The Green Sheet Online Edition
December 12, 2025 • 25:12:02
2025 year in review: it was a happening year
Whenever a new administration takes charge of the federal government, businesses and individuals alike brace for changes. Couple that with ongoing innovations in commerce and payments – think artificial intelligence, digital payments, crypto payments – and it's clear 2025 was a year brimming with change.
CFPB gets its wings clipped
One of the first things the Trump Administration did upon assuming leadership was clip the wings of the Consumer Financial Protection Bureau. First, it threw out an interpretive ruling that subjected buy now, pay later companies to the same consumer protection regulations that apply to other lenders, like credit card companies.
BNPL providers' collective sigh of relief may be short lived, however. State governments have signaled a desire to regulate these companies. A multi-state coalition of attorneys general sent a letter to the six largest BNPL firms – Affirm, Block's Afterpay, Klarna, PayPal, Sezzle and Zip – expressing concerns about protections that are being provided to customers and underwriting practices.
Meanwhile BNPL is soaring. According to Adobe Analytics, consumers put $10.1 billion on BNPL plans between Nov. 1 and Dec. 1, 2025, a 9 percent increase over the same period in 2024.
But this growth has been accompanied by growth in late payments. While defaults remain low (2 to 3 percent, according to the Federal Reserve), 41 percent of BNPL users made late payments this year, compared to 34 percent last year, according to LendingTree. And BNPL loans are interest free only if paid in full in the requisite time frame, which can vary from six weeks to a year or more.
Big tech spared regulation
Congress quashed another CFPB rule giving the bureau supervisory oversight of Big Tech companies' payment apps. The rule would have applied to companies handling at least 50 million payments a year: Apple Pay, Google Pay, PayPal, Square and potentially X.
In January, X formed a partnership with Visa to power instant funding for its planned X Money peer-to-peer payment account. The plan is to enable consumers to fund their X wallets in real time using Visa Direct, with instant transfers to bank accounts via debit cards.
While Elon Musk, who heads up X, had planned for X Money to be up and running by now, the game plan was thrown into a state of flux largely due a complex web of necessary regulatory approvals (state money transmitter licenses, for example).
Also, X has been subject to scrutiny by the Federal Trade Commission over allegations of misuse of user data. Additionally, accoding to published reports, X experienced significant turnover among staff tasked with building the X Money infrastructure.
Zelle: the good and the bad
As for P2P payments, the CFPB sued Early Warning Services, the bank-owned operator of the P2P network Zelle, in ecember 2024 for failing to adequately protect consumers from fraud. But that lawsuit was droppe in March, with the bureau citing shifting priorities.
However, the New York Attorney General's office picked up the case, suing EWS for failing to protect consumers from being pilloried by massive frauds. The state claims an estimated $1 billion in fraud was lost by Zelle users between 2017 and 2023, and it blames EWS, asserting it developed Zelle without critical safety features. EWS refutes the charges, characterizing the lawsuit as "a political stunt to generate press, not progress."
Congressional Democrats also have been on the case, grilling executives of EWS and its owner banks, pressing them to adopt stronger anti-scam measures and to reimburse consumers defrauded via the network.
Meanwhile, a major outage on Zelle in May froze payments nationwide, disrupting transfers at major banks due to a Fiserv system failure. The outage spotlighted the fragility of digital payment systems.
Against this backdrop, EWS rolled out a new digital wallet for ecommerce: Paze. The Paze wallet, offered through financial institutions, leverages payment tokens for added security. In June, EWS announced it had partnered with Fiserv, which offers a turnkey solution for financial institutions wishing to offer Paze; it also can enable merchants to accept Paze at their checkouts.
Open banking rule gets yanked
Another CFPB action scrapped this year was its open banking rule. That rule was intended to give consumers more control over their financial data, such as directing the sharing of their account information with consumer-facing fintechs.
While the consumer watchdog agency is said to be working on a new open banking rule, JPMorgan Chase took advantage of the pause in regulation to ink deals in November with several large data aggregators that link banks with fintech apps that provide budgeting, payments and other financial services.
The deals' terms require the aggregators, Plaid, Yodlee, Morningstar and Akoya, to pay for account data they previously obtained for free, according to published reports.
