Digital wallets proliferate as features advance

Dive Brief:

• Only 8% of U.S. consumers engage in online transactions every day, versus 35% in Brazil and more than 20% in several countries, including Saudi Arabia, Japan and United Arab Emirates, according to the results of a study by the survey firm YouGov and the London-based fintech Checkout.com.
• While nearly all of China’s consumers (93%) have adopted a digital wallet for making payments, and 80%, or more, of the populations in Saudi Arabia, Brazil, Egypt and the United Arab Emirates have, only about two-thirds (65%) of U.S. consumers have downloaded such apps, according to results of a survey for the study by YouGov.
• Meanwhile, a quarter of China’s population uses digital wallets to make peer-to-peer payments every day, and a fifth of consumers in Brazil do the same, but only 9% of Americans use the tool daily, according to a survey of 18,000 adults across 16 countries. The study didn’t provide information on how or when the survey was conducted.

Dive Insight:

The report from Checkout.com and YouGov sketches out the global differences in trust levels for using digital payment tools and engaging in online checkouts. Compared to other regions, European and North American consumers tend to exhibit more skepticism when it comes to e-commerce transactions than consumers in other parts of the world, the study suggested.

While the study was initially issued in May, Checkout.com highlighted the global disparities in an Aug. 13 press release. Major providers of digital wallets in the U.S. include Apple and Google, though they are typically linked to consumers’ credit cards, debit cards or bank accounts.

The top reason that U.S. consumers said they were short on trust in using digital payments for commerce was that they are uncertain about the safety of the checkout. Nearly half (46%) of U.S. consumers expressed that uncertainty. That was the same reason for concern with consumers in 11 of the 16 countries, with the percentage being about the same in most of them.

The top reasons for concern in the other five countries related to the ease of use and the lack of a preferred payment method offered. 

Part of the mistrust for U.S. consumers may be related to half of them reporting they have been a victim of fraud when using their cards for payments (the study wasn’t clear about whether it was credit or debit cards). Still, consumers in Brazil reported even higher levels of card victimization (53%) and the percentage in the United Arab Emirates was the same as in the U.S.

And even though they have very different digital payment use rates, consumers in the U.S. and China were nearly equally nervous about storing their card data on an e-commerce site, with that being the case for 43% in China and 42% in the U.S.

Checkout.com’s report echoes other research suggesting that card fraud remains a problem for consumers and payment providers alike.

A Nilson report released earlier this year projects that fraud losses in card payments will reach $403.88 billion over the next decade. Meanwhile, 73% of financial institutions surveyed by the Federal Reserve Financial Services said debit cards were the top payment method for fraud attempts in 2024. 

Peer-to-peer payments are also a hotspot for fraudsters. An AARP survey released last year found that about a fifth of adult peer-to-peer payment users have been an “intended victim” or a victim of “financial exploitation.” Of those targeted for scams, four in ten lost between $101 and $1,000, the survey of 2,014 adults found. 

Dive Brief:

• Paze, the digital wallet launched last year by Early Warning Services, has loaded 150 million debit and credit card accounts onto its nascent system, according to an EWS presentation at Nacha’s Smarter Faster Payments Conference. Now, those bank customer card holders can opt into the wallet if they’re interested in using it.
• More big banks are expected to link to Paze later this year, Early Warning’s Chief Partnership Officer Eric Hoffman said Sunday during a panel discussion at the conference. He spoke alongside Deva Annamalai, Fiserv’s head of client strategy and solutions for digital payments. The processor is partnering with EWS to attract more banks to offer the digital wallet to their customers for online purchases.
• With Fiserv, there is “exposure to thousands of banks,” Hoffman said in an interview after the panel discussion, explaining how additional banks will disclose working with Paze as they announce that the service is available to those banks’ customers.

Dive Insight:

The latest card count is up from 125 million cards connected last October. Early Warning Services has been eyeing the 150 million card goal for some time because the accounts belong to customers of EWS’s bank owners, but now it will set its sights higher, to add more card credentials. 

As Fiserv helps bring its bank clients onto the Paze system, it will benefit from the increased transaction volume it processes through the digital wallet.

Scottsdale, Arizona-based Early Warning Services has been building the Paze system since at least 2022, with a slow roll-out to its bank owners since its launch last September. 

The seven major banks that own EWS are Bank of America, Capital One, JPMorgan Chase, PNC Bank, Truist, U.S. Bank and Wells Fargo. Those EWS banks also developed the bank-to-bank payments system Zelle, which sent $1 trillion between users last year.

