What does the future of credit card processing hold? And will it really impact every type of business?
Those are great questions because 2025 is upon us all. With the new year, fresh payment technology and security regulations are arriving in droves.
Don’t worry, though. We have put together an easy-to-read collection of trends you should prepare for in 2025. National Processing is excited about many of the innovations ahead (biometrics especially).
Since there is a lot to cover, and we don’t want to waste any of your valuable time, let’s dive right in (each topic is listed below).
- Contactless Payments Dominate
- The Biometric Authentication Boom
- AI And Machine Learning In Fraud Prevention
- Integration of Alternative Payment Methods
- Enhanced Customer Experience
- Regulatory Changes And Security Enhancements
- Conclusion
- FAQ
Future Of Credit Card Processing Sees Contactless Payments Dominate
The future of credit card processing is moving deeper into contactless payments. Why?
Speed is a core need of shoppers today. Convenience is related to that need and just as vital.
You likely see this yourself in everyday life as things get busier each year. With people’s schedules filling up and becoming overwhelming, they will seek more ways to save mere minutes where they can — this includes their shopping activities.
Contactless payments via NFC technology make in-person checkouts a smooth experience in a litany of ways. The digital transaction is quicker. Yet, there’s less time waiting for a swipe to work properly, especially with damaged or worn-out credit cards.
And the need to hand a card back and forth between merchant and customer is eliminated.
These things may only save seven or eight seconds, but that adds up over days, weeks, and months (for the merchant and customers).
Payment Technology Trends — Biometric Authentication Boom
Almost everyone has used biometric authentication via fingerprint scanning on their smartphones. Now, facial recognition tools are becoming just as popular as fingerprint authentication. These innovations are helping make the future of credit card processing reach new levels of security.
Did you know that advanced biometric authentication methods will one day replace traditional PIN numbers and signatures for credit card transactions?
This shift won’t take place overnight. But there is little doubt the change will arrive, due the need to stay ahead of the bad guys online.
Now take a look at some mind-blowing biometric authentication technologies that are on their way to being available to merchants. Note that these are still in research mode:
DNA-Based Authentication
This would analyze an individual’s genetic code to verify their identity. While highly accurate, DNA-based authentication faces challenges with processing speed and privacy pitfalls.
Heartbeat Recognition
A person’s unique heart rhythm is used as an identifier. Sensors are being tested to analyze heartbeat patterns for authentication purposes. The technology is still in early stages.
Odor Recognition
This sounds like science fiction, yet researchers are truly investigating the potential of using a person’s unique body odor to authenticate their identity.
Brain Wave Patterns
Brain waves are being studied as a potential biometric identifier since they are difficult to mimic.
Vein Pattern Recognition
Vein pattern recognition systems exist already. Research is looking into using vein patterns in other parts of the body (besides hands), such as the retina.
Gait Analysis
Unique walking patterns are an unusual way to authenticate someone’s identity. Though, with fraudulent actors using unique illegal tactics, the good guys have to think outside the box too.
No one knows which security innovations will become mainstream tools. However, it’s nearly a foregone conclusion that a post-password future of credit card processing will arrive.
AI And Machine Learning In Fraud Prevention
You may be hearing lots about how scammers are using AI to commit fraud. AI is simply a tool, though. It can be used for good or bad. When it comes to the future of credit card processing, as a merchant, you must utilize AI to fend off criminals.
One of the best aspects of artificial intelligence is machine learning. You already know that criminals who steal credit card numbers and private data are constantly learning new tricks and tactics. To shield your business from those crafty individuals, you can implement new AI solutions that adapt to criminal strategies on the fly.
See the following ways AI is impressive as a fraud preventative:
- Analyzes hundreds of transaction factors in milliseconds
- Learns from new fraud patterns automatically
- Reduces false card declines (a huge benefit)
- Adapts to your customers’ shopping habits
Not only is AI an iron-clad security tool, it can increase your business revenue. How?
Personalizing offers to the right shoppers at the ideal time.
Your payment processing platform tracks valuable shopper behaviors (as we discussed in this article). This data is easily comprehended by AI tools then converted into effective marketing tactics, strategies, and precision advertising campaigns.
These machine-learning payment technology trends are pretty exciting, right? We listed all the upsides below (for you and your customers).
For Merchants:
- Fewer fraudulent transactions
- Lower chargeback rates
- Increased customer trust and loyalty
- Higher approval rates for legitimate sales
For Customers:
- Smoother checkouts
- Fewer false declines
- More personalized offers
- Better fraud protection
- Less worry of private information leaking
We can’t forget about alternatives that are on the horizon, either.
Credit Card Processing Evolution Of Alternative Payment Methods
2024 saw many alternative payment methods pave the way for the future of credit card processing. Three methods of note were BNPL (Buy Now, Pay Later), crypto payments, and embedded payments in non-financial platforms.
Remember, the more payment methods you offer your customer base, the more likely they are to buy from you. Not only that, but each loyal customer like that means chances to gain referral business from their friends, family, and neighbors.