Interchange remains hot topic
Interchange remains a bone of contention, with Visa and Mastercard on one side and merchants and Senator Richard Durbin, D-Ill., on the other.
In November, Visa and Mastercard released a proposed settlement, valued at about $38 billion, in the long-running legal battle with merchants over the cost of card acceptance. The proposal would scrap the honor-all-cards rule, lower the average effective interchange rate by 10 basis points for five years and offer more flexibility around surcharging.
But several leading merchant associations believe the settlement doesn't go far enough. So, it remains to be seen whether the judge overseeing the lawsuit will approve the proposed settlement.
In the meantime, Sen. Durbin continued to push his Credit Card Competition Act, which seeks to lower the cost of processing through competition. He wants card issuers to program credit cards to give merchants a choice between two competing processing networks, only one of which can be owned by Visa or Mastercard.
Instant payments gain momentum
Instant payments charted significant growth this year. The Clearing House reported that as of September its RTP network had cleared $1.3 trillion in payments this year – a 428 percent increase over the entire year of 2024.
FedNow, the Federal Reserve's instant payment network cleared 2.5 million payments in the third quarter valued at $307 billion, a 25 percent increase over the second quarter of this year.
Stablecoins gain traction
Stablecoins, cryptocurrencies pegged to assets like the dollar or gold, have captured the imagination of merchants, consumers, fintechs and lawmakers. The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act was signed into law in July, sparking a flurry of issuance activity.
The law creates a federal regulatory framework for stablecoins. For example, issuers are required to have 100 percent liquid reserves backing their stablecoins and provide regular disclosures. They are subject to a tiered system of licensing, strict KYC/AML rules and various consumer protections requirements.
The list of issuing companies and volume of stablecoins in circulation continues to grow. According to the World Economic Forum 12 billion stablecoins were in circulation in 2020; this year the total is expected to hit 208 billion. One new issuer is Fiserv, which issued its own U.S. dollar-backed stablecoin and entered into initiatives with several other companies including PayPal and Mastercard for issuance initiatives.
Agentic AI makes big waves
AI, especially agentic AI, hit warp speed this year. With agentic AI, bots can make decisions that help consumers find the shoes or other products they want at their ideal price point. Agentic AI is far more sophisticated than that example suggests, however. Leading payments companies, for example, are using the technology for risk vetting and merchant onboarding.
And major payments brands, like Visa, Mastercard and PayPal, are all-in with agentic AI. "Agentic commerce is more disruptive than anything we've seen in 30-plus years," Richard Crone of Crone Consulting LLC told The Green Sheet.
McKinsey & Co. explained in a report that agentic shifts AI from being a reactive helper to a proactive agent for shopping, payments and investing. And that has been playing out as consumers shop for the year-end holidays.
Salesforce reported that during the shopping period from Thanksgiving Day through Cyber Monday the share of global and U.S. online shopping traffic coming from third-party AI agent channels tripled compared to the same period last year.
Retailers with their own branded shopping agents saw three times greater online sales growth over the weekend than those that didn't (8 percent versus 2.6 percent), Salesforce reported.
But there is a downside to AI. A 2024 poll of consumers by the cloud security firm Upwind found 87 percent worry that AI is helping scammers. Fifty-five percent said their concerns about scams are growing. And Harris Poll found that 28 percent of Americans it surveyed had lost money as a result of an AI-related scam; better than one in five reported losing $5,000 or more.
One scam that is growing uses AI to impersonate someone close to a victim (an adult child, for example) who is in trouble and the only way out is for the victim to deposit cash into a crypto ATM. The funds then get transferred to the scammers digital wallet and can't be clawed back.
"As fraudsters' use of AI accelerates, the scope and scale of authorized payment scams edge close to a tipping point that threatens to upend the trust relationship across the whole financial system," said Trace Fooshee, strategic advisor at Datos Insights.
This year has seen a payments ecosystem transforming in high gear, regulators struggling to keep up, and trust, resilience and adaptability defining competitive advantage. 
Editorial Note: Patti Murphy is senior editor at The Green Sheet, president of ProScribes Ink (www.proscribes.net) and self-described payments maven of the fourth estate. Her Today in Payments reports are a regular feature of the Merchant Sales Podcast.
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