The Five Not-So-Obvious Things That Will Change the Digital Economy in 2025

It’s only been for the last 443 years that the start of the new year was celebrated on January 1^st.  For millennia before that, it wasn’t until late March and on the day when the number of hours between darkness and light was the same. We have Pope Gregory XIII to thank for standardizing the start of the new year on January 1^st in 1582 in Christian countries, even though it would be another 170 years for Britain and the U.S. (still a collection of British colonies until 1776) to follow suit.

Regardless of when the calendar pages change from one year to the next, many traditions stand the test of time. People still get dressed up and have parties. People still bang drums, light fires and kiss loved ones the very instant the old year becomes the new one. People still resolve to be better, even though they no longer do that in the hopes that the Gods will spare them. And people still make predictions about the year ahead, even though they no longer look to the stars to chart the future. As in the stars in the skies, not celebrity influencers.

But 2025 isn’t just another new year.

It is the midway point of a decade that has been indelibly changed by a global pandemic that lasted three years — and influenced by the rapid shift to digital, record levels of inflation and rising interest rates and, more importantly, by the introduction and adoption of GenAI.

And, at this midpoint, according to the Economist, nearly half of the world’s population lives in a country with a brand new political administration, with most representing a dramatic departure from the one they replaced.

That includes the U.S.

It seems like globalism is out, industrial policy is in and regulation is out.

It is inevitable there will be ripple effects on the pace and progression of innovation one way or the other.

On the first Monday of every year, I share my thoughts on the key themes that will shape the future of payments and the digital economy. My theses are based on data from across the 129 PYMNTS Intelligence studies and quarter of a million consumers and executives we studied in 2024, along with the hundreds of conversations I’ve had with some of the most interesting and innovative business leaders at the coalface of digital transformation.

That led me to these themes. Five for 25.

And whether you think I am six days late or two and a half months early depends on the calendar you use to start counting.

1. The Search for Simplicity Drives the Rise of the Orchestration Economy

The decade of the 2010s was about the rise of platforms and the creation of app ecosystems. For consumers and businesses, an all-you-can -eat menu of apps was just a download from inside an app store or API call away. Those apps lived their separate lives on whatever screens consumers or businesses used to access them.

At the start of 2020, we observed the convergence of single apps into ecosystems accessible through a single, digital front door. The rise of the connected economy for consumers, fueled by the global pandemic, meant downloading a single app like Instacart to order food and other essential items from dozens of stores or using their Uber App to book a ride, rent a car and have food delivered.

At the halfway mark, we see that convergence intensifying — and the rise of what I call the orchestration economy changing how businesses interact with each other and how services and capabilities will be accessed and delivered.

The complexity of business, the growing concerns over third-party risk and liability and the time and cost of vetting and integrating multiple providers contribute to this shift. So does the analysis paralysis from the sheer number of app options and point solutions now available to consumers and businesses.

In 2025 and beyond, new intermediaries will connect a portfolio of relevant features that they assemble with customers. These “uber orchestrators” operate like purpose-built business operating systems, deciding which features are relevant, how much of the tech stack they want to build and own, who they partner with or even buy and the economics of access. They make access to those capabilities relevant to customers — and their end consumers — easy. They make simplicity their source of monetary value.

Think of this as the platform and app ecosystem model turned upside down. Rather than the platform encouraging the birth of apps for its ecosystem, the orchestrator assembles or creates apps for its own ecosystem.

Orchestrators will commoditize basic, or “tablestakes,” functions that are important but are no longer sources of strategic value, and very often interchangeable. At the same time, they’ll wield influence over the features necessary to add more value to their customers and those they serve.  Those are the capabilities they’ll develop or acquire to create a competitive advantage. Those capabilities will become the cornerstone for the orchestration layer that will quietly disrupt the status quo.

Orchestrators will create competition among point solutions to become part of their stack. The buyers of point solutions will be different, and how they are used will be three or four levels below their ability to influence or control. That means their financial futures are decided by the orchestrators and their relevance and utility.

How orchestrators make their money goes well beyond cost per transaction. Reducing decision and regulatory risk and management complexity becomes a valuable ROI input.

Payments orchestration was the warmup act, the most mature example of the orchestration economy in action. But even that model is evolving to become more than just the giant gateway to local routing and alternative payments options, which is how it began.

We observe credit intermediaries aggregating access to multiple lenders, so merchants get credit optionality for consumers and businesses using a single platform. Data orchestrators are connecting item-level data from merchants with issuers that want to serve offers to accountholders using a single API. Money mobility and embedded banking orchestrators aggregate payments and banking capabilities so banks and non-bank providers have one “front door” through which to access a variety of services suited to their end customer.

