jd.com/news-releases/news-release-details/ www.ainvest.com/news/ www.mckinsey.com/industries/financial-services/our-insights/ www.transparencymarketresearch.com/ www.uschamber.com/assets/documents/ www.statista.com/statistics/ www.checkout.com/newsroom/checkout www.checkout.com/blog/payment-retries-guide www.vorecol.com www.chainstoreage.com/five-nba-arenas-deploy-next-gen-amazon-just-walk-out-shopping-platform www.chainstoreage.com/stadiums-colleges-continue-deploying-amazon-just-walk-out-platform www.chainstoreage.com/five-nba-arenas-deploy-next-gen-amazon-just-walk-out-shopping-platform www.chainstoreage.com/stadiums-colleges-continue-deploying-amazon-just-walk-out-platform www.aldipresscentre.co.uk/business-news www.retail-insight-network.com
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SoftPOS growth36
projected growth in global SoftPOS growth by 2027
of merchants expect SoftPOS to replace traditional terminals
"Consumers crave choice and control over their payments. They want to be in the driver’s seat and set their payment preferences digitally, making checkout faster, more convenient and even more personalized.”
Bunita Sawhney | chief consumer product officer, Mastercard
In racing, skilled drivers use the slipstream to reduce drag and gain speed. Businesses are taking a similar approach, embedding finance into operations to eliminate inefficiencies and unlock new opportunities. Advances in APIs and AI are enabling payments to seamlessly integrate into broader workflows, from supply chain management to payroll. By the end of the decade, payments will evolve from manual, time-consuming tasks into intelligent, nearly invisible processes — fueling business growth while minimizing friction.
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Improving B2B payments
Compare today’s typical consumer payments experience — increasingly seamless and secure — with the equivalent commercial experience — often slow, disjointed and dependent on a multitude of enterprise resource planning (ERP) platforms and processes to invoice customers, pay suppliers and manage transactions. Now businesses increasingly expect a consumer-grade experience as standard, with all the benefits that innovation, open banking and API-enhanced integration bring. The market is responding: The B2B payment solutions market is expected to grow by almost 12% annually over the 2023-2030 period.57
Almost 50% of SMEs use multiple payment tools
SMEs: A market opportunity58
Small and mid-sized enterprises need help with B2B payments
81% of SMEs would switch to an integrated payment platform
36% of SMEs earning <$150,000 say cost prevents such a switch
In supply chain
Extending embedded finance
Embedded finance — the integration of financial services into non-financial platforms to improve efficiency and user experience — has seen its highest-profile applications in the consumer realm, where it’s giving individuals new control over their spending, money management and investing. But in the more complex realm of B2B payments, embedded solutions are catching up:
Embedded solutions are facilitating the B2B equivalent of buy now, pay later, in which companies can spread out payments to suppliers over a period. Credit solutions integrated into ERP platforms are instantly extending loans to suppliers, transforming the invoice process.
In the treasury office
Payroll innovations are automatically disbursing salaries and handling tax documentation and other bookkeeping matters.
SMEs would spend four times as much on B2B purchases from their suppliers’ websites if embedded finance solutions were available.59
Virtual cards: customized controls
virtual card transactions
Virtual cards give unprecedented control over when, where and how they can be used. Business travelers can receive virtual cards that work only for certain nights at certain hotels; fleet drivers can be issued virtual cards that work exclusively for fueling; and contractors can be provided with credentials that last as long as the job they’re doing — an hour or a week. Since payment comes straight from company accounts, back-end reconciliation work is minimized and authorization streamlined.
The number of virtual card transactions is predicted to increase by almost 300% over the 2024-2028 period.60
Mastercard has teamed up with Remedinet to offer virtual cards as a B2B payment method in the health care space. Mastercard’s virtual cards will be embedded throughout the platform to streamline health care ecosystem payments — from insurers to providers, for example — and make them more secure. The Mastercard-Remedinet partnership will also improve exchange of claims-related information, making insurance processes more efficient.61
We’re bringing a consumer-grade experience to the corporate environment, where software-driven business systems are being enhanced and challenged by more agile solutions. B2B payments will play a vital role in driving this next wave of change and empowering businesses of all sizes.”
