As the end of 2025 approaches, the payments industry is entering a new phase: execution at scale. The past few months have brought major milestones, including the formal completion of ISO 20022 migration for Fedwire, notable surges in same-day transaction volumes, and sweeping legislation such as the OBBBA and GENIUS Act that now mandate speed, intelligence, and inclusivity in US financial infrastructure. But with these changes now codified, the focus shifts from preparation to performance.
For financial institutions, this means the second half of the year is not a pause; it is a proving ground. Those who have invested strategically are already unlocking richer data, faster settlement, and better compliance. Those who haven’t face a narrowing window to catch up.
ISO 20022: A line in the sand
The recent Fedwire switchover marks the latest chapter in the ISO 20022 story, but not the end. The Fedwire Funds Service officially completed its migration to ISO 20022 in July 2025, aligning US high-value payments with global messaging standards. Many institutions technically met the mandate but did so by relying on translation layers that convert messages to and from legacy formats. While expedient, these workarounds limit the ability to tap into ISO’s primary benefit: enriched data that improves traceability, personalisation, fraud detection, and compliance reporting.
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Additionally, the US isn’t stopping with format conversion. Future enforcement is expected to include extended ISO data usage, meaning institutions that opted for quick fixes will soon revisit those decisions, only under tighter timelines and higher scrutiny. Banks that planned strategically are already seeing the payoff: higher STP rates, smoother downstream processing, and fewer manual interventions. Those who didn’t will spend the back half of 2025 compensating for short-term thinking.
ISO 20022 as a strategic differentiator
With Fedwire’s migration this summer, the US joined global high-value wire payment networks such as TARGET2 and SWIFT in adopting ISO 20022. This brings US wholesale payments into closer alignment with international standards. While many banks met the mandate, some did so through translation layers that keep legacy formats in place. These shortcuts provide compliance, but they also limit ISO’s full advantages—richer data for fraud prevention, liquidity management, and tailored customer services.
That additional context supports predictive intelligence, not just regulatory reporting. The European experience underscores this dynamic, with many institutions beginning with minimum-compliance approaches, only to find themselves forced to reinvest later as ISO matured into a differentiator. The same shift is now underway in the US. By year’s end, institutions treating ISO as a strategic asset, not just a requirement, will see higher straight-through processing rates, fewer manual interventions, and stronger analytics.
Instant payments reach critical mass
Instant payments have become essential infrastructure rather than optional innovation. In 2024, the RTP network handled 343 million transactions worth $246bn, up 38% year over year. Still, access is uneven: nearly three-quarters of large banks offer real-time capabilities, compared to less than half of smaller institutions.
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By GlobalDataThe next competitive edge lies in multi-rail orchestration—seamlessly connecting ACH, wires, RTP, FedNow, and cross-border systems. Corporate finance teams increasingly expect real-time liquidity views, just-in-time payroll, and automated settlements. Banks that integrate these rails through cloud-native platforms and smart routing will gain relevance and share, while laggards risk operational bottlenecks and loss of ground.
The GENIUS Act raises the stakes
Signed into law earlier this year, the GENIUS Act accelerates the modernisation mandate. It requires that US payment systems not only move faster, but also become programmable, inclusive, and resilient across both public and private networks.
This law is more than compliance; it is a forcing function. API standardisation, interoperable architecture, and digital rail support are no longer strategic ambitions; they are baseline requirements. Institutions that internalise this shift as an innovation opportunity, rather than a regulatory burden, will outpace peers heading into 2026.
Embedded finance: Quietly reshaping customer experience
Embedded finance has quietly transitioned from “nice-to-have” to essential. Payment initiation, financing, reconciliation, and fraud protection are embedded into ERP systems, SaaS platforms, and e-commerce channels.
This trend is especially visible in B2B procurement, where embedded lending and instant settlement are replacing paper checks and manual transfers. For banks, embedded finance offers new revenue streams and deeper client stickiness—provided they can integrate seamlessly into non-financial ecosystems. Those who succeed will be invisible yet indispensable.
AI’s role: From fraud detection to orchestration
AI is already indispensable for fraud mitigation, particularly in instant payments where irrevocability heightens risk. In 2024, fraudulent transfers cost US consumers $2.09 billion, the single most expensive fraud category reported to the FTC. But AI’s true impact will extend further. By 2030, payment flows will be AI-orchestrated, from transaction initiation to settlement. Some banks are already training proprietary AI models on institutional data, enabling adaptive compliance and risk analytics. Others are embedding AI into routing and liquidity workflows. The winners will be those that invest today in the infrastructure and data quality required to scale these models tomorrow.
The rest of the decade won’t wait
The foundations are in place: ISO-native messaging, modern rails, regulatory momentum, and AI. If these elements mature as expected, the second half of the decade will look very different from today:
- Business payments will match consumer simplicity: Just as consumers expect one-click or invisible checkout, companies will demand the same automation for payroll, treasury, and supply chain flows.
- Payments will fade into the background of experiences: AI and agents will turn transactions into organic, invisible actions.
- The cost of payments will approach zero: Margins will shift away from the transaction itself, with FIs prioritising revenues from services around the payment.
- Data will become the most important aspect of a payment. ISO-native data, enhanced by AI, will carry more value than the transaction itself, powering personalisation, compliance, and predictive intelligence for businesses and consumers alike.
The second half of 2025 is not a breather. It is the beginning of the next big push. Institutions that modernise deliberately and aggressively today will define the payments landscape by 2030.
Deepak Gupta is EVP of Engineering, Product, and Services, at Volante Technologies.
