What Merchants Need to Know in 2025: Expert Tips and Insights

As we step into 2025, merchants are poised to navigate an ever-changing landscape shaped by economic shifts, technological advancements, new or enhanced regulations, and evolving consumer behaviors. Staying ahead in the fast-paced payments industry requires preparation and a clear understanding of the trends and strategies that will define success in the coming year. At StreamPayments, we’ve sourced insights directly from our company’s leadership team—veterans of the payments industry who are on top of everything new and on the horizon. These insights reflect expertise from our CEO, heads of compliance, underwriting, risk, and business intelligence, ensuring you’re equipped with the best guidance.

Whether you’re looking to adapt to new regulations, leverage innovative technology, or enhance your risk management practices, these insights will position your business for growth and resilience. Let’s dive into what you need to know:

What Merchants Need to Know in 2025: Predictions from our CEO

1. Fierce Competition Among Service Providers

• Competition between service providers will continue to be fierce with an emphasis on beating competitors to market with new products and services.

2. Regulatory Shifts in Europe

• Regulation in Europe will continue making an impact on the acquiring landscape which will encourage rethinking of the current risk appetite.

3. Industry Consolidation

• Consolidation of payment service providers and acquirers will continue with even more mergers and acquisitions on the way.

4. AI-Driven Market Disruption

• AI-driven consumer products and services will keep entering the marketplace, continuously pushing acquirers and PSPs to adapt to the new realities of onboarding this type of (AI) business, especially those that will be start-ups.

What Merchants Need to Know in 2025: Underwriting

1. Online ID Verification

• Merchants must embrace online ID verification to meet stringent regulatory requirements, prevent fraud, and streamline onboarding processes.

2. Transparency in Source of Wealth (SoW) and Source of Funds (SoF)

• Merchants must meet compliance standards by providing proof of Source of Wealth (SoW) and Source of Funds (SoF), ensuring transparency and trust while preventing fraud and money laundering.

3. Accurate Fraud and Chargeback Reporting

• Merchants must provide transparent data on fraud and chargebacks to comply with evolving card scheme rules and maintain account stability.

What Merchants Need to Know in 2025: Compliance

1. Regulatory Focus on Financial Crime and Cybersecurity

• The year 2025 will be another regulatory intensive year with a key focus on combating financial crime, enhancing consumer protection and strengthening cybersecurity across all industries and sectors.

2. Proactive Compliance Management

• To navigate the ever-evolving regulatory landscape, it’s crucial that businesses move from reactive to proactive approach in managing compliance.

3. PSD3 and PSR Updates

• The Third Payment Services Directive (PSD3) and the new Payment Services Regulation (PSR) will clarify the rules for application of SCA in the case of recurring and Mail Order Telephone Order (MOTO) transactions. An eight-week unconditional refund right is introduced for recurring transactions.

4. Streamlined PCI DSS Reporting

• In April 2024 Visa introduced new streamlined PCI DSS Compliance Reporting requirements, eliminating the collection of all individual PCI DSS documentation and focusing on non-compliant merchant cases. Although many acquirers haven’t yet adopted this new approach, it’s expected to reduce the compliance burden on merchants, especially on those using payment pages hosted by PCI DSS-Level 1 payment gateway providers.

What Merchants Need to Know in 2025: Risk

1. Visa’s Fraud and Dispute Metrics

• Merchants should know that Visa will transition to a new fraud and dispute monitoring framework based on transaction counts. This approach combines fraud report counts (using TC40 data) with non-fraud chargeback counts, excluding disputes resolved through tools like Rapid Dispute Resolution. The updated metrics aim to ensure accountability across all merchants, regardless of size, while shaping acquirer performance and fostering improved fraud and dispute management strategies. 

2. Mastercard’s Fraud Classifications

• Merchants should know that issuers have already started adopting Mastercard's new fraud classifications. As a result, a merchant might receive both a SAFE fraud notification with Reason Code 56 and a chargeback with the non-fraudulent Reason Code 4853 for the same transaction. Addressing these dual classifications effectively will be essential for streamlined fraud and dispute management.

3. AI and Cross-Border Payments

• Merchants should know that the new requirements under PSD3 and the G20 Roadmap for Enhancing Cross-Border Payments focus on making international payments faster, more accessible, and secure while ensuring regulatory compliance and data security. AI and machine learning solutions will be pivotal in ensuring fraud detection and risk management as transaction volumes increase, particularly for low-value transactions where fraud risks are more challenging to detect.

Final Thoughts

The payments industry in 2025 will be shaped by innovation, regulatory evolution, and the need for merchants to stay adaptable and informed. By leveraging these insights and focusing on trust, transparency, and service excellence, you can position your business for success in the face of these exciting changes.

At StreamPayments, we’re committed to supporting our merchants with cutting-edge solutions and empathetic service as we navigate this transformative year together. Here’s to a successful 2025!