Payment execs predict an AI rush

Joey Pizzolato/American Banker

SAN FRANCISCO – Payments executives are ready to pour funds into hot areas such as artificial intelligence and data sharing as consumers and businesses develop strategies for generative AI and embedded finance.

That's according to new research from Arizent – American Banker's parent company – unveiled at the Payments Forum in San Francisco Wednesday. The survey, which was conducted between January and February 2025, surveyed 100 bank, credit union and payments employees. 

Payments-specific technology spend is also expected to increase this year, with AI spending seeing the largest boost, according to the research. 

Ninety percent of respondents said they expected to increase AI-specific tech spend when compared with 2024, with 22% of those saying they were increasing AI spend by more than 20%. 

AI is expected to be a game changer for payments companies, said Molly Hugar, SVP and payments lead advisor at KeyBank. 

"There's a number of different use cases ... starting with small problems," Hugar said. "For example, all of the paperwork that's out there. Where do we want to spend people's time? It's analyzing the results and not aggregating the information." 

Embedded payments are also a priority for a majority of payment companies in 2025, according to the research. More than half – 55% – of respondents said they already offer or are piloting the new payment form, with another 25% saying they were planning to offer it. Only 4% said they had no interest. 

Bolstering its embedded payment options is a priority for KeyBank, Hugar said. "Where we're seeing the biggest demand from our customers is the customers that have a retail customer base." 

Meanwhile, changing consumer habits and managing security risks were the top drivers for payment investments in 2025, according to the research. Only 33% said they were investing in their payments franchise in response to threats from rivals or fintechs. 

Executives are also projecting higher overall payment activity. Sixty-one percent of respondents said they expected at least a 10% year-over-year increase in total dollar volume of U.S. transactions, according to the research. Of those respondents, 18% said they expected "significant growth" over 20%, and 45% said they expected "moderate growth" between 10% and 19%. 

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On a transactional basis, 45% of respondents said they expected growth of at least 10%, with 32% expecting that growth to come in between 10% and 19%, and 13% expecting more than 20% growth. 

The ISO 20022 migration is expected to serve as both a headwind and a tailwind for that growth, said Tiffany Patrick, director of global AML payments and innovation at Citi.

"What I look at from a compliance perspective and enabling the growth of the business responsibly, I think the uplift to ISO 20022 for data requirements is an opportunity and hurdle at the same time because everybody has to get there," Patrick said at the conference. "But once it's there, you have more consistent, federated data, you have faster payments, but you also have more transparent payments."