Brite Minds: Looking Ahead – What 2025 has in Store for Open Banking and Instant Payments
As we enter 2025, the worlds of open banking and instant payments are poised for transformation. From the rapid adoption of embedded finance to the game-changing implications of PSD3 and Instant Payment Regulations (IPR), this year is set to redefine how consumers, merchants, and businesses interact with financial services.
In this edition of Brite Minds, we sit down with new Brite VP of Product, George Parks Davie to explore the trends, challenges, and opportunities that will shape the year ahead. From the rise of real-time account-to-account payments to the emergence of consumer-centric open finance solutions, George shares his insights on the forces driving innovation and adoption in the financial landscape.
What trend will impact open banking in 2025?
George Parks Davie: In terms of impact, we’ll likely see a shift towards more embedded finance. Open banking is just beginning to go beyond data sharing and become increasingly part of consumer services, business interactions, and everyday life.
With this, I believe open banking will enable smoother payment experiences but also improved lending options. I think we’ll see an impact on insurance, too, even if it’s just for onboarding or on platforms that manage consumer finances. With reduced friction and an overall improvement in processes, we’ll likely see much more seamless integration in people’s everyday lives.
How might regulatory developments like PSD3 shape online banking in 2025?
George Parks Davie: PSD3 will be a huge driver for more standardisation overall. With PSD2, the landscape has been very fragmented in terms of feature richness, not only across Europe but even within individual countries. This has posed a significant issue from a market perspective for players like us and others in fintech who want to create robust products. PSD3 will be crucial for standardisation and interoperability, as well as fostering a better user experience and more innovation.
However, for 2025, I doubt we’ll see significant changes, as the real impact will probably come around 2026, which is likely when enforcement will begin, and we’ll start to see effects on products. But I think that ongoing discussions in 2025 will be valuable, helping create a more open dialogue between banks and market leaders to better prepare the industry for PSD3 when it finally takes effect.
How might barriers for consumers and merchants adopting new payment methods shift in 2025?
George Parks Davie: That’s an interesting one. There has definitely been hesitation around the adoption of account-to-account payments in some countries, both for merchants and consumers. But with lower fees becoming more widely known and faster settlement times on the horizon with instant payments, especially compared to intermediaries like credit cards, instant A2A payments will become increasingly attractive.
What do you think will be the biggest trend in payments within Europe?
George Parks Davie: Seamless payment experiences. I see real-time account-to-account payments attracting many more businesses. Additionally, alternative payments like digital wallets will continue to grow. We’re seeing more companies, not just the well-known players from the US with popular wallets, but also other businesses developing their own wallet solutions and ideas.
Again, embedded finance will keep expanding, allowing financial services to meet consumers wherever they are—whether that’s in an app, online, or even in retail stores. This cross-vertical adoption, being omnipresent across various consumer channels, will be a major trend for next year.
How might instant payment regulation influence how merchants view instant payments?
George Parks Davie: With the IPR (Instant Payment Regulation) in place, I think we’ll see a major shift in acceptance. And with SEPA instant payments becoming free of charge for consumers starting on 9 January will likely encourage merchants to accept more account-to-account payments instantly.
This will eliminate the unpredictable burden of consumer fees. These placed unseen additional costs on consumers and discouraged the adoption of PSPs. The fee structure was a wild west, and none of the companies that wanted to accept SEPA instant followed through with the implementation due to the risk of losing their customer base because of unknown extra costs on the consumer side (banking fees).
Now, with these fees removed due to new regulations, I think it will be a game-changer for the industry. The IPR is levelling the playing field.
Which industry do you think will see the most growth in A2A payment adoption in 2025?
George Parks Davie: By enabling faster, cost-effective transactions, merchants will be in a stronger position against traditional systems like credit cards and even buy now, pay later (BNPL) options. Commerce, in general, will definitely be impacted positively. However, I also think the biggest impact will be on the travel industry, which is traditionally very credit card-reliant – here we may see significant change. Hotels, airlines, and other related businesses will benefit greatly from instant account-to-account payments.
Of course, other high-ticket items like car brands and luxury items, as well as investments like stocks, ETF platforms, and crypto, will also benefit from and likely grow in A2A payment usage.
Do you think European consumers are ready for the concept of a super-app?
George Parks Davie: Yes, to some extent. Personally, I don’t see a WeChat-style app emerging, but I think it could happen in a more market-driven way, with multiple pathways to super-app functionality.
In fact, we already have some early versions of super apps today like Check24 in Germany. Another example would be the Klarna app, where users can do price comparisons, manage BNPL options, access cashback, use credit cards, manage bank accounts, and even savings. Then you have other platforms like Revolut, which are broadening their offerings, often related to finance but also incorporating shopping and similar services. So, I think we’re already seeing the first wave of super apps emerging in the market.
What might be one trend in payments that people like you in the industry are really excited about but that might take a bit longer to reach consumers or merchants?
George Parks Davie: What excites me even more is what’s happening with open banking and open finance. Supporting customers in achieving their financial goals is something I find incredibly interesting. Helping people towards financial wellness and sustainability, creating actionable insights that can improve people’s relationships with money. Whether it’s a better visualisation of spending, increased awareness of their financial movements, or gamification in personal finance apps, it’s all about engaging people more deeply with their finances.
This approach empowers consumers to take control of their financial situation and future. For instance, programmes where purchases are rounded up to the nearest euro and the extra cents go into an investment portfolio offer a seamless way to save and invest, working towards financial sustainability and a better future. That’s something I find very exciting.
Combining this with another big topic—which we probably don’t have time to explore fully here—is the idea of financial assistance AI. Imagine having a financial assistant who helps you set and reach financial goals, educates you on how to achieve a healthier financial life, and guides you towards those goals in an easier and more efficient way.
Yes, it’s about helping people understand their financial status and giving them tools to improve it, which could lead to a better, more sustainable relationship with their finances.
How do you think open finance will impact the payment landscape?
George Parks Davie: In addition to enabling healthier financial lives for consumers, open finance also has the potential to make financial products more personalised. For instance, data-driven insights could help both individuals and small businesses access more tailored lending options and other customised offerings.
For example, if a customer’s financial profile shows that they frequently buy sports equipment — running shoes, gear, watches — they could receive commerce offerings better suited to their interests without needing a survey or interview. Bespoke information based on financial behaviour can provide a better, more personalised offering for consumers.
Another positive impact is supporting improved financial health in daily life and better retirement planning by understanding financial behaviours. Purchase frequencies, overspending, and understanding monthly run rate costs with insurance, utilities, and subscriptions – all that spending could be optimised.
Indeed, for instance, a consumer might be offered an upsell of a streaming bundle, including Netflix, Disney, and Dazn, in a discounted package rather than having three individual subscriptions. Or, when changing a utility provider (gas, electricity, internet, phone, etc.), only be shown cheaper offers compared to what they are already spending. Likewise, a monthly travel pass might be recommended for a commuter in order for them to cut down on their monthly travel costs if it is detected they might benefit.
Summing it up, I believe the payment landscape, along with open banking and open finance, will become much more consumer-centric. It’s all about enhancing financial well-being and making services more responsive to individual needs.
Learn more about Brite Payments
2025 marks a pivotal year for the evolution of open banking and instant payments. With the rapid growth of embedded finance and the transformative potential of PSD3 and Instant Payment Regulations (IPR), the landscape of financial services is set to be redefined, reshaping interactions between consumers, merchants, and businesses alike.
If you would like to know more about Brite’s payment methods or our other financial services, please contact us.