Raj Seshadri | chief commercial payments officer, Mastercard
In dynamic discounting
Embedded in ERP systems, discounting solutions may assess cash flow, payment history, risk and contracts to determine discount decisions for customers.
Smarter automation
As seamless payments become a baseline expectation for organizations, the next step is toward intelligent, embedded and programmable payments that deliver new levels of automation and efficiency.
In forecasting
Poor cash flow management is to blame for as much as 82% of business failures.62 Solutions that sift oceans of payment, customer and supplier information to ensure optimal liquidity could mitigate this problem.
This shift toward intelligent, invisible operations should have dramatic effects for how companies work. In a recent survey of global finance function leaders, 56% said that AI would have a “revolutionary” effect on financial processes, particularly when it comes to efficiency and risk.63
Oracle’s Abstract Dynamic Discounting solution slots suppliers into categories based on their reliability, orchestrates dynamic discounting campaigns and automates discounted payments.64 Hearst was an early user of the technology: The media company said in 2023 that using it for discounting cut its finance function costs by 20%.65
JPMorgan’s Cash Flow Intelligence tool uses AI to generate cash flow predictions in near real time. Domino’s Pizza is among the tool’s early adopters: It saw a 90% drop in “manual data cleanup efforts” as well as less human error and easier reconciliation.66
AI drives claims process efficiency67
Predicted reduction in claims processing times with AI use
Lower cost of claims processing with AI use
Imagine small business solutions that help optimize cash flow, automate payroll and dynamically offer supplier discounts. Payments will flow invisibly in the background, freeing business owners to focus on growth, innovation and customer success. Intelligent workflows will eliminate inefficiencies and create opportunities, making payments a more effective enabler of commerce.
Programmable payments, smarter contracts
Programmable payments automate transactions according to “if this then that” conditions, without third-party intervention. But as they become more sophisticated, they can respond intelligently to a wider, less predictable set of inputs, dynamically scheduling and adjusting payments in response to market conditions, for example, or proactively identifying nefarious activity before payments are executed. Meanwhile, blockchain-based solutions provide transparency and immutability, reducing disputes and minimizing the risk of legal issues. Companies paying for raw materials of a certain provenance, purity or quality will know exactly what they’re getting. The same goes for ethical and sustainable sourcing, a differentiator in sectors such as fashion.68
Dubai Customs has established a blockchain-based logistics solution that will help companies track goods moving along supply chains in the United Arab Emirates and other Gulf countries. Smart contracts will help expedite customs clearance protocols. Dubai Customs cites transparency and efficiency as the solution’s prime benefits.69
Embedded finance will operate in the slipstream of business operations, transforming payments into invisible yet indispensable tools. By automating workflows and delivering real-time insights, businesses will focus on growth and strategy, with payments as an unseen accelerator driving the race forward.
www.fortunebusinessinsights.com/b2b-payments-market-108853 www.pymnts.com/news/b2b-payments/2024 www.mckinsey.com/industries/financial-services/ www.juniperresearch.com/press/ www.fintechmagazine.com/articles/mastercard-supporting-b2b-healthcare-with-payments-solution www.freightwaves.com/news/2017 www.wolterskluwer.com/en/news/ www.community.oracle.com/customerconnect/events/ www.appsruntheworld.com www.jpmorgan.com/insights/payments/ www.experionglobal.com/insurance-claims-automation/ www.fashiondive.com/news/ www.mediaoffice.ae/en/news/2024/july/
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In motorsports, telemetry captures every detail — engine performance, tire wear, braking force — enabling teams to predict and respond with precision. Payments are undergoing a similar transformation, with AI analyzing vast streams of transactional data to detect anomalies and prevent fraud in near real time. As these systems evolve, insights will shift security from a reactive process to a proactive defense — anticipating threats and neutralizing them before they materialize.