What about other payment alternatives that could take hold in 2025?
- Government-backed digital currencies may become more common (Central Bank Digital Currencies).
- Advanced biometric methods could become standard for authorizing large purchases (here’s why).
- Artificial intelligence may optimize transaction routing to reduce fees for merchants.
- Eco-friendly payment platforms with carbon offset programs, allowing consumers to support environmental causes with purchases.
- Blockchain-based solutions offer hope for simplifying international transactions and reducing costs.
Enhanced Customer Experience
Happy customers mean happy business owners. The challenge is heightened customer expectations in today’s on-demand age. So many convenient apps, services, and products have raised the bar for providing uncommon experiences for shoppers.
However, as a business owner, you can never go wrong by offering rewards to your loyal customers and clients. It does take setting up a solid system to track loyalty programs so you don’t miss opportunities to show appreciation to top shoppers.
Ask your payment processor about tools and features their platform has to help you implement reward programs to save you time setting up your own system.
Your payment platform may be able to track which loyalty programs result in the best ROI (return on investment). Ask your processor account manager about tools you may be missing (they will only get better in 2025 with AI advances!).
Need more ways to take customer experience to the highest level? See the possibilities below:
- Easy omnichannel payments (i.e., enable customers to start payment on one device and finish on another device)
- Collect customer feedback via surveys, reviews, and social media
- Live chat, email, and phone support meet customers where they’re at
- Use virtual try-ons for online shoppers
- Simplify online and in-store checkout to reduce friction (a three-second hassle can cost you a sale)
- Consider events, workshops, or classes to build community around your brand
- Offer the best mobile shopping experience possible (these stats show why)
Regulatory Changes And Security Enhancements
If you pause to look at how much focus is now on protecting customer data today, consider this—that focus will never become less intense. Too many data leaks have happened.
That has forced the government into being proactive in protecting Americans from poor data practices by businesses.
Credit card networks have also been mandated to level up their consumer protection efforts.
This is good news for consumers. Honestly, it’s great for quality businesses like yours too, because you want to do right by your customers. They trust you by shopping with you. It is only right to reward that trust by protecting their data at every level so they never have to worry about crimes like identity theft.
Thankfully financial institutions are using stronger security tools to keep customer info safe. They have also enacted advanced techniques for transferring data, taking a multi-layer approach.
Open Banking takes it a step further, allowing banks to share customer data if a customer requests them to do so.
Besides Open Banking, the following changes will affect the future of credit card processing:
- A push to use Multifactor Authentication (MFA) across all access points to cardholder data
- End-to-end encryption standards for all data transmissions
- PCI DSS v4.0: Organizations must comply with the updated PCI DSS v4.0 standard
- Continuous monitoring and real-time detection of possible fraud, paired with open APIs to prevent fraud and chargebacks
Two key updates inside PCI DSS v4.0?
Passwords must be strong, unique, and meet complexity criteria. Second, businesses are now able to use whichever technology they choose to maintain PCI compliance (the main point is compliance versus being pigeonholed into tools that don’t fit specific organizations).
Conclusion: The Future of Credit Card Processing
Credit card processing’s future is a bright one, as you can see.
There are plenty of exciting technologies ramping up to meet the shifting sands of customer needs and buying habits. Contactless payments were a great way to handle payments during the 2020 pandemic. That innovation has spread rapidly since and in 2025, contactless payments will evolve into higher levels of convenience.
Then you have the enormous upsides of biometric authentication that is making it hard on the criminals who once found using stolen credit card numbers as easy as falling off a log. AI technology is also tripping up fraudsters’ efforts to steal payment information.
Plus, machine learning has huge potential for cutting down on so-called friendly fraud by nipping habitual return abusers in the bud.
Finally, alternative payment methods and leaning into delighting customers show that convenience and payment security can work hand in hand. This means you can increase your revenue and scale your operations while adhering to new regulatory guidelines.
If you want to get ahead of future credit card processing trends and skip compliance hassles, partner with National Processing.
We have the experience to guide you on the endless changes coming merchants’ way. For nearly two decades, we’ve worked with business owners who didn’t need payment distractions keeping them from important business tasks.
National Processing takes payment hassles off your plate — for good. Sign up with us and see for yourself.
FAQ Payment Technology Trends
Are there privacy concerns with biometric authentication?
Some experts believe facial recognition technology could lead to tracking individuals across different locations. An example of this fear is the potential monitoring of protesters or activists. Also, loss of privacy in public places is a concern.
Is there one thing that hurts in-store customer experience more than other issues?
Yes. Long waits at checkout are consistently shown to irritate customers most. One survey revealed 66% of customers pointing to lengthy checkout waits as a key irritation.
How can merchants use AI-tracked shopper habits to increase sales volume?
Leverage purchase frequency and recency. Create targeted campaigns to encourage repeat purchases and re-engage customers who have not purchased lately. Also, use the power of temporal landmarks to target shoppers because they are more receptive to trying / buying something new on “new days” or “milestone days” (i.e., first day of the month, New Year’s Day, birthdays, anniversaries).