Paze got a lift last year after the arrival of a new leader, Serge Elkiner, who was tapped to become its general manager. Hoffman is also somewhat new to the project, having arrived just as Paze was launching last year. He’s bringing experience from his work as a business development executive for Apple Pay.

Some 70% of U.S. consumers don’t use a digital wallet so there is a broad opportunity to attract new users without having to do battle with some of the long-time rivals in the field, namely Apple Pay and PayPal, Hoffman said. “They may use their card on file (online), but they're not using digital wallets – this is the consumer that we're going after,” he explained.

Paze will be directed at consumers between 35 and 65 years-old who tend to be wealthy, and have been “protectionist” in their thinking about digital wallets, Hoffman said. This group has generally avoided using digital wallets so far, but they’re likely to sign up for Paze if it’s offered by their banks, just like they did with Zelle, he said. 

“Consumers trust their banks – that’s what we’re hanging our hat on,” he said.

When asked why it’s taken so long to get the system rolled out, Hoffman suggested it was simply time spent developing the Paze technology. He conceded during the discussion that the Paze team is “still closing some technical gaps.”

He also noted that getting bank card issuers up and running with Paze at the same time EWS was trying to add merchants to the system was no easy task.

Merchants offering the Paze payment option to their customers so far include retailers Sephora and Fanatics. Hoffman expects Paze will also add more merchants to the online Paze shopping ecosystem later this year.

Sponsored content

By Paze

For a retail giant like Fanatics, processing more than 40 million e-commerce transactions yearly^₁ isn't just business as usual—it's a high-stakes challenge of scale. To effectively transform that fan passion into profitable purchase, the brand desperately needed a checkout experience defined by speed, security, and efficiency. Enter Paze^SM, the strategic partner now delivering on that commitment, solidifying Fanatics^₁; foundational promise of convenience and trust to its vast customer base.

Supporting the fan journey with the right wallet

Fanatics, the world’s largest licensed sports merch retailer, processes surges in demand during major events—from game days to holidays. Yet even with loyal traffic, they faced persistent challenges: checkout friction, dropped sessions, and fraud exposure.

Doug Raymond, SMD and Head of Payment Strategy at Fanatics, explained in a recent webinar that their primary payments goal was to provide a great customer experience. He emphasized that the team looked beyond just customer conversions and payment volume and was optimizing the purchasing experience for retention and loyalty.

“We want our customer to have a better experience. That’s why we invested in Paze.” – Doug Raymond, SMD, Head of Payment Strategy, Fanatics

Fanatics implemented Paze in December 2024 with a tailored integration to their preferred UX: customers stayed on-site, saw familiar card logos from their bank, and completed purchases with fewer clicks.

Leading national banks are promoting Paze-enabled merchants like Fanatics through their marketing channels, which are uniquely effective due to the high level of engagement and trust consumers place in bank communications.

Bank marketing makes a difference

In March 2025, Paze launched co-branded seasonal incentive campaigns for Fanatics, collaborating with banks like Capital One to amplify the campaign. Paze ran a 30% off promotion for the NCAA college basketball tournament, and saw daily transaction volume improve by over 4x^₈ and conversion rates improve to 69% (+13%)!^₉This may indicate that Paze incentive campaigns are not only driving transactions but also shoppers’ commitment to completing their purchase.

"The win with Paze is its simplicity, speed, and the built-in trust of the customer’s bank," Raymond said. "It gives us the best of both worlds - brand control and better payment performance."

Early success with Paze

Fanatics identified several areas of improvement in their customer journey data.

Results by the numbers:

• Conversion rate: 69% conversion rate with Paze²
• Authorization rate: 98% with Paze, 1% higher than overall average³
• Average order value: 20% higher AOV with Paze³
• Basket size: 7% larger basket size with Paze⁴
• Checkout time: 51 sec checkout time with Paze¹⁰

“It’s been a good start for Paze as a new checkout option. Paze is performing stronger than other payment launches.” - Doug Raymond, SMD, Head of Payment Strategy, Fanatic

Ultimately, the partnership between Fanatics and Paze helps prove that investing in a seamless, more secure checkout isn't merely a technical upgrade; it's a potent business strategy. By providing an upgraded checkout flow to their customers, Fanatics saw a substantial uplift in core metrics—conversion jumped 13 points, average order value surged by 20%, and daily transactions quadrupled. This success underscores a critical insight: converting fan passion into profit requires a seamless customer experience, and Paze is there to help build on Fanatics commitment to provide trust and convenience for their customers when checking out.