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Cybercrime — a $14 trillion industry
If cybercrime were measured in GDP, only the economies of the U.S. and China would be bigger.70 This explosion in criminal activity has been driven by several factors. It’s perceived as low risk, with bad actors often beyond the reach of law enforcement. Technology has also reduced the barriers to entry — a laptop and access to the dark web is enough for beginners. And cybercrime is highly scalable, with the biggest operations exploiting advanced technology to upsize their operations. As such, the industry is expected to grow to $14 trillion by 2028.71 But technology is also the answer to the problem, providing unprecedented visibility of the criminal landscape and enabling split-second interventions to minimize, and increasingly pre-empt, attacks on payment networks and businesses.
Payments — target and innovator
Payment systems are a key target for criminals, and so the payments industry has become an innovative force in cybersecurity. Mastercard repels 200 attacks each minute,73 and its Safety Net solution has successfully prevented $50 billion in fraud between 2022 and 2024. Another AI tool, Decision Intelligence, assesses fraud risk in real time on 143 billion transactions each year and is capable of analyzing a trillion data points. In January, Mastercard acquired the world’s largest threat intelligence company, Recorded Future, to offer a holistic and global cyber defense capability.74
Faster payments, faster fraud
Cards set the standard for fast and convenient payments, and their success has generated the same expectation of all payments, whether account-to-account, peer-to-peer or business-to-business. That speed has created opportunities for fraudsters, who use social engineering techniques to target humans as the weak link in the payment chain, duping senders into willingly authorizing fast payments to bad actors, often before banks have time to intervene. In the U.S., three in 10 households have lost money to a scam in the last five years.75 The same research highlights the reputational damage such scams pose to financial providers: Thirty percent of scam victims ditch their financial institution as a result. Regulators are paying close attention — the U.K. now requires all banks in the Faster Payments System to reimburse fraud victims within five days, for example. And technology is helping too — Mastercard's Consumer Fraud Risk tool uses AI to spot suspected APP fraud in near real-time, giving banks an opportunity to block a payment before it has left the account.
Deepfakes
Digital partner to the flesh-and-blood fraudster, the deepfake once again focuses on the weak link in payments — humans. The most common deepfakes are documents, but video and audio deepfakes are on the rise. Regulators in the U.K. report that two in five people encountered a deepfake scam online in 2023, yet fewer than one in 10 feel confident in their ability to spot them.76
Business exposure to deepfakes77
have experienced losses due to deepfakes
lack confidence detecting deepfakes
“Living in a hyperconnected world brings us many benefits but also presents challenges. Cybercrime is growing exponentially, so we need to work together with other players to innovate — and regulate — in the right way to protect the entire digital ecosystem.”
Johan Gerber | executive vice president, head of Security Solutions, Mastercard
In 2024, the British engineering company Arup was the victim of a deepfake fraud when an employee in Hong Kong was duped into sending HK$200 million to fraudsters while on a conference call populated by deepfake participants posing as senior company officers. The company said it hoped its experience would raise awareness of the increasing sophistication of cyber-attackers.78
Global stability
By 2030, cybersecurity will cement its role as a societal bedrock, safeguarding critical infrastructure and maintaining global stability. From energy grids to digital health care systems, rail networks to air traffic control operations — all are considered viable targets for attack. Payment systems, fundamental to the global economy, will come under increased scrutiny from numerous parties, ranging from regulators to national security bodies on one side and hostile nation-states allied with organized criminals on the other.
Adaptive solutions
New adaptive models are emerging that leverage technologies like privacy-enhancing methods and federated learning. These approaches enable a diverse group of participants to share insights securely. For example, a fraud detection model can instantly learn from an attack on any single bank and act to protect the entire network from similar threats in real time.
Proactive AI
AI progresses from detecting foul play to anticipating it, identifying potential problems and taking preemptive action without explicit instructions. Imagine instant threat containment, self-healing networks, search and destroy of zero-day exploits, and the increased use of digital twins to simulate and test emerging threats.
