Payments Conference 2025 – Key Takeaways

Panel 1: AI-Powered Payments

1. AI in payments is not new, but is evolving as generative AI and “agentic commerce” represent the next frontier.
2. Agentic commerce is reshaping fraud prevention and sales, requiring systems to distinguish trusted consumer agents from malicious bots.
3. AI applications span the entire payments value chain as fraud prevention, transaction routing optimization, onboarding (KYC/KYB), customer service, and product development are all being enhanced by AI.
4. Regulatory & governance frameworks are principles based. The UK FCA adopts an outcomes based approach, rather than prescriptive rules like the EU AI Act, and governance requires board level buy in, organizational adoption, and strong data quality controls.
5. Collaboration and synthetic data are driving innovation in payments, with the FCA’s AI live testing initiative supporting firms to develop safe and responsible use cases, synthetic datasets enabling realistic AML and fraud scenario testing, and industry partnerships ensuring innovation is balanced with consumer protection.

Panel 2: The Rise of Digital Currencies

1. Stablecoins can deliver increased speed, security and efficiency for users, enabling faster and cheaper, programmable payments. This is particularly true in relation to cross-border payments where timeframes can be longer.
2. CBDCs require clear use cases, as developing a central bank digital currency is costly and complex and must solve real problems to justify adoption.
3. CBDCs challenge the original Bitcoin ethos of decentralization and cutting out central banks, as they seek to keep central bank money at the heart of the system.
4. Coexistence, not replacement. Digital assets will coexist with traditional payment rails. For example, stablecoins often operate in a “fiat–stablecoin–fiat sandwich” model for settlement requiring both traditional and new rails.
5. Regulation and trust are critical. Consumer trust hinges on stability, safeguarding, and clear liability frameworks, while global regulatory fragmentation complicates adoption.

Keynote: Future Payments Strategy

1. The future of payments and money has become an increasingly important strategic priority for the Bank of England in recent years.
2. Money can be seen as the “train” on the “rails”, the rails being the payment system. With innovations in payments, it is now recognised that the “rails” are equally important. The Bank itself is investing in the rails to ensure wider, quicker and more secure access to central bank money.
3. Central bank money should remain the “anchor”, serving to provide trust in money and the financial system generally. The ability to convert private money (such as bank deposits) to financially risk free public money ensures the viability of private forms of money.
4. The Bank of England has listened to stakeholder feedback and changed its stance in its recent Consultation Paper. It proposes that systemic stablecoin issuers will be permitted to hold up to 60% of backing assets in sterling denominated short-term UK government debt. The Bank will still provide unremunerated deposit accounts at the Bank of England for the remaining backing assets (at least 40%). The 60/40 split is intended to provide appropriate balance between business model viability and mitigation of financial stability risks.
5. The international monetary system is evolving to enable innovation and multiple different forms of money in the financial ecosystem – but from the Bank of England’s perspective, the role of central bank money should remain at the heart of that system in the interests of monetary and financial stability.

Panel 3: The Future of Payments Regulation

1. Regulators’ roles are evolving as they aim to balance consumer protection with enabling new technologies.
2. Fragmentation and passporting challenges: MiCA has raised concerns about inconsistent supervision across EU member states, and there is debate over whether ESMA should oversee systemic crypto firms to ensure harmonization.
3. The UK regulatory framework will be streamlined to avoid too many overlapping regulators.
4. Law firms have become translators, positioned between regulators and industry to help interpret rules, feedback practical challenges and provide regulators with insights into real-world challenges.
5. Cybersecurity risks are seen as existential for payments infrastructure, and a lack of interoperability between stablecoins, DLTs, and payment rails could undermine money’s core function.

Breakout session: Alternative Payment Methods

1. Cards are well embedded in the UK market and persuading consumers to use other forms of payment can be difficult, even where those alternative methods offer speed or cost benefits. For consumers, card payments are easy, quick and safe and there is a lack of understanding of the potential benefits of other methods.
2. Wider adoption of APMs can be seen in jurisdictions where cards are less embedded and other methods of payment are less available. In Asia, QR code payments and payments through super-apps have seen wider adoption. In jurisdictions like the UK a real use case is less obvious, and consumers see less incentive to use a method of payment they understand less and may think is less safe. However, areas like FX, cross border payments, and receivables remain pain points where alternatives could add value.
3. Explaining complex products like digital assets or Agentic AI to consumers may be difficult and providers will likely bear the burden of educating customers on the benefits of APMs. However, if certain APMs grow sufficiently and offer significant benefits to consumers regulators may need to take on some of this educational role, to ensure consumers are not losing out.
4. The “ideal” payment method should combine accessibility, security, global reach, and merchant value, as well as being simple for users, resilient against fraud, and commercially viable for providers.
5. Agentic AI has potential to grow as an APM in its own right but its increased use may also foster the use of other APMs. In the future Agentic AI journeys may include agents selecting the payment method to be used to make the purchase. These agents may be more likely to select APMs where they are cheaper or faster, to maximise benefit for the consumers as they will not have the same loyalty to other forms of payment.

Breakout session: Buy Now, Pay Later

1. BNPL began under exemptions for short term, interest free credit and was seen as low risk. It is now mainstream, with models resembling revolving credit and attracting younger users who value frictionless experiences.
2. Concerns include over-indebtedness, weak affordability checks, opaque disclosures, late fees, and design that encourages overspending. Regulators want BNPL held to the same standards as other credit products to ensure transparency and protection.
3. From 15 July 2026 BNPL will be regulated in the UK, including under the Consumer Duty, with proportionate rules requiring clear disclosures, creditworthiness checks, and arrears/forbearance measures.
4. The EU’s CCD2 (end 2026) will fully integrate BNPL into consumer credit, adding affordability checks, fee caps, and stricter transparency. Other markets, such as Australia, US states, APAC, and the Middle East, are moving in the same direction.
5. The Future of BNPL. BNPL is becoming a mainstream alternative to credit cards, offering smoother, lower cost journeys that appeal to younger consumers. Regulators are focusing on affordability, licensing, and protection, meaning future success will depend on balancing innovation with compliance and proving value to merchants and users amid growing competition.

Breakout session: Fighting Financial Crime

1. Money mules remain an attractive means of money laundering as criminal gangs exploit mules for anonymity, accessibility, and ease of disguising transactions, making detection challenging.
2. Fraud types are diversifying, with clients facing a wide range of fraud, including identity theft, crypto fraud, and romance, investment, purchase and app scams.
3. Firms are grappling with the complexities of identifying vulnerable customers who are scammed or coerced into acting as a money mule and delivering the best outcomes for these customers.
4. Rapid tech evolution (AI-driven fraud, crypto) is outpacing regulatory frameworks, leaving firms uncertain about adaptability and pre-transaction screening feasibility.
5. Firms rated investment in the level of controls they perceived as expected by regulators as only ‘moderately realistic’ in the context of the nature, scale and complexity of their businesses.

Authored by Roger Tym, Jon Chertkow, James Black, Jeffrey Greenbaum, Richard Reimer, Franck Dupret, Elizabeth Greaves, Charlie Middleton, Nikki Ogun, Sinead Meany, Ann Ðoàn, and Diana Suciu.