Trends and challenges in the payment landscape – in APAC and beyond

When recently asked about the key developments and challenges I see shaping the payments industry in 2025, and how the industry should innovate and adapt, a number of topics came to mind.

Two key developments:

• Expansion of stablecoin usage under regulatory frameworks

With the introduction of MiCA (the markets in crypto assets framework) in Europe, and expected regulatory frameworks coming in the US, stablecoins are set to gain wider acceptance. In some cases, they may challenge traditional national payment infrastructures, prompting central banks to modernize their systems in order to maintain financial sovereignty and competitiveness.

• Leadership on cross-border payment connectivity and interoperability – driven by Asia

Asia is taking the lead in developing cross-border payment systems, with a strong focus on transactions in national currencies. The NEXUS project, while expected to start but not complete this year, represents a critical step toward enhancing interconnectivity between countries. Alongside initiatives like BUNA and GCC RTGS, such projects are shaping a future of seamless, interoperable regional payments. These advancements could reduce reliance on traditional methods like card payments, particularly for cross-border travel and trade, while emphasizing regional collaboration to address global payment challenges.

Two major challenges to overcome:

• Interoperability across systems

Interoperability has always been a challenge in the payments industry, but the pace of innovation and the rapid emergence of diverse national and cross-border systems are making it increasingly difficult to manage. As everything begins to move faster, businesses must adopt modular system architectures and collaborate on international standards to ensure seamless integration and compatibility.

• Cybersecurity and fraud prevention

The rise of AI has intensified the cybersecurity landscape, with both payment companies and fraudsters leveraging advanced AI tools. Fraudsters are becoming more sophisticated, using AI to exploit vulnerabilities and mimic legitimate behaviour, making detection harder. 

How can the industry tackle these challenges effectively?

Collaboration, standards, and regulations will play a crucial role in addressing the industry’s challenges, particularly for interoperability. Standards like ISO 20022, with SWIFT’s November deadline this year, are key factors for success. Increased adoption of ISO 20022 will enhance interoperability by providing a unified framework for data exchange between systems. This will not only address integration issues but also enable more structured data collection.

Structured data is a critical enabler for fraud prevention. By leveraging advanced tools, including AI, the industry can analyse transactional data more effectively, detecting anomalies and fraudulent patterns with greater accuracy. Combining collaboration on standards with the adoption of advanced technologies ensures a holistic approach to building a secure and interconnected payments ecosystem.

Combatting fraudulent activity 

With the increasing adoption of new payment methods and technologies, fraudulent activity is rising, and the payments industry is rapidly adopting AI to enhance security. AI and machine learning are being used to detect fraudulent patterns in real time, continuously adapting to new threats. One notable example is the implementation of a National Fraud Portal in Malaysia which addresses issues like funds recovery and has set a benchmark for similar projects. Similarly, Kazakhstan has followed suit with an Anti-Fraud Center that has already prevented close to $2 million in fraudulent activities. 

Fighting fraud is an ongoing journey. Technologies like tokenization, biometric authentication, zero-trust frameworks, and ISO 20022 adoption are key to improving security and making fraud detection more effective. These advancements will help the industry stay ahead of evolving threats.