May 2 2025
by Payments Intelligence
What’s the article about?
The strategic priorities for the payments industry in 2025, as discussed by senior payments leaders who attended a Payments Labs roundtable.
Why is it important?
It highlights how innovation, regulation, AI, and risk management are shaping the future of payments and impacting business models.
What next?
Firms must build resilience, align with evolving regulations, and invest in practical innovation to stay competitive in a volatile landscape.
In a recent Payments Labs session hosted by The Payments Association (TPA), senior leaders from TPA’s Payments Leaders Group convened for an in-depth discussion on the most pressing developments shaping the payments industry. Participants tackled five central themes: underleveraged innovation, the operationalisation of AI, regulatory challenges, the evolution of embedded finance, and strategic risk planning for 2025 and beyond.
With a mix of legal, operational, and executive expertise at the table, the conversation was both strategic and grounded in day-to-day realities. Participants shared candid perspectives on how regulation, customer expectations, and technology are reshaping business models and industry standards. The dialogue reflected the increasingly complex landscape that payments leaders must navigate while highlighting where opportunities for competitive advantage remain.
The panel opened by discussing innovations in payments that remain significantly underleveraged despite their transformative potential. Among these, the integration of blockchain and stablecoins in cross-border payments and treasury management emerged as a central theme.
Iana Dimitrova, CEO of OpenPayd, highlighted this as a key area of opportunity. “Four or five years ago, digital assets were mostly about speculation,” she noted. “Now, digitally native businesses are leveraging blockchain and stablecoins not to speculate, but to optimise cost and speed in cross-border transactions.” To meet this demand, OpenPayd has expanded its licensing infrastructure to include virtual asset service provider (VASP) capabilities. “Our clients are already transacting in stablecoins like USDC, USDT and RLUSD.
They’re not asking ‘if,’ they’re asking ‘how’ we support it.”
Guy Noble, CEO of Guavapay, supported the potential of blockchain but urged the industry not to lose sight of user needs. “Speed is great, but it’s not always the key,” he said. “What matters is delivering what’s critical to the customer—whether that’s speed, interoperability, or something else entirely. Without a uniform approach, we risk building inefficiencies.”
From a regulatory vantage point, Jazmin Achi, board member and director of Privat 3, turned to payment initiation services (PIS) under PSD2—an innovation that once promised much but has underdelivered due to inconsistent implementation. “When PIS was introduced, it seemed like the future,” she remarked. “But open banking has struggled due to inconsistent API access from incumbent banks. I hope PSD3 will correct this.”
Rebecca Hickman, partner in financial regulation at Addleshaw Goddard, echoed this concern. “The lack of a commercial model for PIS is a core problem in the UK,” she explained. “Unless we can make it operate on par with cards—and fund incentives appropriately—it won’t gain user traction.” She also referenced a broader issue of regulatory inertia: “The previous government had plans to revoke the Payment Services Regulations and embed them into FCA rules. Since the change in administration, no one knows where that stands.”
When the panel turned to artificial intelligence, a consistent theme emerged: cautious optimism. While AI is beginning to show real operational value—particularly in fraud detection, customer service, and compliance—its implementation across the payments sector remains careful, shaped by regulatory scrutiny, data governance, and practical resource limits.
Dimitrova detailed how OpenPayd is applying AI to improve internal efficiency and external engagement. The technology, she explained, is already being used in productivity tools and across commercial functions such as sales, account management, and customer success. However, the most immediate benefits have come in compliance. “Reducing manual reviews in transaction monitoring has been a major win,” she said. But she was quick to point out the limitations of generic solutions in a B2B context. “AI models must be trained on data that accurately reflects our client base and transaction patterns. Off-the-shelf datasets lack the necessary nuance.”
Noble echoed this view, describing Guavapay’s early-stage adoption of AI in areas such as customer service and commercial decision-making. He stressed that AI’s effectiveness hinges on deep contextual understanding. “These tools aren’t plug-and-play. The real value only comes when AI is embedded within the unique dynamics of your business.”
Achi advocated a hybrid approach, where AI accelerates routine processes but does not replace human oversight. “In regulated environments, the human role remains essential,” she said. “We’re using AI to support decision-making—not to override it.”
Hickman brought a regulatory lens to the discussion. While clients are clearly drawn to the operational efficiencies AI can offer, she noted, concerns around data protection and compliance remain paramount. “The most common question is: how do we harness AI while safeguarding data integrity and fulfilling GDPR requirements?”
As Dimitrova summed up, “The biggest barrier—and the most critical success factor—is training the models with relevant, proprietary data.” Until that challenge is met at scale, the role of AI in payments will remain both promising and constrained.
The panel unanimously identified regulatory complexity as one of the most significant and enduring headwinds facing the payments industry—especially for younger firms attempting to enter the space or scale quickly across jurisdictions.
