Top 5 Payment Trends for 2025 :In the last few years, digital payments have changed the way Indians conduct financial transactions, in which the rapidly growing Unified Payments Interface (UPI) has played a major role. Indian policy makers have made the payment ecosystem in the country easier than ever, due to which consumers have started adopting easy methods of transactions, which has also given rise to many challenges.
2024: Important changes in payment system
The year 2024 saw important changes in the payment system, in which a framework was prepared for facilities like voice payment, credit line, UPI voucher and UPI circle along with communication. These reforms are aimed at improving user convenience and making the adoption of digital payments more widespread. UPI has now become a global role model in the world of payments. Several countries in Asia, Africa and South America have engaged the National Payments Corporation of India to develop digital payment systems based on UPI, which is expected to be launched in early 2027.
5 major payment trends emerging in 2025
A digital currency pilot will also be organized by the Reserve Bank of India in the year 2024, in which major payment companies like Google Pay, PhonePe and Amazon Pay would like to participate. This is a step towards adding central bank digital currency to the payment ecosystem. Digital payment providers like UPI Rajesh Londhe, Co-Founder and Head of Payments, Fay Commerce Has given detailed information about 5 major payment trends emerging in 2025. These include the growth of AI-enabled fraud prevention tools, popularity of cross border payments, unified lending interface, interoperable mobile wallets and biometric payments.
1. Detecting digital fraud through AI
According to the Reserve Bank of India (RBI), the cases of payment fraud at the domestic level increased by 70.64 percent in 6 months to Rs 2604 crore by March 2024, which was Rs 1526 crore during the same period last year. There has also been a jump in the number of fraud cases, which have increased from 11.5 lakh to 15.51 lakh in the last 6 months. Due to the dynamic nature of threats as technology advances in payments, traditional fraud detection systems that use rule-based frameworks to identify suspicious transactions are no longer effective. In the current environment, prevention should be prioritized over detection and Artificial Intelligence (AI) can help address these issues more effectively.
The AI-enabled tools aim to provide proactive and predictive fraud detection tools against incidents like deepfake videos and phishing scams. Financial institutions are turning to AI-powered fraud detection systems to analyze large datasets in real-time, identify threats, and neutralize them effectively. Security has become the biggest challenge for the payments industry as fintech innovations are on the rise, increasing the number of transactions.
2. Real Time Cross Border Payments
The domestic payments ecosystem is currently witnessing a global transformation, driven by UPI’s ability to exchange and use information across computer systems or software internationally. According to NPCI data, cross border UPI transactions grew by 150 percent in fiscal year 2024, reflecting its strong adoption and growing user confidence. Looking to the future, the integration of Central Bank Digital Currencies (CBDCs) and stablecoins into a framework for real-time cross border payments is set to revolutionize financial transactions globally. These advances significantly reduce transaction costs, increase processing speeds and provide seamless payment experiences, which will accelerate international trade and economic growth.
3. Unified Lending Interface
The Unified Lending Interface (ULI) framework launched by the Reserve Bank of India will emerge as a transformational tool in India’s lending space, making it accessible to all. Just like UPI changed the retail payment system. ULI will facilitate access to loans by connecting different stakeholders in the lending ecosystem, such as banks, NBFCs, digital lending platforms and regulators, through a common platform using a plug-and-play model.
This will essentially help the underbanked communities (e.g. farmers, MSMEs etc.) more as the lending institutions will now have access to information about lenders available with state or central databases, account aggregators, credit bureaus, financial institutions etc. There will be access to digital records.
4. Digital Wallets and Inter-Operability
The widespread adoption of digital wallets in India is opening the way for their easy integration with card-based payment systems, eliminating silos and providing enhanced convenience to consumers. According to GlobalData report, the value of mobile wallet transactions in India is expected to reach US$2.5 trillion at a compound growth rate of 72.1% from 2019 to 2023.
Digital wallets now contribute 25 percent to total payments in India, while UPI dominates 80 percent of retail transactions (RBI Payments Data 2024). Interoperable digital wallets that support multiple payment networks and protocols enable users to transact with different merchants and service providers. This is the way forward and 2025 will see more action on this front.
5. Face-based payment
The move by the Reserve Bank of India (RBI) to allow non-OTP methods like biometric authentication for the second payment factor has opened the way for face-based payment systems. Facial recognition can provide an easier and secure alternative to traditional OTP-based methods, eliminating reliance on mobile networks or SMS delivery.
In the Indian context, this innovation can significantly improve the payment experience of users, especially in areas with poor mobile connectivity. It also addresses challenges like SIM-swapping fraud or delay in receiving OTP. Facial recognition leverages advanced AI and biometric data, ensuring both convenience and security. This is important in high-volume and low-value transactions such as retail or transit systems.
This change coincides with India’s growing digital payments ecosystem, where Aadhaar-enabled authentication has already laid a strong base for biometric verification. For merchants, it reduces friction at the checkout point, and for consumers it means faster transactions without additional devices.
