Future of Payments: AI, Blockchain & Regulatory Shifts in 2025

If 2025 represented a watershed moment where the envisioned future of payments transitioned from conceptual anticipation to operational reality, this observation is astute. Within the dynamic realms of payments and commerce, profound shifts seldom herald their arrival with isolated product launches. Instead, their emergence is often discernible through the candid perspectives of executives, as they articulate the constraints, competitive landscapes, and non-negotiable principles that delineate their operational environment. This analysis offers a guided exploration of these pivotal developments, drawing upon insights from industry leaders.

At its core, PYMNTS has consistently championed the principle that the architects of the connected economy should articulate their visions and challenges in real-time, influencing decisions as they are formulated. This encompasses not only senior executives but also operators, regulators, and infrastructure custodians whose critical contributions often remain outside the mainstream spotlight. Throughout 2025, a recurring theme resonated across numerous interviews: the technological stack and the regulatory landscape are undergoing rapid transformation, a pace many institutions are reluctantly acknowledging.

AI: The New Governing Layer in Payments

Unsurprisingly, Artificial Intelligence (AI) emerged as a dominant headline, yet its impact extended far beyond the conventional "chatbot launch" narrative. Instead, AI solidified its position as a pervasive governing layer, fundamentally altering how consumers discover products, how merchants convert demand into sales, and how essential functions like risk management and compliance are executed.

Consider Pinterest, where the ambition transcends mere search enhancement. The objective is to compress the entire journey from initial inspiration to final transaction. Dana Cho, Vice President of Design at Pinterest, eloquently captured the core behavioral signal: "A Pin is a declaration of intent." This singular insight elucidates why AI models, meticulously trained on "taste" data, are poised to evolve into powerful commerce engines, rather than remaining confined to conventional recommendation systems. Pinterest’s mandate is clear: to "collapse the distance between ‘love it’ and ‘own it,’" thereby reinjecting joy into the purchasing experience, an aspect often overshadowed by the transactional efficiency that technology has already mastered.

On the merchant-facing front, PayPal conceptualized AI less as a magical solution and more as a strategic mechanism for layering value across diverse channels. Executive Vice President Frank Keller succinctly articulated this perspective: "The card isn’t disappearing, but we can layer value through financing offers and cross-channel loyalty." The underlying sentiment, echoed across multiple executive discussions, is that AI is increasingly functioning as the critical connective tissue, seamlessly integrating identification, personalization, financing solutions, and loyalty rewards into a cohesive and continuous consumer experience, transcending disjointed tactical approaches.

Scoping the New Commerce Landscape

This domain witnessed some of the most assertive and forward-thinking executive positioning. Max Levchin, CEO of Affirm, for instance, framed Buy Now, Pay Later (BNPL) not as a mere coupon or a credit workaround, but as an emergent network that instigates a profound mindset shift in how consumers perceive and experience financial control. Levchin emphasized the inherent power in "the sense of clarity of when [payments] start and end." He then advanced a compelling, attention-grabbing assertion: "We’re a payments network… We are, today, in the world of network comparable to a company like American Express."

This reframing fundamentally alters the competitive dynamics. The paradigm shifts from BNPL versus traditional cards to a broader contest among networks vying to command the consumer’s financial "moment" at checkout. In this evolving arena, AI increasingly plays a decisive role in determining which offers are presented, which payment options instill the greatest sense of security, and ultimately, which brands successfully cultivate enduring loyalty.

Pattern, following its significant IPO, offered a complementary argument from the brand-enablement echelon of eCommerce. CEO Dave Wright summarized Pattern’s foundational operating thesis as a direct counterpoint to the prevailing roll-up era: "We were really just tech first. At our core, we’re really a technology company." This translates into a crucial insight: in a world where product discovery and conversion processes are being entirely re-engineered, the traditional storefront is no longer a static website but an adaptive, technologically driven system.

Loyalty Becomes Economic Leverage

An interview with Expedia sharply underscored the evolving nature of loyalty programs: points are no longer simply perks, but have transformed into both a vital consumer coping mechanism and a strategic bargaining chip for partners. Alfonso Paredes, B2B President, elaborated on how economic frugality "changes the math": "When you’re in this economy of trying to save money, you’re going to look more into the details on who gives you more points." He further quantified this behavioral trend with statistics that should prompt serious consideration from any issuer or travel partner: "Eighty-five percent of customers are looking to redeem… during the different paths of the shopping experience."