Dimitrova spoke candidly about the disparity between incumbents and newer entrants. “Regulation can be a real growth barrier,” she said. “For scale-ups like us, we’ve built regulatory muscle over the years—our teams understand governance, conduct rules, and operational resilience. But many new digital asset firms are led by technologists, not compliance professionals. Concepts like three lines of defence or board composition are often completely foreign to them.”
She pointed to two prominent European regulatory frameworks—MiCA and DORA—as both necessary and problematic. “They’re vital for ensuring consumer protection and infrastructure resilience. But the practical impact is that many firms are now looking outside Europe and the UK to build their businesses. The burden, especially for those without compliance DNA, can stifle innovation.”
Achi added a historical perspective, recalling the early days of fintech. “When the first wave of fintech came through, it was all about the technology. Compliance was seen as a blocker, not a foundation. That attitude is still present today in parts of the industry. If you’re entering a regulated space, the onus is on you to understand the rules—not the other way around.”
Noble offered a counterpoint. “Regulators get a bad rap, but I think their expectations are fair. If I were in their shoes, I’d want firms to be brilliant at the basics. Unfortunately, many aren’t—and that creates friction for everyone else who is trying to do things properly.”
Hickman echoed the concern, highlighting the lack of clarity in the UK. “We’re in limbo. There’s talk of reforming payments systems regulations, of shifting elements into the FCA handbook, but nothing is concrete. Consultations on safeguarding, strong customer authentication (SCA), and cross-border rules are overdue. That uncertainty makes strategic planning extremely difficult.”
The panel took a measured stance on embedded finance: a concept rich in promise but, in practice, still uneven in its impact. While embedded payments were widely acknowledged as the most mature and value-generating application, other areas—such as embedded lending and insurance—remain fragmented and often hindered by ambiguous governance structures.
Dimitrova made a clear distinction: embedded payments are currently the only area demonstrating “tangible value,” particularly in terms of streamlining customer experience and improving transaction efficiency. However, she cautioned that broader use cases have yet to prove themselves at scale or deliver sustained strategic benefit.
Jachi emphasised the risks that come with deeper integration. As more financial services are embedded into third-party platforms, she noted, the lines of accountability blur. “Who owns the risk?” she asked. “Who’s responsible for compliance, data protection, or consumer duty?” Without clearly defined responsibilities, such integrations risk creating more operational complexity than they resolve.
From a broader industry perspective, Noble warned against innovation for its own sake. While enthusiasm for the ‘as-a-service’ model abounds, he argued that true strategic value only emerges when these solutions address concrete customer pain points. Otherwise, they simply add layers of complexity and integration overhead.
Hickman brought a legal and regulatory view, describing embedded finance as a modern reworking of white-labelling—amplified by APIs and digital channels. “We’ve seen this before,” she said, “but what’s changed is the scale and the branding.” As non-financial platforms increasingly offer financial services under their own names, she pointed out, this raises significant regulatory challenges.
She also underlined the need for consumer transparency. “If you’re using a financial product via a retailer or digital platform, it must be clear who’s behind it,” she stressed. This clarity is essential for ensuring proper conduct, redress mechanisms, and protection of consumer rights—an area of growing regulatory scrutiny.
The roundtable closed with a forward-looking discussion on the key strategic risks facing the payments sector as it approaches a period marked by heightened volatility—economic, geopolitical, and technological. In this environment, resilience has shifted from aspiration to necessity.
Dimitrova encapsulated the prevailing sentiment with a candid assessment: “The only certainty is uncertainty.” She described a more cautious posture being adopted across her organisation, particularly in relation to growth projections and capital strategy. With tighter funding conditions and capital decisions increasingly centralised in the US, she noted, businesses must now navigate evolving expectations around returns, risk profiles, and financial runway.
Noble focused on operational readiness. He stressed the need for proactive scenario planning, arguing that success hinges on a company’s ability to assess performance continuously and adapt quickly. “It’s no longer about reacting,” he said. “Rigor and agility must now go hand in hand.”
For Achi, resilience extends into infrastructure and supplier networks. She spoke of a renewed emphasis on business continuity planning and supplier redundancy. The goal, she explained, is to “stress-test not only your internal operations, but your entire vendor ecosystem.” In her view, diversification has become essential, not optional.
Hickman drew attention to an increasingly acute risk: payments fraud. While policy efforts have so far focused on consumer reimbursement, she called for a stronger focus on prevention. “We need coordinated, cross-industry action,” she urged, suggesting that this might even require a new national body dedicated to combatting financial crime.
Taken together, the panellists’ comments painted a sober but constructive picture. As the industry looks to 2025 and beyond, sustainable success will rest not on audacious risk-taking, but on strategic caution, operational resilience, and a firm capacity to navigate disruption.
The Payments Lab roundtable offered a nuanced and multi-faceted view of the payments landscape. From stablecoins to embedded finance, from AI’s promise to regulatory uncertainty, the industry is evolving—but not without friction. For payments professionals, the message was clear: embrace innovation, remain compliant, and build resilience into every layer of the business. As Dimitrova aptly put it, “Prudence, in times like these, is a competitive advantage.”
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