Interested in implementing Paze or establishing a partnership? Contact the Paze team.

---

Footnotes

1. _{Sacra Fanatics Profile | 2024.} 
2. _{For returning recognized users who entered the Paze checkout flow per Paze data from 3/18/2025-4/8/2025.}  
3. _{Per Fanatics data from 1/1/2025-4/30/2025.}  
4. _{Average order value with Paze was $109.77 as compared to merchant-reported average of $91.49 from 1/1/2025-2/19/2025.}  
5. _{Paze items/card is 1.88 vs. average 1.76 per Fanatics data from 1/1/2025- 2/19/2025.}  
6. _{Comparing pre-campaign Paze volume from 2/28/2025-3/11/2025 to campaign data from 3/12/2025-4/12/2025.} 
7. _{From 1/1/2025-6/30/2025, Paze wallet transactions at Fanatics had a confirmed fraud rate of just 1.38 bps (or 1.38¢ per $100). A Nilson article from January 2025 reported that worldwide card fraud losses were 6.58 basis points (or 6.58¢ per $100) in 2023.} 
8. _{Comparing pre-campaign Paze volume from 2/28/2025-3/11/2025 to campaign data from 3/12/2025-4/12/2025.}
9. _{3/18/2025-4/8/2025.}
10. _{For returning recognized users who entered the Paze flow per Paze data from 1/1/2025-5/1/2025.}

Dive Brief:

• Digital payments spending online and in-person has surged worldwide from $1.7 trillion in 2014 to $18.7 trillion in 2024, according to Worldpay’s 10th Global Payments Report.
• Spending via digital payment methods, including digital wallets, buy now, pay later services and account-to-account payments, are predicted to surpass $33.5 trillion by 2030, according to the report Tuesday. However, U.S. consumers use mobile wallets for only about four in ten (39%) of their online purchases and 16% of in-person transaction value, a smaller share than the 81% of e-commerce payments and 59% of point-of-sale transaction value in the Asia-Pacific region.
• About two-thirds (67%) of all U.S. consumer purchases online and at points-of-sale were transacted via credit, debit and prepaid cards. Cash use in the U.S. fell from 44% of in-store spending in 2014 to 15% in 2024, the report found.

Dive Insight:

Payment provider Worldpay attributes the growth of digital wallet use in the U.S. to the COVID-19 pandemic. In the near future, digital wallets will play a more significant role in both e-commerce and point-of-sale payments and will be funded primarily by credit and debit cards, the report predicts.

By 2030, digital wallets are expected to comprise more than half (52%) of e-commerce transaction value and 30% of point-of-sale transaction value, according to the report. By contrast, the report predicts that credit cards will comprise only 22% of e-commerce transaction value and 32% of point-of-sale purchases in 2030, down from 40% of online purchases and 48% of point-of-sale purchases in 2014. 

As U.S. consumers increasingly adopt mobile wallets, cards remain a critical part of digital wallet usage in America and abroad. The report from Cincinnati, Ohio-based Worldpay notes that seven in ten digital wallets in the U.S. are funded by cards, tied with Australia (70%) and followed by the U.K. (67%), India (56%), Brazil (53%) and China (46%).

As for America’s attachment to cash, Worldpay’s report indicates that cash usage has been declining in the U.S. and will continue to drop in the coming years.

While a fifth of U.S. transaction value was cash-based in 2014, that share fell to 11% last year, according to Worldpay’s report. By 2030, U.S. consumers are predicted to use cash for only 9% of transaction value, per the report. Though the report categorized the U.S. as a medium-cash use country, other countries, such as Germany, Nigeria and Mexico, were categorized as high-cash use markets or low-cash use markets like South Korea, China, Sweden and Finland. 

“A confluence of factors — advancements in smartphone technology, the exponential growth of fintech, and supportive regulatory frameworks — combined with changing consumer expectations for ease and convenience, have fundamentally transformed the way we make payments,” Adam Coyle, chief strategy officer at Worldpay, said in a statement.

Other reports illustrate Americans’ cash use. Last June, the Federal Reserve’s annual cash use survey found that about a third (32%) of consumers used credit cards for their payments, followed by 30% who used debit cards and 16% who used cash. 

One possible driver of mobile wallet adoption in the U.S. is businesses integrating digital wallet capabilities. Large companies saw digital wallet usage spike from 48% in 2022 to almost two-thirds (64%) in 2023, according to a survey from the Federal Reserve’s financial services unit. Service businesses also saw their digital usage rise from 43% in 2022 to 61% in 2023, the survey found. 