Global AI in cybersecurity market79
Imagine a network of intelligent systems that work proactively together to protect the payments infrastructure, exchanging insights and sharing warnings between one another. They will automatically seek out the patterns and anomalies that indicate ripples of suspicious activity and neutralize them well before they become waves of fraud.
Age of quantum
Quantum computing can perform complex calculations exponentially faster than today’s computers, and as such poses a challenge to the encryption methods used to secure payments and protect data. The current technology and underlying qubits are unstable and prone to error but advancing quickly. In the next five years, companies will begin to leverage quantum capabilities in tandem with high-performance computing through hybrid workflows. Organizations that have not already deployed quantum-resistant solutions are moving to do so now.
potential quantum computing threat to Bitcoin encryption80
Trust as currency
Never has brand reputation been so centered on trust. By embedding AI into proactive security measures, payments will be protected by continuous, adaptive defenses, transforming cybersecurity into a competitive differentiator.
AI-powered security systems will transform payments into a self-defending network, preemptively neutralizing threats before they can materialize. Like race telemetry, these systems will ensure precision, safety and performance — making trust in payments the industry’s strongest differentiator.
Top 5 countries by GDP ($TRILLION)72
www.sponsored.bloomberg.com/quicksight/check-point/ www.statista.com/markets/424/topic/ https://www.instagram.com/csstimes/p/C-8X50rCtPi/ www.mastercardservices.com/en/capabilities/cyber-quant www.newsroom.mastercard.com/news/press/2024/september/ www.info.featurespace.com www.ofcom.org.uk/online-safety/illegal-and-harmful-content/ Regula Deepfake Trends 2024 www.theguardian.com/technology/article/ www.statista.com/topics/12001/ www.wsj.com/tech/cybersecurity/
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By 2030, the payments industry will operate as a team, co-creating groundbreaking solutions that serve consumers and businesses alike. Dynamic partnerships will create interconnected solutions that enhance inclusion, scale commerce and redefine how the world transacts.
Success in motorsports relies on collaboration across a diverse team — drivers, engineers, data analysts and sponsors. Similarly, the payments sector is evolving beyond traditional bank-fintech models toward dynamic ecosystems of established players, startups and non-traditional collaborators. Together, they are co-creating innovative solutions, from embedded finance to integrated citywide payment systems, paving the way for a more inclusive and connected commerce landscape.
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Expanding the team
We are moving beyond the bank-merchant-fintech models that have defined payment partnerships in recent years. New participants include independent software vendors, crypto companies, social media platforms, telecoms businesses, government agencies and vertical market players across health care, travel, automotive, gaming and e-commerce. These entities work together to co-create opportunities, leveraging data sharing via open banking, connected experiences via embedded finance and innovative models encompassing subscription, installment and omnichannel.
Driving diversification
In some countries, open banking has been a force of diversification in the payments landscape, broadening choice for consumers and merchants and opening the door to innovation. Governments in Argentina, Europe, Chile and the U.K., among others, have allowed fintechs to offer payment services to businesses without a banking license. Platforms, wallets, apps, neobanks and other entities have arrived to plug gaps in the payment experience. Nowhere is this more evident than in the widening of choice for merchants, frequently in cooperation with existing payment services and financial institutions. Sometimes the speed of innovation outstrips the rate at which it can be efficiently integrated — a third of smaller businesses rely on four or more different financial service providers,81 for example. In the future, the focus will be on finding ways to join the dots to create efficiencies and resolve disjointed workflows.
Incubating innovation
Investors, strategic funds and startups all stand to gain in this environment, as evidenced by the race to invest in financial technology. In the first half of 2024, global fintech investment surpassed $50 billion across more than 2,000 deals including venture capital, private equity and mergers and acquisitions.82 Mastercard’s award-winning startup engagement program, Start Path, has supported 400-plus startups that collectively went on to raise more than $15 billion in capital post-participation. Embedded finance solutions for merchants are a key growth area. A current Start Path partner, Monite,83 offers SMEs a way to plug payments and finance applications into their existing systems.