In every case, the dynamics between the orchestrator and the feature set inputs it assembles and connects with its customers will reflect the part of the digital economy in which it operates. Regardless, the central tenet is the same.

The orchestrator’s superpower is simplicity and what it monetizes or deprioritizes. As the connector between features and customers, it shortens the distance between a good idea and a new way for businesses to monetize their assets and increase the lifetime value of their end user relationships.

2. Consumers, Not Banks, Force Convergence of Payments and Identity

The value of benchmarked data is the data-driven trendline about consumer habits and preferences. Since 2015, the PYMNTS Intelligence team has asked consumers about the attributes they value from their banks and the merchants they shop.

Over the past decade, consumer priorities have shifted from prioritizing convenience and efficiency to demanding robust fraud protection and innovative security measures. This shift is driven by alarming fraud statistics that highlight the vulnerabilities in how consumer credentials are authenticated, the success fraudsters now have in using technologies to trick people into giving them money and fake identities they create to pretend they’re someone they’re not.

PYMNTS Intelligence data shows that 3 in 10 U.S. consumers — approximately 77 million individuals — have lost money to scams in the last five years, with a median financial loss of $545. Romance scams are even more devastating, averaging nearly four times that amount.

Fraudsters are increasingly successful because they use the best technology has to offer to personalize the scam to the innocent victim: to assume the role of authorities that consumers are told they owe money to or bad things will happen, potential partners they might like to fall in love with, investment and sweepstakes scams that prey on the desperate. It is one-to-one marketing of the worst possible kind. And it’s become a cash register for the fraudsters.

Banks have reported that fraud losses more than doubled from 2023 to 2024, highlighting the escalating threat.

All of this will force banks to make a passwordless future more than a talking point — and use advanced technologies to make identity an embedded part of the payments and banking experience.

This is not a new topic of conversation. The industry has been talking about the convergence of identity and payments for years. Yet passwords still dominate, even though banks recognize the issues and inconveniences they pose for consumers.

What is new is the pressure point that will drive change.

For the first time in a decade, consumers are explicitly flagging “innovation in security” as a top requirement from their banks, moving beyond traditional concerns about convenience and efficiency. Over half (53%) of consumers now indicate they would consider switching banks if scammed, signaling a fundamental change in how financial institutions are perceived and how much harder they must work to keep consumer trust.

The convergence of identity and payments will fundamentally transform consumers’ behavior and their expectations of financial services and payments providers. And not because banks say so — because the consumers will vote with their pocketbooks and do business with those who can protect their data and money and keep their trust. Open banking will make that process easier.

Innovators are investing in new technology to bridge the gap. Biometric authentication, including fingerprint scanning, facial recognition and emerging technologies like palm scanning, are at the forefront.

Digital wallets are evolving beyond simple payment method storage, becoming connected platforms that integrate payments, banking and identity. The rise of decentralized identity systems offers individuals greater control over their personal information and who can access it.

Meanwhile, the payments and financial services industries are leveraging AI and machine learning to improve the accuracy of authenticating consumers and onboarding merchants. Underpinning all these advancements are robust security measures such as tokenization and encryption, ensuring the protection of sensitive user data.

Make no mistake. This technological convergence is not just about enhancing security; it’s about meeting the evolving expectations of consumers who won’t wait forever for banks to catch up.

That puts the onus on the entire ecosystem to use the very best that technology has to offer to build the bridge between transacting and creating the digital consumer identity that becomes their confident commerce passport.

3. FinTechs Fight With Walmart Over Banking the Middle Class

About one in every four U.S. consumers has an account with a FinTech bank.

Roughly 47% of those consumers use it as their primary bank account. That’s about 13% of the U.S. population, or 34 million consumers. Twice as many lower-income consumers use it as their primary bank account. Twice as many Gen Zs as their parents do, too. Many more higher-income consumers have it as a secondary or tertiary account earmarked for particular uses.

The big FinTech banks that capture most of that share include Square with CashApp, PayPal, Venmo, Green Dot with Go Bank, SoFi, Chime and MoneyLion. More want to hop into that pool. The appeal is a mobile app with prepaid debit card that acts like a bank account, letting users spend with that account credential. Most of them offer the same menu of features including two-day early access to paychecks, no-fee P2P, no overdraft fees and high APR on stored balances. Some require a subscription fee, others do not.

In 2025, these challenger banks will have a new challenger: the world’s biggest physical retailer, Walmart, with One.