Another factor in the growing adoption of mobile wallets is the perception that they are more secure than other payment methods.

A 2023 J.D. Power survey found that the proportion of consumers who use digital wallets rose from 12% in 2022 to 48% in 2023. While the survey found that consumers under 40 have been using digital wallets due to perceived security, cybersecurity experts say that the payment method still carries vulnerabilities.

Because digital wallets can contain far more personal data than consumers’ card information, they are an even more enticing target for fraudsters, Sunny Thakkar, head of fraud and disputes at Worldpay, told Payments Dive in December. 

Worldpay’s report also offered some insight into the dominant card issuers. Visa captured 63% of the card share in 2023, Mastercard was second at 25%, followed by American Express at 9%. Discover Financial Services— which is seeking to sell itself to Capital One for $35.3 billion — comprised only 1%, per the report. If approved, the larger Capital One could challenge Visa’s dominance.

Clarification: This article has been updated to refer to the transaction value in certain instances.

The payments industry has been on fire with change in recent years, and that’s unlikely to let up this year.

While some of the trends, such as the industry’s move toward instant payments, will remain on a steady trajectory, others are expected to emerge as more important, including the use of artificial intelligence.

Of course, expectations for rolling back regulations are high, given President-elect Donald Trump’s record. That may mean undoing some aggressive moves by federal agencies during the Joe Biden administration.

Aside from government pressures, competition and commercial incentives will keep driving modernization of payments systems, whether in government, corporate or bank operations. That will lay the groundwork for other payments trends to gather momentum. Account-to-account payment use, open banking and acceptance of stablecoins, are all expected to blossom, said industry analysts, consultants and executives. 

Read on to better understand the trends that are anticipated to dominate 2025.

Payments industry participants anticipate deregulation

Trump is expected to have a lighter regulatory touch than his predecessor, which has the payments industry abuzz about what rules governing the industry might be pared back or eliminated altogether in 2025. In fact, analysts and consultants who follow the payments sector anticipate Trump may take an axe to regulations, including potentially some recently introduced.

The outgoing Biden administration, specifically the Consumer Financial Protection Bureau, has been roiling the regulatory environment since Trump was elected, finalizing new rules and filing lawsuits in a seemginly last-ditch effort to curtail certain industry practices before the Jan. 20 inauguration.

Over the past two months, the federal agency instituted a new rule for oversight of digital payments apps offered by big companies; targeted credit card reward programs; and sued Early Warning Services and big banks over the Zelle payments tool.

The agency appears to be trying to finish its Biden agenda, said Tony DeSanctis, a senior director at the consulting firm Cornerstone Advisors who focuses on banking and financial services. Those types of moves were expected, and it remains to be seen which will be reversed as Trump takes office, he said.

The agency is a frequent target for Republican criticism, and the incoming president will almost certainly replace CFPB director Rohit Chopra with someone more business-friendly, the industry observers said.

“The CFPB will probably be made to scale back some of its efforts,” predicted Bill Maurer, the director of the University of California Irvine’s Institute for Money, Technology and Financial Inclusion. The professor expects to see some aspects of the payments industry change as new Trump regulators segue to more lenient measures. “[Buy now, pay later] will be unleashed, and probably move to other sectors besides retail,” he said.

Plus, the agency’s efforts to treat BNPL more like credit cards may evaporate, Maurer said.

The new administration could also clarify some rules, like the CFPB’s regulations on open banking, which were issued in October, said Jeremy R. Mandell, co-chair of the financial services group at the law firm Morrison Foerster.

“There remain a number of open questions about the rule that the bureau finalized,” Mandell said. “I think it would benefit the industry generally — and consumers specifically — to have that clarity.”

Aside from moves at the CFPB, many in the industry wonder whether the Department of Justice will continue its lawsuit against card giant Visa over alleged monopolistic practices in the debit card network. Federal prosecutors sued Visa last year, arguing it had essentially co-opted some big tech competitors and shut out fledgling fintechs.

Trump hasn’t necessarily shown himself to be a friend to the card companies though. On the campaign trail last year, he surprised many by proposing to cap credit card interest rates paid by cardholders. Some Congress members, including Sen. Bernie Sanders, an independent from Vermont, have already volunteered to work with him on such legislation.

Card segment turmoil persists

Even the suggestion that interest rates could be capped is a key sign that card companies will remain under pressure this year.