“Innovation comes to life through partnerships, and we see increased appetite to collaborate and co-create, rather than advance in siloes. By combining expertise, joining forces to understand customer behaviors and needs, and bundling complementary assets, businesses can scale impactful technologies, expand reach and unlock mutually beneficial growth.”
Eimear Creaven | co-president, Global Partnerships, Mastercard
Platform ecosystems
Large-scale platforms where banks, fintechs and technology firms will offer end-to-end financial services — such as payments, lending and wealth management — under a unified interface.
New models of collaboration
As these disparate entities partner in new ways, a key challenge is to provide payment and adjacent services that transcend borders and rails and deliver frictionless experiences. Potential operating models include:
Local collaborations
Partnerships among regional banks, telecom providers, government agencies and fintechs could create localized payment ecosystems in underserved markets.
Open banking 3.0
A more advanced stage of open banking where APIs evolve into universal interfaces to facilitate frictionless integration across geographies and industries.
Imagine a smart city app that lets users pay utility bills, reload transit passes, book government services and manage financial accounts, all in one place. By 2030, partnerships between utilities, government agencies, banks, tech providers and transit networks will create interconnected ecosystems that make city life seamless.
Sector-specific partnerships
Privacy-enhancing technologies (PETs)
Privacy-enhancing technologies (PETs) are emerging as powerful insight-sharing tools within and across industry sectors. PETs minimize the exposure of Personally Identifiable Infromation (PII) while enabling the distribution of insights derived from digital interactions and transactions. Federated learning techniques and secure multi-party computation (MPC) will be increasingly used by a wider range of organizations to enhance models without compromising data privacy.
New ways to share insights
As consumer and business expectations consolidate around frictionless, secure and instant transactions, it will necessitate enterprises sharing data and insights to enhance partner-delivered experiences. For example, privacy-enhancing technologies are emerging as powerful insight-sharing tools within and across industry sectors. They minimize the exposure of personally identifiable information while enabling the distribution of insights derived from digital interactions and transactions. Federated learning techniques and secure multi-party computation are additional tools that will be increasingly used to enhance models without compromising data privacy.
www.ey.com/en_us/insights/banking-capital-markets/ www.kpmg.com/uk/en/home/media/press-releases/2024/ www.monite.com
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Conclusion
Examples of players and partnerships expanding the ecosystem
Independent software vendors
Alternative payment platforms
Regional payment schemes
Neobanks
Industry alliances and standards bodies
Payment orchestration platforms
The foundation of a more connected payment ecosystem is interoperability — across schemes, rails and borders — which will be an accelerant to every type of payment.
Data is the fuel of our industry and AI gives traction to the trends.
Mastercard is dedicated to leading this journey. As we embrace the opportunities and challenges ahead, we invite all stakeholders to join us in shaping the future of payments, embracing collaboration, anticipating disruption and delivering seamless, secure and scalable solutions.
Each transaction begins with authenticated identities that ensure the right people or entities exchange the right data. Identity networks are also critical enablers of digital wallets and personalized checkout experiences.
“The challenges ahead are as significant as they are exciting. Success will belong to those who not only have a keen eye on the road ahead, but also the agility to adapt to a fast-changing environment. It’s a team endeavor more than ever before. By embracing innovation, navigating complexities and prioritizing inclusivity, we can accelerate toward a future where payments drive global prosperity.”
Ken Moore | chief innovation officer, Mastercard
www.gatesnotes.com www.cnbc.com www.venturebeat.com www.venturebeat.com www.builtin.com www.wsj.com www.wsj.com www.mhlnews.com www.mhlnews.com www.pages.awscloud.com www.cio.com www.cio.com www.cio.com
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Three themes emerge from the trends presented in this report: identity, interoperability and intelligence.
identity
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