Published: 30/01/2025

4 payment and banking trends for 2025
Ahead of the new year, Spotlight looks back at the some of the biggest payment trends from the past 12 months that will continue to resonate in 2025.

Trend 1: The phygital future is here
Putting the customer first is a principle that transcends industries. In the payments ecosystem, it means offering customers the freedom to choose how they pay. Despite the shift towards digital-first banking experiences in recent years, the value of physical interactions remains relevant. In other words, banking and payments has become a ‘phygital’ experience.
The blending of physical and digital banking creates a ‘best of both worlds’ scenario for consumers who demand flexibility and convenience. This shift doesn’t mark the end of physical branches but rather redefines their role in serving modern customers. It’s about meeting the needs of those who prefer digital-first services as much as those who value the security and tangible experience of in-branch interactions.
The US market best illustrates phygital principles in action. On one end of the spectrum, 9 out of 10 Americans are now using digital payment options1 like QR codes, digital wallets, and instant peer-to-peer (P2P) payments, while card payments remain ubiquitous. At the other end, traditional payment methods such as cash and checks – long since abandoned in other markets – remain common due to their implied trust and security. India offers another example: a nation traditionally dominated by cash is now gradually shifting towards digital alternatives like the Unified Payments Interface (UPI).
It isn’t about one or the other; rather, it is about offering the luxury of choice to meet every consumer’s needs. Likewise, the path to phygital is not a battle of old vs new. Traditional banks face the challenge of adapting legacy systems to a digital world to keep pace with agile neobanks, while digital-first banks are also recognising the importance of physical interactions – whether through physical cards or brick-and-mortar branches – to build consumer trust. If the goal is to merge as many physical and digital touchpoints as possible to create a seamless banking experience and meet evolving customer expectations, then embracing an abundance mindset is the way forward.

Trend 2: Sustainability drives innovation in payments
“Environmental sustainability is non-negotiable,” said Thomas Tarantino, Technology Director, R&D Card Products, at G+D, in a Spotlight interview last year.
Payment-sector stakeholders have addressed this obligation by re-evaluating every stage of the payment journey to reduce the industry’s environmental impact.
A prime example is replacing plastic payment cards with alternatives made from recycled materials. This shift not only meets compliance and social obligations, but also aligns with modern consumer expectations for eco-friendly choices, strengthening brand loyalty by empowering customers to make a positive impact. To support this, G+D has also pledged to eliminate the use of all virgin plastics by 2030.
“Environmental sustainability is non-negotiable.“
Technology Director, R&D Card Products, G+D
While this solution addresses the start of the payment card life cycle, emerging solutions are also addressing the end-of-life processes for expired payment cards, which typically expire every three to four years and contribute significantly to plastic waste. In the first half of 2023 alone, 630 million cards circulated in the Eurozone,2 highlighting the need for viable recycling programs.
Santander Bank’s recycling program, supported by G+D, is a leading example of this in action. Customers of any bank can return expired cards via Santander ATMs, which are then recycled into community furniture like benches and planters. To date, Santander has repurposed 3,700 kg of plastic into 239 benches.
Despite this success, many banks face challenges, such as limited expertise, budget constraints, and a lack of third-party support, that prevent them from implementing similar end-of-life recycling initiatives. In the future, cross-industry collaboration will be essential to overcome this challenge and create impactful solutions. Meanwhile, initiatives like G+D’s Convego® Beyond Ecosystem provide proven pathways for banks to make their processes more sustainable and contribute to wider environmental efforts.
Trend 3: Accessibility is no longer optional – it’s an obligation
Last year, Spotlight sat down with Microsoft’s Lead Accessibility Evangelist, Hector Minto, and G+D’s Director of Managed Card Issuance, Thomas Götz, for a fascinating discussion on the importance of accessibility in payments and how the industry can address this fundamental obligation – not just for its customers, but also for employees working in the industry.
“The more organisations talk about disability in the workplace, the more it will drive engagement around the accessibility issue.“
Lead Accessibility Evangelist, Microsoft
Until now, the accessibility agenda has the domain of big tech. However, for a truly inclusive future, banks, fintechs, and payment providers must take responsibility for creating accessible systems and products. As always, it starts with understanding and addressing the diverse needs of the user and those within. “The more organisations talk about disability in the workplace, the more it will drive engagement around the accessibility issue,” Hector Minto emphasised.
Cross-industry collaboration is also an essential driver that fosters innovation by combining shared expertise of tech experts and payment providers, with the experiences of those who will benefit from more accessible solutions. At G+D, we supported these efforts by hosting the “More Accessible Payments” workshop to bring stakeholders together to help build partnerships, drive progress, and build a more inclusive payment ecosystem.
Beyond a moral obligation, the business case for providing more accessible payments is also compelling: with an ageing population and one in six people living with a disability, not addressing this growing segment is no longer viable. “It’s quite simple: if banks want to maintain their current market position in the payments market, not acting is not an option,” said Thomas Götz.
For businesses getting started on their accessibility in the year ahead, the most valuable advice is to simply get started, take small steps, and involve those with first-hand experience from the beginning. Taking a holistic approach and embracing the concept of ‘inclusivity by design’ will ensure that payment solutions not only meet the needs of impaired people, but also create a more seamless and convenient payment journey for all users.