The card companies in recent years have been under scrutiny as the bipartisan duo Sens. Dick Durbin and Roger Marshall campaigned to pass the Credit Card Competition Act, but the bill aimed at directing more competition at the Visa-Mastercard duopoly has languished. 

That could change this year if the Republican vitriol directed at Visa and Mastercard during a November Senate hearing on the CCCA proposal is any indication. Congress members lashed out at the card networks, and some even suggested more severe legislative moves to rein in credit card interchange fees imposed on merchants.

“Senator Durbin is well known to be antagonistic to Visa and Mastercard, for reasons I support, but he has some interesting allies, and that keeps the prospect that the bill could pass very much alive heading into the new Congress,” said Jeff Shinder, an attorney with Shinder Cantor Lerner who has pressed class action claims against the networks on behalf of merchants.

Intense competition targeting bank card issuers and their network partners’ domination of payments is likely to continue. Companies pitching digital payment alternatives, including Block, PayPal and Klarna, have largely gained strength since the COVID-19 pandemic directed more business their way. That’s true both respect to online shopping and in-store checkout options.

In 2025, industry forces will likely spur on some card-free options seen as more cost-effective by merchants, and considered more convenient by consumers.

“The key theme around all of this is that banks have to stop playing defense, and they need to start playing offense,” said Erika Baumann, the director of commercial banking & payments at Datos Insights. “The fintechs are developing and innovating, and the banks need to be more aware of prioritizing their roadmap as opposed to following,” she added during a December interview.

The card industry could chalk up a win if the Federal Reserve reverses course, or weakens, a plan to reduce the amount that banks can charge merchants when consumers swipe their debit cards. The Fed in 2023 proposed to lower a cap on that interchange fee by about a third, but the central bank has yet to finalize the rule after an outburst of bank opposition.

Payments modernization stokes account-to-account payments

Pay-by-bank options that move funds from one account to another, without card intermediaries, are perceived by many in the industry as likely to gain ground in 2025. That’s partly because there is a broader modernization of payments systems underway.

That move toward modernizing payments systems, some of which are still bogged down in banks’ use of COBOL code, will be egged on this year by the advance of a new international standard called ISO 20022. The standard has been implemented at different paces around the world, and will progress in the U.S. this year as the Federal Reserve embraces it, including with a March 10 shift to that message format for the Fedwire Funds Service. 

As those changes occur, pay-by-bank options, also known as account-to-account payments, are likely to get more attention. “A2A payments will soar” in 2025, partly because of increased interest from stakeholders such as central banks, consumers and commercial banks, analysts at S&P Global Market Intelligence predicted in a report last month.  

Embedded payments, often via apps, for everything from ride-shares to morning coffees underscore the consumer habits driving the shift to digital alternatives, sometimes including a card, but often not. 

The CFPB’s efforts over the past two years to usher in the era of open banking, where consumers have more leeway to move between financial institutions, is expected to support the move toward more pay-by-bank applications. With open banking, third-party payments service providers have more wherewithal to work with banks in developing new services. 

Jane Larimer, the CEO of the not-for-profit payments association Nacha, said industry participants often have different views of what pay-by-bank entails, but her organization is part of an effort to define its meaning in support of its rise.

“We’ve started a work group to bring the industry together to define what is pay-by-bank,” Larimer said in a December interview. A kick-off meeting for the group was held last month, with another scheduled for this month, according to Nacha’s website.

Real-time payments crusade for adoption

Mushrooming consumer use of digital payments will keep a focus on real-time payments, even if it's partly because the Fed has had some difficulty attracting banks to FedNow, its new instant payments system.

Banks haven’t signed up for the Fed’s new instant payments system as enthusiastically as some in the industry expected since its mid-2023 launch, with about 1,200 bank participants so far. But some of the largest financial institutions are staying away. 

FedNow payments volume has also been muted, based on the first statistics disclosed late last year, as banks roll out use cases slowly. The value of payments settled on FedNow during the third quarter was $17.5 billion, which amounts to just a tiny fraction of the $21.5 trillion that flowed over the ACH network during that period. 

“The reality is the use cases become somewhat niche,” said DeSanctis, the Cornerstone director. 

Another drag on FedNow has been a lopsided adoption pattern with more banks signing up to receive payments, and fewer agreeing to send payments. The Fed is turning its marketing muscle on that shortcoming, reminding banks in a November post that it “can save time and resources” to enable receive and send functions at the same time and another post notifying them of a new send limit feature to allow for better liquidity management.