Walmart has been trying to become a bank since 1999. It’s been a long and winding road. It tried three times to buy an industrial bank. Then it tried to become one in 2005. That effort was scuttled by banks and regulators two years later.

Walmart’s prepaid Money Card launched in 2006 with Green Dot and counted one million users in 2021, according to a joint press release. That card gave consumers a bank account to store funds and buy things. Walmart Money Centers inside of every Walmart store have been offering a variety of banking services to consumers living in the cash economy, including check cashing and remittances, since the mid-2000s; real-time bill pay was added in 2014. It offered a co-branded card with Capital One until May 2024. And it began offering BNPL services with Affirm in 2019.

Walmart doesn’t report results for Walmart Financial Services and its various credit and banking-like products. Likely, however, it represents a negligible portion of its almost $700 billion in annual sales. A million cards after almost a decade, for example, is small potatoes in the card world. Its real value is using those services to get people into the stores to cash their checks, pay their bills and then shop with what’s left.

Well, maybe that’s before One.

At the end of 2024, One was said to have about $200 million in revenues and had processed over $15 billion in payments for its 3 million monthly active users.  Not bad for a FinTech bank that hasn’t been in the market for very long.

Walmart’s hope with One is that it will do what Walmart has been unable to do effectively until now. That is to turn its customer base into a mobile ecosystem. It’s a big market. There are 100 million people who walk through its doors every week, roughly 38% of the adult consumer population. That potential customer pool is about 20% more than J.P. Morgan’s entire customer base (84 million), and about double its active mobile banking population (53 million). It’s 15 times larger than what Chime reports as an active user profile.

The Walmart Pay launch in 2015 was supposed to be that stepping stone — and it showed early promise. It was accepted in all 4,000 Walmart stores. It was integrated with coupons and incentives. Within two years of launch, PYMNTS Intelligence data reported that Walmart captured 5.9% of transactions totaling $15 billion dollars for those 100 million consumers using their phones. To put things in perspective, that volume was the equivalent to roughly 20% of Target’s annual sales volume.

I was as surprised as anyone to watch its user base shrink over time. By 2020, usage plummeted to 3.3% of transactions, representing less than $10 billion in sales. It’s hard to know exactly why, but it was coincident with the elimination of key features like price matching.

Then again, maybe it was by design.

Walmart launched TailFin Labs in 2019 to get Walmart to think like a FinTech. The focus was to create new products that operated at the intersection of payments and retail. That team was tasked with figuring out how to serve the “mass market” consumer with an integrated payments + banking + commerce proposition.

TailFin birthed Hazel, a joint venture with Ribbit Capital, two years later. It was Hazel that acquired Even and One three years ago this month. Rebranded as One, it introduced its app to employees and some customers in 2022. Walmart is now equipped to become the foundation for the banking + commerce platform that has been its goal for the last 26 years.

It was all quiet on the Walmart/One front until last month when the $300M fundraise led by Walmart and Ribbit Capital was announced. This $300 million round sets a valuation of $2.5 billion for One. One says it will use the money to launch a credit card business.

To be clear, One is a mobile banking app independent of Walmart. Walmart is an investor and key stakeholder, but not the operator. But lots of the One goodies all point to Walmart, including 3% cash back on purchases made there and the ability to finance them using a BNPL option. A “Pay by Bank” option in 2025 will let customers to connect their bank accounts for purchases on Walmart.com. (And we know how much Walmart hates paying interchange fees.)

So, it’s not as if the connection is a secret.

It’s also a necessary one. Without it, One is just another FinTech bank trying to build a customer base by offering cash back and early access to paychecks.

One, with Walmart, can use the connectivity they have with brands to disrupt the economics of how pure-play FinTechs make their money. That can become the basis for a disruptive business model that doesn’t rely on investor checks to cover up shortfalls in positive unit economics. The sheer scale of their customer base and supplier relationships, and the ability to connect purchases with offers and financing, is unmatched by any except for one other retailer — Amazon.

But One is important to Walmart in another way: 17% of Walmart customers still pay with cash, and those consumers are invisible to Walmart. So, too, are consumers that pay with cards. Walmart’s incentive with One is to connect consumers with the One app to Walmart-funded offers. That provides important first-party data about who is using the offers. Those are Walmart’s — and One’s — bread-and-butter customers. Although its online sales are increasing, online represents only 16% of Walmart’s retail sales. In the store is where the retail action happens for Walmart.

But to return to banking the middle class, take a look at the Walmart customer.