The provocative implication is that loyalty is progressively converging with utility. Should the rewards experience fail to materialize precisely when a consumer is making critical tradeoffs, the entire "program" risks becoming inert. In such an environment, AI-driven personalization ceases to be a mere growth lever and rapidly escalates to the status of table stakes for market participation.

Real-Time Meets Cross-Border

PagBrasil’s narrative regarding its Pix expansion exemplifies the next evolutionary phase of account-to-account payments: achieve domestic scale, then seamlessly export the experience across international borders without introducing undue complexity. Ralf Germer, CEO of PagBrasil, captured the fundamental economic driver with disarming simplicity: "Argentines are big travelers." He immediately linked this to a pervasive friction point: "At the end, tourism is all about people spending money… There is a friction… and this is what we are solving."

Germer’s most salient claim centered on behavioral economics: "People will spend more because there are no constraints now." This assertion poses a direct challenge to the established economics of card networks in corridors characterized by high taxes and significant foreign exchange friction. It also powerfully reinforces a recurrent theme observed throughout 2025: the truly winning payment rail is the one that effectively recedes into the background, becoming invisible while simultaneously enhancing trust, accelerating transaction speeds, and reducing associated costs.

Crypto Grows Up: Focus on Compliance and Utility

The conversation with Chainalysis illuminated the significant maturation that the traditional finance sector has long anticipated within the cryptocurrency space: the emergence of measurable compliance narratives, rather than mere assertions. Jonathan Levin, CEO of Chainalysis, directly addressed the persistent "illicit-use" trope: "It started off much higher, but now it’s consistently below 1% of the transactions" linked to malicious actors. He articulated the pro-enterprise case for blockchain more candidly than many crypto executives: blockchain technology can empower "enterprises identifying risky activity" and enable law enforcement to "hold scammers to account."

Levin’s optimism regarding AI was grounded in pragmatism, eschewing hype: "I’m very optimistic about the potential for AI to actually contextualize… transactions and concepts for people." The underlying implication is undeniable: the subsequent phase of cryptocurrency adoption will be driven less by ideological fervor and more by the development of sophisticated tooling that renders compliance legible and scalable.

Regulation: From Brake to Stabilizer

Two distinct interviews—one with a state regulator and another with a former federal banking regulator—crystallized the year’s most critical governance argument: genuine innovation cannot achieve scalable adoption in the absence of credible guardrails. Adrienne Harris, New York DFS Superintendent, directly countered the simplistic binary of consumer protection versus economic growth. "Too often we set up a false choice in financial regulation," she stated. Her thesis was unequivocal: "You can protect consumers and markets and be good for business at the same time."

Michael Hsu, transitioning into the venture capital domain, specifically targeted the pitfalls of distance and abstraction. "I don’t want to be in an ivory tower writing papers about it," he conveyed to PYMNTS. His career pivot encapsulated a broader phenomenon of 2025: the traditional boundary separating financial builders from rule-writers is progressively blurring, primarily because the technological stack is too consequential and evolving too rapidly for either party to operate in isolation.

In summary, AI acted as the primary accelerant. The deeper, more enduring narrative revolved around fundamental infrastructure: networks strategically repositioning themselves, loyalty programs transforming into tangible currency, real-time payment rails expanding across international borders, cryptocurrency achieving a new level of auditability, and regulation evolving from a restrictive force into a dynamic stabilizer. The year’s most controversial moments were not characterized by outrageous occurrences, but rather by profound clarification. Executives across the financial spectrum ceased to operate under the pretense that outdated frameworks remained viable.

If 2025 served as the year leaders meticulously described the new operating conditions, then 2026 is poised to be the year they definitively demonstrate which architectural paradigms genuinely achieve scale. PYMNTS remains committed to its core mission: consistently capturing executive voices on the record, rigorously pressure-testing claims against market realities, and accurately translating early signals, thereby providing crucial foresight while there is still ample opportunity for proactive engagement.