In 2025, payments tech will bring to thee, a wallet and a passkey

‘Tis the season for trend forecasting. As 2024 draws to a close, payments firms are lobbing out predictions for what 2025 has in store for biometric authentication, digital identity, contactless payments, passkeys, wallets and more.
Digital identity, contactless payments, AI top Mastercard’s 2025 trends
A new blog showcasing Mastercard’s ten top payments trends for 2025 and beyond describes a “virtuous circle” of tech innovation and deployment that is ushering more and more people into the digital economy every day, driving demand for trust in online transactions.
“Technologies are coalescing faster than ever, refining capabilities, generating new use cases and even creating new business models,” says the post by Vicki Hyman, director of global communications at Mastercard.
Tokenization, biometric authentication and digital wallets all figure into the larger picture of what the emerging digital economy will look like in the near future.
‘Fight AI with AI’ becomes industry rallying cry
Hogging the spotlight as usual is AI. Specifically, using AI to fight AI – which is fast becoming both a trend and a trope among cybersecurity and fraud protection providers.
Noting how generative AI and deepfakes are enabling fraud and cybercrime to the tune of a projected $10 trillion in 2025, Hyman says “this weapon is also a tool, as companies are training AI models to predict and neutralize threats in real time.”
Coming in at number four on Mastercard’s list is “digital identity on demand.” Hyman nods at biometrics, passkeys and machine learning as key drivers of a still-young global digital identity ecosystem.
“A trusted identity is the foundation of the digital economy, enabling people to interact how, where and when they want with complete confidence. Biometrics, machine learning and identity insights are already supercharging authentication throughout a customer’s journey.” Use cases in government services, healthcare and education show transformative potential.
In noting how passkey adoption will accelerate in 2025, Hyman makes explicit the strong link between passkey technology and biometrics, defining passkeys as “passwordless authentication most often powered by users’ biometrics.”
‘Physical wallets are fast becoming museum pieces’
Passkeys share the encryption stage with tokenization, blockchain and digital identity wallets. “The tokenization of assets through blockchain technology can digitize and optimize any economic activity,” the post notes. Blockchain technology enables this. “In 2025, bet on blockchain technology to enhance speed, security and efficiency,” Mastercard says.
But the product with the most curb appeal is the digital wallet, a key driver of digital inclusion. “In developing and emerging markets, digital wallets are increasingly playing the role of a bank account and capturing the large majority of consumers and businesses.”
“Digital wallets will continue to evolve into comprehensive platforms, integrating payments, identity, loyalty and even healthcare – an essential way for people to navigate their daily lives. The leaders will be those who create intuitive, interoperable ecosystems.”
Other trends cover collaboration and interoperability, contactless and real-time payments, and the increasing accessibility of large tech toolkits for small businesses.
Deloitte presents AI versus AI: the sequel
One notable trend at the end of 2024 is firms predicting that AI will be a trend for 2025. Deloitte’s forecast on trends shaping the future of payments believes “AI-driven fraud models will expand to better consider consumers’ digital identity and personalized spend insights to combat the growing complexity of fraud.”
The first paragraph gives us the seemingly ubiquitous nugget: “AI has prominent use cases on both sides of the fraud landscape: AI-driven scams by fraudsters and AI-driven defense (detection and prevention) from financial institutions.”
“GenAI advancements enable financial institutions to both improve fraud detection and limit false positives, which allows for a smooth customer experience and minimizes lost payments.” As to digital identity, “the integrity and accuracy of each customer’s digital identity is paramount to fraud detection and prevention improvement.”
Visa turns its attention to passkeys
Not to be left out of the Divine Council of banking trends, Visa says it is “moving towards passkeys” as the landscape of payments – and fraud – has shifted. Reporting from Frontier Enterprise says a massive surge in e-commerce, which Visa predicts will reach “a staggering US$7.3 trillion by 2025,” has opened the door to “more sophisticated cybercriminal activities.”
Thus the need for the improvements in fraud prevention, authentication and security that biometric passkeys offer. Visa says key features of its Visa Payment Passkey include reduced friction in the checkout experience, robust compliance and “a delicate balance between implementing robust fraud prevention measures and delivering an optimal customer experience.”
Big banks should come around to passkeys in 2025, says FIDO’s Shikiar
Undergirding a lot of these seismic shifts is the FIDO Alliance, champions of passwordless authentication. FIDO Executive Director Andrew Shikiar offers his own view on 2025 in a video interview from Finextra Research.
While Shikiar notes that the death of passwords has been dragging out for some fifteen years now, the emergence of passkeys means “we’re making great progress towards eliminating our dependence on passwords.”
Shikiar says that while banks have been slow to adopt passkeys compared to the payments giants, he is “quite confident that in 2025 we’ll start to see some big brand banks across the world start to deploy passkeys to allow their users to sign in and access accounts without having to use a password.”
Article Topics
banks | biometric authentication | biometric payments | biometrics | digital identity | FIDO Alliance | Mastercard | passkeys | passwordless authentication | Visa
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