Industry participants expect the central bank to press ahead aggressively with the system that costs $250 million annually, partly because the U.S. is playing catch-up relative to other countries that have moved ahead faster, some by way of government mandates.

In the U.S., consumers or commercial entities may ultimately need incentives to spool up use of the FedNow system because a mandate is unlikely in this country, said Tom Warsop, CEO of the Elkhorn, Nebraska-based payments software company ACI Worldwide.

But real-time payments services aren’t being offered only by the Fed. The government’s private real-time payments rival, the RTP network, nearly doubled its payment volume last year to $246 billion, according to The Clearing House, which operates the system under ownership by major banks.

Artificial intelligence becomes multi-use tool

Artificial intelligence applications and conversations will rev up this year as payments and fintech companies find new uses for it. AI became a ubiquitous theme at industry conferences and during earnings presentations last year.

With AI able to improve efficiency and productivity by analyzing massive amounts of data quickly, industry executives are brainstorming how they can harness it to streamline their internal operations and to improve customer service.

One of the most talked about AI considerations is its usefulness in buttressing fraud prevention, whether spotting patterns in criminal schemes or improving software code.

While bad actors employ AI, the emerging technology is also increasingly being used by payments companies and fintechs to anticipate and counter fraud. 

Fighting fraud is one way ACI Worldwide is deploying AI, said Warsop, the company’s CEO. “It’s powerful because you can find these patterns much quicker and more effectively using AI,” he said in a December interview.

In addition, ACI is turning to AI to improve the performance of its customer representatives and as a tool for its software developers.

Digital card company Marqeta has tapped artificial intelligence in designing services that aid its buy now, pay later customers in choosing the right loan or installment plan, said Fouzi Husaini, who is the Oakland, California-based company’s chief artificial intelligence officer.

“If we leverage all of the data that we know about a customer, and what we think is going to be the best outcome for that customer — what's the right buy now, pay later options for them — we can give them a recommendation based on that,” Husaini said in an interview.

Another payments industry company, Airwallex, is using AI to expedite the approval of new customers by reviewing a potential customer’s credit and spending history in an instant, said Ravi Adusumilli, executive general manager for the Americas at the Singapore-based financial technology company. AI has the ability to make the process “faster, cheaper, more efficient, and more accurate,” he said. 

Deluxe, a Minneapolis-based data and payments company, has tapped AI to improve accounts payable and receivable services for small- and mid-sized business clients, said John Rubinetti, the company’s president of B2B payments. AI can make payments processing more efficient by sorting payment types, matching them up with past data, flagging exceptions and then generating reports that show an improved path to managing the payments, he said. 

Nacha, which manages the ACH network, also plans to make more use of AI, Larimer, said. “With artificial intelligence, one of the things that we’re looking at are tools that people can use with AI to help them with their understanding of the Nacha operating rules,” she said.

Stablecoin rise with B2B, cross-border use cases

Cryptocurrencies are likely to become more relevant in 2025 as fintechs, emboldened by the Trump administration’s support, push them as a viable means of payment. Stablecoins, which are a less volatile alternative to digital assets like bitcoin, will be the biggest beneficiaries of that new momentum, according to analysts and consultants who follow the industry.

Stablecoins are pegged to the value of a fiat currency such as the dollar or the euro, meaning they don’t surge or plummet in value like other cryptocurrencies. In spite of this, stablecoins have yet to achieve widespread use among consumers or businesses.

However, this could be the year that stablecoins go mainstream in the payments industry, said Sampath Sharma, a senior research analyst for S&P Global focusing on financial technology.

“We’re increasingly seeing traditional payments players, [payment service providers], banks, and card networks, getting into the stablecoin space, adding to legitimacy of stablecoins as medium of exchange,” he said.

For instance, stablecoins will be more frequently used to transfer money across national borders in 2025, analysts and consultants predicted. Moving money between countries is expensive and complicated, and converting payments into stablecoins and sending them to an overseas merchant or consumer could cheapen and simplify that process.

“It removes the constraints of the traditional banking system,” said Kwamie Dunbar, director of fintech programs at Worcester Polytechnic Institute.

Dunbar expects remittances to be a major application for stablecoins in the coming year, as the digital assets — which require only the use of a smartphone — give the unbanked and underbanked an easier way to transfer money.

Sharma singled other out wholesale and business-to-business payments as two possible areas where there may be an increase in stablecoin transactions in the future.