Trend 4: Goodbye passwords, hello passkeys
The days of remembering complex passwords will soon be over. The next year promises to be another pivotal one for passkey adoption as more organisations “transition away from traditional passwords”.
Passkeys are a secure, device-bound form of authentication developed by the FIDO Alliance – a consortium dedicated to creating open and interoperable security standards. Unlike passwords, which rely on knowledge-based credentials, passkeys use biometrics or unique device identifiers, making them inherently resistant to phishing and fraud. With passwords responsible for 86% of web application breaches – and traditional multi-factor authentication (MFA) methods like one-time passwords (OTPs) vulnerable to phishing and SIM swapping – the incentives for passkey adoption are clear. This shift is especially urgent in the banking and payments industry, where compromised customer credentials can lead to significant reputational damage and a loss of consumer trust.
Device-bound passkeys are considered the gold standard in banking due to their compliance with Strong Customer Authentication (SCA) under the EU’s PSD2 regulation. Unlike synced passkeys, which can be shared or exported, device-bound passkeys provide an additional layer of security by ensuring that transactions originate from a trusted device. This method integrates two-factor authentication in a single step, seamlessly merging ‘something you have’ (the device) with ‘something you are’ (biometrics). For users, this means enhanced security without the burden of completing multiple authentication steps.
The opportunity for banks to reduce fraud risk while offering customers a smoother experience free from the hassles of complex passwords or OTPs is an attractive proposition. Merchants also stand to benefit from fewer abandoned checkouts as a result of a more seamless log-in procedure.
Adoption will take time, however. While 2024 saw rapid passkey adoption in high-growth, digitally advanced markets and among younger, tech-savvy consumers, passwords have been the default authentication method for decades, and changing user behaviour is a gradual process. To drive widespread adoption, banks must prioritise user education and a seamless onboarding experience to make the transition to passkeys as intuitive as possible.
It is also important to strike the right balance between convenience and security. Maintaining some friction for high-value transactions, for example by adding visible, hardware-based step-up authentication using your existing bank card, will reassure customers and help build the trust needed to move toward a completely passwordless future.
Key takeaways
- Phygital payments blend physical and digital experiences to give consumers the best of both.
- Eco-conscious innovations like recycled payment cards and life-cycle solutions are driving a greener payment ecosystem.
- Inclusive payment solutions are breaking barriers, ensuring seamless access for all users.
- Passkey adoption is rising, providing a frictionless, password-free experience, without compromising on security.
-
United States (US) cards and payments – opportunities and risks to 2028, Global Data, October 2023
-
Payment statistics: first half of 2023, European Central Bank, January 2024
Share this article
Don’t miss out on the latest articles in G+D SPOTLIGHT: by subscribing to our newsletter, you’ll be kept up to date on latest trends, ideas, and technical innovations – straight to your inbox every month.