They are largely lower-and-middle-income consumers. In fact, Walmart customers differ from those of Amazon and the population because they tend to be younger, medium-to-low-income and struggle more financially. Those are also the consumer cohort that is more likely to use digital banking services like those provided by One.

There are the usual headwinds of founding a new consumer-facing banking product, starting with getting customers on board. Banking the middle class means providing the right tools and services that appeal to them.

Right now, One looks like it could be a winner, and highly disruptive.

4. Logistics Become the Digital Economy’s Silent Disruptor

Jeff Bezos was interviewed by Charlie Rose in 2013. Prime with free two-day shipping was in its 8^th year and forcing every other retailer to follow suit. That year, Amazon had just opened its second Amazon Fresh (same-day grocery delivery) location in LA — five years after its first location opened in Seattle.

Rose asked Bezos: what took you five years to figure out? Bezos replied, “Making sure it made financial sense.” He added that delivering products same day is “magical,” but hard and expensive. But that same-day delivery would give Amazon the ability to “expand [Amazon’s] range of products.”

Reading that transcript, you just had the sense that same-day across multiple product categories was already on the roadmap. And that was four years before the acquisition of Whole Foods in 2017 made same-day grocery delivery a part of their retail portfolio.

Eleven years later, in 2024, Amazon reported that 60% of Prime members living in one of 60 major metropolitan areas received their packages the same or next day. They say that’s an increase of 50% year over year. Most of the products delivered  are from third-party sellers, who ride the logistics efficiency wave Amazon provides through its marketplace and Fulfillment by Amazon services. Amazon has invested billions over the years in building regional fulfillment centers, implementing robotics, using AI to predict shopping patterns and accordingly stocking inventory more accurately. In June of last year, a Truist analyst called out logistics as Amazon’s next $100 billion business.

Then there’s Uber. Its global ride hailing, delivery and freight carrier and brokerage capabilities make it more profitable than Lyft, which Uber doesn’t even think of as the competition. Uber is a logistics operation that innovates how any combination of people and packages move between Point A and Point B efficiently. Its focus as a logistics business is what drives its scale and new use cases.

Uber and Amazon are two obvious examples of the significance of investments in logistics, AI and transportation management systems to make their core businesses more efficient while silently disrupting the traditional players in the sectors where they do business.

The rise of ultra-efficient logistics will turn physical stores into relics for many product categories. As same-day delivery evolves into same-hour delivery, consumers will find fewer reasons to step into brick-and-mortar shops. We’re already seeing this trend in our data — globally, click-and-collect is losing its appeal, with shoppers opting for delivery or curbside pickup to avoid entering stores altogether.

Buy Online, Pick Up In Store may no longer be retail’s silver bullet, except maybe in grocery where it’s still hanging on. This failure will force retailers to completely rethink their value proposition. Stores can’t just be places to buy stuff anymore — they need to offer experiences, services or something truly unique to justify their existence.

Uber will use its investments in AI and self-driving tech to change the economics of moving people and products from Point A to B. It won’t be 2025, but it probably won’t take until the end of the decade before we see the integration of self-driving cars into its fleets. Once Uber doesn’t have to pay drivers and passengers don’t have to tip them, Uber’s business truly becomes a global logistics operation with a new economic model. Self-driving technology isn’t some far-off dream — it’s Uber’s next economic frontier.

Self-driving technology and mobility are also capturing VC dollars again. Those investments aren’t just about moving boxes faster. VCs are betting big on the entire ecosystem: AI-driven inventory management, predictive shipping, autonomous vehicles, you name it. They’re funding startups that are reimagining every aspect of how goods move between intended endpoints.

Then there are the vehicles themselves. Reducing the need for drivers changes how people use cars and how automobile manufacturers make them. They’ll be voice-activated and look different. They’ll make it possible for anyone who doesn’t want to or can’t drive to have the independence of getting anywhere they want without really getting behind the wheel. Those products will tap an entirely new market for vehicle sales. They will also silence regulators who have focused so much energy on the use of gig workers for ridesharing and delivery.

Logistics are the secret sauce that’s completely transforming how businesses operate and how consumers get what they want.

This suggests that the future of business will no longer be only about who has the best product. It’ll be about who has the smartest ecosystem that can move the right product to the right endpoint the quickest. For businesses, this means lower costs, happier customers and competitive advantages that were unimaginable a decade ago. For consumers, it means getting almost anything, almost anywhere, almost instantly.

And right now, the logistics innovators are writing that playbook.

5. Regulation Gets Rightsized

You have to wonder what Sam Bankman-Fried must be thinking right now.

A new crypto-friendly political administration promises to bring sexy back to the digital currencies that crashed and burned in 2022 — and hobbled the $32 billion firm he founded that same year.

