As we wrap up 2024, I thought I’d outline a few key areas I’m tracking and things to look for in 2025.

1. eCommerce payments. We are in the midst of a generational change in ecom payments as I outlined in eCom 2025.
   1. ApplePay crosses the chasm to desktop (and Windows) and non Safari browsers. The late Sept rollout didn’t allow merchants time to get it into Holiday, but expect over 100 retailers (and MSPs) to release in 1Q.  Wallet based payments just took the lead over paypal this quarter (4Q24) 13% to 11%. Expect Applepay eCom to move from 2-3% of eCom GMV to over 20% next year. 
   2. SRC/PAZE and significant updates to network rule sets. SRC is set to have the largest impact in Europe. While over 50% of EU merchants opt out of liability shift and take on risk for purchases, that number will move to 20% by end of year as network authentication VAS is added to 3DS. US will be much more of an unknown as PAZE will likely seek to create their own authentication approach, and struggle to get merchants or 3rd parties involved.
   3. Apple and Google will expand their role in authentication, as Google did in SPA. Setting up a new revenue stream to authenticate all payments (beyond cards). 
   4. Guest checkout. While PAZE/SRC, Fastlane and others focus here, Google will not give away the market they own (in Chrome autofill). My merchant survey shows deep interest for Google expanding their CAF services, leveraging existing consumer behavior and trust. 
   5. PayPal.. They are the net losers here. Fastlane will compete against network FIDO. When networks asked PayPal to support network authentication, They told them they were going their own way. Passkeys are a great tool, but consumers don’t want to create a thousand passkeys, one for each payment type AND merchant AND browser/device they use. Its just silly. One merchant quipped “PayPal is the most expensive payment option I provide, we don’t have growth their in PP. ApplePay has now surpassed PP in fraud and conversions and I don’t pay anything for their service. There is no way I’m jumping into Fastlane, until they discount below card. I won’t help them build a new brand for free”.
   6. ShopPay and Link are also set to expand for different reasons. Merchant emphasize that payments are NOT a ONE AND DONE effort. They require constant tuning and evolution. For example how BNPL plays in a specific campaign. ShopPay and Link provide conversions at parity to ApplePay.    
2. Identity and Authentication. I’m most active here. 
   1. Perfect authentication will destroy hundreds of billions in fraud/risk investment and allow both smaller merchant and smaller issuers to compete (see Perfect Auth).   
   2. Great new customer experiences are possible, but who will lead? Banks? Networks? Wallets? MSPs?
   3. The role of the wallet in identity will expand dramatically, making bank efforts to create a “mobile wallet” laughable. The challenge for Apple and Google is to create authentication services outside of the domains they control. See blog. 
   4. Network Authentication VAS may be the biggest new opportunity for network revenue growth. Near term it is transaction authorization, the next phase is for non-card payment, then authentication beyond financial services (think document signing and insurance). 
3. Asia and QR Schemes.  Another area of focus for me. Payments in asia is developing much differently than ROW. Expect to see a significant move away from AliPay outside of China and a push toward interoperability between schemes. With interoperability, regional banks will begin to take a new role and existing QR schemes will evolve toward an MSP role like Block/Shopify. I can’t comment more here. 
4. Opening of the Secure Element (See blog). Banks are hoping for great things here. My view is that Apple is so far ahead in wallet that an API to enable Amex’s app to do an NFC payment is a waste of time. Yes it will be possible. But consumers won’t give up their apple wallet it holds “everything” from boarding passes, tickets, identities, door keys, … etc. I see minimal impact to Apple. 
5. RTP/FedNow. 2025 will keep them focused on disbursement and bill pay. With TCH’s RTP 5 yrs ahead. Expect to see TCH increase RfP rollout in A2A transfers (see blog).. There will be NO IMPACT in eCom or at POS.
6. Europe’s eID wallet continues to find success in eGovernment and related services, but will still have a muted impact in banking and payments until there is harmonization of banking regulations. There will be a “chain of trust” in credentials between those managed by banks (in V/MA), platforms (Apple/Google) and Government. But this will take time. Customers don’t want “step up”  and merchants don’t want declines, thus the best consumer experiences will reinforce the “best” players that can deliver across this complex landscape. My bet is on Apple and Google. 
7. Stablecoins. Love them is an understatement. They are very disruptive, but switching costs are significant (ie consumer card rewards). Thus expect them to have the most traction in non-card areas like remittances.  Expect remittance margin to move toward 0. 
8. Lastly.. The CFPB and 1033 are set to be neutered. Good bye open banking quasi mandate in the US (and pay by bank). This will not happen 95% confidence. Part is political as the new administration has no love for the Elizabeth Warren construct. In addition to the department of education, the CPFB itself is on the chopping block.
9. FinTechs I’m in love with: anything that improves the operational efficiency of existing participants and existing flows (ex Chase Onyx) or helps banks connect to their customers better (FISPAN).  
10. FinTechs with success in building a two sided network (ie Affirm, Block, Stripe, …etc). Per last week’s blog this is the only model with control over margin. Look for network growth.
11. Banking data services (round 3). Chase Media Network? No chance .. its like JPM entire team forgot their lessons in Bloomspot (see blog). I see MSPs with an amazing opportunity to build AI based services to help merchants help themselves. These should be modelled on what MA’s APT does. Mastercard’s services are people intensive but merchants voluntarily give MA data to improve operational efficiency, determine new store locations, set menu prices.. Its amazing. Banks need to forget about a role in advertising. They don’t have any unique data (I know I’ve measured it).