Payments in 2025? Real-time and Deferred, According to OCS

The world of payments has changed radically in recent years. In 2023, the market was tasked with evaluating the innovations and disruptions of the post-pandemic world. This year, the primary challenge for industry operators has been leveraging technology to create value through the payment experience, thereby distinguishing their offerings from those of competitors.

What’s in store for 2025?

According to Forrester Research, cash usage globally will decrease by 40%. In Europe, Finland, Norway, and Sweden have already almost entirely abandoned cash due to a high percentage of banked populations and policies encouraging this shift. Italy, while improving, still remains among the top 30 economies with the highest reliance on cash, as confirmed by the 2024 Cash Intensity Index by Ambrosetti. Globally, countries like Brazil, China, and India are rapidly adopting mobile and account-based payment solutions. Analysts predict a further global push toward Account-to-Account (A2A) and real-time payments (RTP) over the next year.

“2024 has paved the way for a banking market that is exploring and investing in real-time payment solutions to streamline and digitize processes while making them as instantaneous as possible. After fund transfers via wire transfers, the focus has now shifted to payments to/from customers. We are moving toward solutions where a customer can receive funds into their bank account, pay installments, validate their IBAN, or pay loan installments at a payment center using a QR code, all through a simple SMS click. The goal is to provide users with an advanced, intuitive, fully digital experience” comments Francesca Palomba, Senior Manager of Onboarding Processes & Loans Management.

The Key Word: Real-Time

Consumers worldwide now expect seamless and immediate access to financial services. Consequently, industry operators are increasingly investing to adapt and deliver real-time transaction processing and settlement processes. By 2025, real-time is likely to become the default for most financial operations globally, including payments, loan applications, open banking transactions, embedded finance, fraud evaluation, and cross-border money transfers. Despite challenges such as infrastructure upgrades, regulatory compliance, fraud prevention, and achieving interoperability, financial institutions must also focus on developing new value-added products and services to meet customer expectations for immediacy, gain a competitive edge, and shape the real-time future.

From Buy Now, Pay Later to Emerging Trends

The "Buy Now, Pay Later" model has seen exponential growth in Italy, although lagging behind other markets traditionally less reliant on cash. According to data from the Politecnico di Milano’s Innovative Payments Observatory, in 2023, the volume in Italy reached €4.6 billion, accounting for 6.5% of the total national eCommerce market. Additionally, 14% of Italians have reported using this payment method, primarily for online purchases, with only 2% of users indicating they would not use it again.

Meanwhile, a new trend is gradually emerging in the West from Asian markets, with India leading the way: "Save Now, Pay Later." Fintech companies are beginning to introduce this model in the U.S. and Europe. Unlike its counterpart, the SNPL model focuses on saving in installments for future purchases.