We’re all quite familiar with the rags-to-riches story of FTX. How FTX robbed Peter (Alameda) to pay Paul (FTX). How that was done to hide the deepening hole of losses caused by the crypto winter. How that is what ultimately killed the Binance deal to buy them. And how that, ultimately, bankrupted the company over an 11-month period, and exposed the criminal co-mingling of funds that sent SBF  to prison for 25 years.

But what if crypto hadn’t crashed? Or had rebounded quickly? Or the Fed hadn’t raised interest rates so aggressively that the investors started running a million miles away from crypto? Would we be looking at an SBF crypto czar? SBF as a post-election fixture at Mar-a-Lago schmoozing with the newly elected President to advise on crypto policy?

It’s easy to forget now, but before he traded shorts and a T-shirt for an orange jumpsuit, SBF was a high-profile mover-and-shaker in political circles. He donated millions to political candidates and lobbied hard for more crypto-friendly policies.

But for that crypto winter, the egregious disregard for laws and regulations would have remained invisible to everyone but the FTX and Alameda teams. Several of whom testified under oath that they knew what they were doing was illegal and wrong. Their incentives as founders and startup entrepreneurs, giddy with the prospect of becoming billionaires, were at cross purposes with doing the right thing under the law.

Many executives and innovators believe that the Trump Administration will take a sledgehammer to the regulations they contend have hamstrung business and startup founders. The DOGE Committee says they plan to whack entire government agencies, consolidate others and shave trillions from the budget. With respect to our big little corner of the world, which is payments and financial services, DOGE says they will shut down the CFPB.

There probably are way too many regulations, and some of them should be pared back. They can make it hard for businesses, especially small and new ones, to grow and innovate. And who could possibly be against greater government efficiency?

Laws and regulations, however, are often necessary. Startup founders, for example, want to be billionaires — and are willing to move fast and break things to get there. Sometimes that leads to incredible products and services for consumers. In banking and financial services, however, they can break things that put the safety and soundness of our financial system at risk. And exposing all of us of the (remember the Great Recession?) to financial loss and job risk.  Look at Synapse and the 97 FinTechs and millions of customers who are still waiting for their money. Compliance is about the last thing startups want to spend money on, since their incentive is to acquire customers and find an exit at a gigantic multiple.

Laws and regulations are made to balance the promotion of healthy businesses and innovation with the protection of consumers and the economy more generally. Unfortunately, what has given rise to the DOGE committee and the groundswell of enthusiasm for dismantling regulation is the distortion of that equilibrium over the last eight years.

Regulators, and particularly the CFPB, have ignored the reality of business and the importance of incentives in how businesses work. When they make rules they say are in the best interest of the consumer, we often observe a downstream impact that is anything but.

The incoming administration’s approach to regulation is expected to create a more favorable environment for businesses, particularly small enterprises. This shift towards a pro-business stance isn’t just about cutting red tape; it’s about fostering an ecosystem where innovation and growth can thrive.

The new administration’s focus on reducing regulatory burdens could lead to a more dynamic business landscape. By streamlining regulations, businesses may find it easier to invest in new ventures, expand operations and create jobs. If anything, that will force a commitment to regulation that helps businesses to operate efficiently while still maintaining necessary protection for consumers.

That could lead to a healthy reset of regulation that balances the reality of business and business models, the wellbeing of the consumer and the healthy enforcement of rules when bad actors cross the line.

The hope, however, is that regulators will respect the difference between providers that align consumer and business incentives to deliver a compliant service and those who keep running the red lights hoping they’ll never get pulled over.

And that reformers will recognize that a lot of laws and regulations, when wisely and efficiently enforced, are a good thing.

The 2025 Starting Line

This year’s slate is a mix of topics aimed at how money is made, who is likely to find themselves marginalized, who could emerge as unlikely and even invisible forces to change the balance of power, and what buyers (consumers and businesses) value and are willing to pay (or switch providers) to get.

The common threads through them all: simplicity rules, time is an undervalued but highly valuable currency, and the biggest disruptors are hidden in plain sight. Mine is not the usual list of “predictions” that play it safe because they are already part of the present.

As you see, I resisted the urge to GenAI everything in these trends, even though that is the most transformational technology of our time. Its impact will change everything because it will soon be embedded in everything we do. But stay tuned.

In keeping with the under-the-radar theme, next week, I will dive into two of the most significant but unexpected impacts that AI will have on each of us in our personal and professional lives. I think you will be surprised.

I promise not to make it another five-thousand-word piece.