The payments industry is beginning to enter another transformative era. With emerging technologies and evolving consumer demands, new ways to conduct transactions are constantly being created and integrated into today’s systems. In 2025, trends like increased Marketplace Functionality, Evolving Card Tokenization, and AI in payments will drastically redefine this landscape, pushing the boundaries of convenience and security. At Payarc, we are constantly adapting and implementing to help stay ahead of the curve.
Here are just a few of the trends we expect to be prevalent in 2025:
1. Marketplace Functionality with Split Payments
Split Payments are becoming a powerful tool for businesses looking for greater flexibility. It allows payments to be converted into multiple parts and can be routed to different recipients or accounts. Commonly found in marketplaces or subscription services, the funds can then be allocated to the seller, platform fees, and other stakeholders. This is especially important in today’s competitive landscape, where convenience often drives key decisions. In a 2022 survey, approximately 30-40% of businesses identified split payments as a top priority for their infrastructure. Payarc stands out by providing businesses with the tools to seamlessly implement split payment functionalities through our Payment Facilitator program. With our solutions, businesses can increase efficiency by automating revenue sharing and payouts, providing more clarity on payment allocation, as well as utilizing a program that scales alongside their growing business.
2. Tokenization Strategy is Evolving
Rapidly becoming a popular trend in payment security, Tokenization offers businesses robust solutions to protect sensitive customer data and is expected to evolve further in 2025. By replacing card details with a secure, unique token that has no exploitable value, it minimizes the potential for data breaches and creates customer trust. This approach can be vital as stricter compliance requirements have been created due to the increasing amount of cybersecurity threats. Today, major card networks and payment processors are starting to produce their own form of tokens for customers. The difference between the two is that network tokens are issued by the card distributors and can be universal across merchants and apps, providing lifecycle management and fraud prevention. Meanwhile, processor tokens are designed for security within specific platforms.
According to Visa, in 2022 they had issued 4 billion network tokens and noticed a 30% reduction in online fraud. Additionally, Mastercard is aiming to have 100% of e-commerce transactions tokenized by 2030, meaning this form of security will become the norm sooner rather than later. With Payarc, we can enable businesses to stay ahead of potential threats with our advanced tokenization solutions already integrated within our platforms. These tools can not only enhance security but streamline checkout processes as well thanks to the stored tokenized customer data. With our commitment to innovating payment processes and security, businesses can confidently evolve alongside the digital landscape knowing that their data will always be safe with Payarc.
3. AI is No Longer A Buzzword
Everyone today is talking about AI and how it can impact their business. Startups have been the biggest example of this phenomenon by claiming they utilize AI-powered solutions for their business. However, it's mostly been a buzzword used to generate excitement and acquire additional funding where there are minimal results to show for it. That will likely change within the next few years as almost 80% of corporations have started to integrate artificial intelligence across many different departments. Whether it be automating customer service with chatbots, streamlining logistics with predictive analysis, or personalizing e-commerce recommendations, AI is starting to be at the forefront of day-to-day business operations.
Even at Payarc, we have been developing our AI called PIE to help empower our staff. With PIE, our team can respond to support queries faster and uphold the white glove support experience our partners and merchants have come to know and love. We have even created prediction engines to recognize potential merchant loss and the corresponding solutions to solve their current issues. Our goal at Payarc is to utilize the best of artificial intelligence tools to improve our already great products and services without removing the humane aspect our partners appreciate. AI integration has suddenly become a matter of “when”, and not “if”. Tangible artificial intelligence is coming quickly, and 74% of executives believe it will significantly impact their industries within the next five years.
4. POS Takes a New Meaning
Since its inception, POS terminals have always stood for point-of-sale. However, those throughout various industries believe it could become a “place of service” due to these systems slowly evolving into all-in-one hubs for business operations and needs. With our Curv system, we aim to give business owners a full sense of scale within their business, allowing them to manage everything all from one place. Here they can streamline operations and analyze sales data more efficiently to provide a better customer experience. Thanks to newer technology, POS devices have started to progress from purely transaction management to overall business management, and we predict owners will start taking advantage of these features sooner rather than later.
5. The Rise in PayFac
Payment Facilitation has grown rapidly over the last few years. Typically offered to small or medium-sized businesses, PayFac allows them to accept payments without the hassle of obtaining their own merchant account. With only 1,200 PayFac providers in 2020, it is projected to reach 4,200 in 2025 along with $15 billion in transactional revenue. This is quite notable due to the many perks a payment facilitator can provide. There is a simplified onboarding process that can reduce the setup time from weeks to days. Additionally, there are immense revenue opportunities from the transaction fees and can create a lucrative revenue stream.
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This has already driven many platforms and other SaaS companies to the PayFac model, and it doesn’t seem to be slowing down any time soon. Due to the growing market, PayFac’s are looking for ways to stand out whether that includes AI-assisted functions or enhanced risk management capabilities. With Payarc’s platform, businesses can split payments, use advanced automation software, and accept diverse payment methods all within a user-centric dashboard. We pride ourselves on mastering flexible, and easily scalable solutions for businesses so they can be successful today.
Conclusion
Here at Payarc, with our innovative PIE artificial intelligence, Payment Facilitator Platform, and Card Tokenization ability, we are already leveraging these trends into cutting-edge solutions. These few examples of what we are currently working on exemplify our commitment to delivering seamless, and innovative payment experiences. Staying one step ahead of the competition isn't just a goal, it’s a promise. By already anticipating market shifts and adopting new technologies, we can ensure our clients will thrive in this ever-changing industry.