This is an excerpt from The Future of US Digital Payments 2025: ACH & Beyond.
New technologies are transforming the way transactions are initiated, processed, and settled and at the same time, challenging what the US knows of their payment infrastructure today.
Real-time processing is now converging with
programmability, cryptographic security, and intelligent automation to ensure digital payments are smarter, faster, than ever before.
US Faster Payments Council executive director Reed Luhtanen opined to Finextra that: “What used to take days to complete, can now happen instantaneously, providing significant benefit to both those entities making and receiving payments.
“As these technologies continue to evolve and leverage other advancements such as AI and the like, these faster transactions will bring even more value and benefit to the ecosystem, making them the go-to payment option of the future.”
Future technology stacks must be event-driven to meet customer needs
Gone are the days of relying on batch processing and monolithic architectures: payments providers must no longer be forced to contend with latency and fragility. The payment stack of the future must be event-driven so that transactions can be processed and
orchestrated in real-time.
In Citizens’ view, although not an emerging technology, it is widespread adoption of APIs that will improve the relationships financial companies have with their customers.
“API platforms have been fundamental in the growth of embedded finance, allowing for financial products to be integrated into applications customers are already using in their day to day,” said Taira Hall.
Financial products that leverage AI and ML must be embedded into existing applications
AI and machine learning (ML) models are also being embedded into transaction pipelines for real-time fraud detection, with behavioural biometrics,
device fingerprinting, and anomaly detection applied to every transaction.
These technologies are also being used for credit scoring on the fly, where alternative data such as cash flow analysis is used to authorise lending at PoS, and to predict the likelihood of success or failure across multiple payment rails.
Citizens agrees that AI can improve efficiency across organisations and streamline the payments process, but in the future. Taira Hall, head of payments at Citizens shared that, “it is likely AI will shift from an efficiency driving tool, to a driver of
innovation and competitive differentiation through greater customisation and refinement.”
To succeed in 2025 and in the future, financial products that leverage data-driven technologies such as AI, ML, and predictive analytics must be used, in the first instance to inform which products should be offered first to which set of customers.
Green Dot’s Renata Caine advised that “hyper-personalising a customer’s experience using data based on user behaviour will increase their satisfaction with a product and lead to further adoption of a company’s offerings.”
Alongside this, Caine added that “promoting the use of predictive analytics to maintain fraud prevention and customer protection will build customer trust and longer-term loyalty. Data-driven technologies will become a competitive advantage for fintechs
that invest heavily in them.”
Being tokenisation early adopters may be advantageous for the future
The future of US digital payments is moving in a direction where systems must be able to make autonomous, risk-adjusted decisions with latency in milliseconds, without disrupting security or compliance.
Furthermore, as transactions become more automated, decentralised identity, zero-knowledge proofs, and continuous monitoring may also be increasingly integrated into the transaction process.
While some financial players may already be tuned in to these developments, beyond 2025 or even 2030, use cases for tokenisation will come to fruition.
By separating the logic of a payment from the movement of the funds, tokenisation is redefining how value is represented and transferred.
Our outreach to banks already leveraging tokenisation revealed that programmable assets such as stablecoins could be leveraged for escrow, DLT-based settlement for cross-border clearing, and permissioned blockchain ledgers for interbank transfers, in the
very near future.
Further, smart contracts could be embedded into token transactions to allow developers to code business rules into financial flows, alleviating the burden of reconciliation, yet bolstering transparency.
What does the industry think of the future of tokenisation?
Gloria Wan, general manager of Kinexys Liink at Kinexys by J.P. Morgan, the firm’s blockchain business unit, explained to Finextra that a “shared, trusted ecosystem is necessary for institutions to move information and money faster in a world that values
speed and ease of use more than ever before.”
Kinexys Liink, for example, is a private permissioned information network, which connects banks, fintechs and corporations enabling efficient and secure information exchange in real time.
With this in mind, Wan explained that because banks hold significant amounts of data and over time, have invested in tools and analytics to improve internal processing, more can be done to “convert individual data assets into collective insight, and investment
in data maintenance into new revenue streams.
“Data will create an entire new value chain for the payment and technology industry.”