We’re already halfway through 2025 - and it’s fair to say the UK fintech and payments landscape hasn’t sat still. At the start of the year, we highlighted several major themes to watch: embedded finance, regulations, ESG, open banking, AI, marketing, and retail payments. Six months on, those predictions have started to take shape in interesting ways.
In this mid-year check-in, we explore how those trends are progressing and where the second half of the year might be headed. From regulatory shakeups to consumer-led behaviour changes, here's a look at what’s driving momentum - and what’s holding attention - in the industry right now.
Embedded finance: Becoming the new normal
Embedded finance is no longer a concept reserved for future strategy decks - it’s firmly part of how financial services are being delivered today. In the UK, brands are expected to capture nearly £230 billion of Europe’s £619 billion embedded finance market over the next five years.
Across sectors, we’re seeing more financial services appear natively within non-financial platforms - from flexible payment options at checkout, to integrated insurance or budgeting tools. But more than convenience, what’s taking shape is a recalibration of trust: consumers want seamless journeys, but they also want reassurance, flexibility, and value. Businesses that deliver both are gaining traction.
With open APIs, smarter customer data, and rising demand for value-added services, embedded finance is no longer optional - it’s becoming a baseline.
Virtual cards: From niche to necessity
At the start of the year, virtual cards were already gaining traction - especially in B2B settings. Now, midway through 2025, that momentum has only grown. Businesses across the UK and Europe are embracing virtual cards as a secure, flexible, and efficient alternative to traditional payment methods, particularly when it comes to controlling spend, automating reconciliation, and reducing fraud exposure.
Recent data shows that the European virtual card market is projected to grow by over 20% annually, with B2B use cases accounting for the majority of that growth.
In sectors like procurement, travel, and logistics, virtual cards are now central to digitisation strategies - not just a stopgap or add-on.
What’s also changing is how virtual cards are being understood. No longer seen as just another prepaid option, they’re now being framed as strategic tools for spend control, operational efficiency, and data transparency. But there’s still room to grow- particularly when it comes to education and cross-market collaboration.
Looking ahead to the remainder of the year, virtual cards, particularly for B2B payments, are poised to remain a dominant payment method, driven by businesses’ need to streamline operations and simplify reconciliation.
However, greater education is still needed to highlight their benefits and explain why they can be a superior alternative to Account-to-Account payments. More cross-collaboration across international markets can help to further accelerate adoption and innovation.
Vrush Sumanoharan
Product Marketing Manager
Edenred Payment Solutions
As businesses continue to prioritise control, traceability, and integration, virtual cards are evolving from convenience to cornerstone - playing a vital role in modernising the way payments work behind the scenes.
Regulation tightens: What's changed and why it matters
It’s been a busy year for regulation in the UK, particularly in payments and lending. The government has drawn up clear plans for the long-anticipated BNPL regulation, introducing affordability checks, clearer communications, and access to the Financial Ombudsman. This marks a key moment - elevating consumer protection and tightening standards across the board.
The government is also progressing with plans to merge the Payment Systems Regulator (PSR) into the FCA, aiming to streamline oversight and improve efficiency.
Across the EU, the revived Financial Data Access (FiDA) proposal has re-entered trilogue discussions after a shaky start to the year. As part of the EU’s Data Strategy 2030, FiDA aims to expand access to financial data across member states and build on open banking progress - but concerns remain around implementation complexity, scope, and competitive fairness. Still, the industry is bracing for the significant technical demands likely to follow, regardless of the final form the legislation takes.
All of this signals a clear shift: regulation is no longer just a box-ticking exercise. It’s becoming central to user experience, innovation, and industry trust.
After a rocky start which threatened to see EU Financial Data Access (FiDA) legislation scrapped from the EU’s 2025 agenda, it’s back on the menu with several trilogue meetings happening in H1 2025. As part of the EU Data Strategy 2030, the proposals aim to revolutionise financial data accessibility across EU member states and foster further recent open banking developments in the payment services.
Still, we are seeing trade associations lobbying EU institutions to further take into account legitimate industry concerns over scope and complexity, lack of clear monetisation models and non-European players gaining further market access. Regardless, FiDA is almost certainly going to require significant tech build whatever shape the end version looks like.
Gwenael Bouleau
Head of Compliance
Edenred Payment Solutions
ESG and fintech: From strategy to real-world impact
Sustainability isn’t just a corporate responsibility topic anymore - t’s become a defining expectation from customers, investors, and regulators alike. Fintech firms in the UK are actively building ESG considerations into their operations, whether through carbon impact tracking, responsible investment screening, or green financing models.
There’s also growing pressure to address financial inclusion, especially among underserved groups like SMEs and women-led businesses, who still face barriers to credit and funding.
What’s notable in 2025 is that ESG has matured beyond reporting - it’s influencing product design, data strategies, and partnership models. Organisations are starting to measure success not just by growth, but by positive impact.
Open banking is gaining ground: Open finance is next
Open banking adoption continues to grow at pace in the UK. As of March 2025, there are over 13.3 million active users, and more than 31 million payments were made using open banking that month alone - roughly 8% of all Faster Payments in the UK.
One particularly promising area is Variable Recurring Payments (VRPs), which now account for 13% of open banking transactions. These “smarter” alternatives to direct debits are being used for subscriptions, bill payments, and even real-time salary access.
Looking forward, open finance is the next logical step - one that will expand access to data and services across broader financial verticals. The UK is at the forefront of this movement, with 2025 laying the groundwork for adoption at scale.
AI in fintech: Smarter, faster, and more human than ever
AI is now powering both back-office transformation and customer-facing experiences. In fintech, generative AI is enabling rapid data analysis, smarter fraud detection, and better customer service interactions.
We're seeing greater adoption of AI in areas like onboarding, where natural language models can help customers understand products or navigate compliance. Fraud systems are using machine learning to spot threats in real-time. And marketing teams are applying AI tools to optimise campaigns and content in ways that were previously too time-consuming or costly.
What’s clear is that AI isn’t replacing human-led service - it’s complementing it, making financial journeys faster, safer, and more personal.
Fintech marketing: Building trust in a crowded market
As competition intensifies, fintech marketing in 2025 is leaning into clarity, credibility, and connection. Flashy slogans are out; meaningful, trust-building content is in.
UK consumers are increasingly focused on security, ethics, and value. According to research by Deloitte, 55% of consumers say security and fraud prevention features directly influence their brand loyalty decisions. This means that marketers are being tasked with communicating not just what a product does, but how it protects, supports, and empowers them.
Fintech marketing fundamentals haven’t changed - but the expectations have risen. Now more than ever, marketers need to step into a leadership role: not just promoting, but contributing to the conversation in meaningful ways.
That means developing our own expertise, bringing fresh insights about the people we serve, and shaping how the industry evolves to meet users’ expectations. It’s about using marketing to support the business strategically, while driving real impact for consumers.
Raquel Soares
Head of Marketing
Edenred Payment Solutions
Retail payments: Loyalty, pressure, and consumer power
Retail has faced serious turbulence in 2025. From the cyberattacks that impacted household names, to persistent inflation and rising operating costs, retailers are under pressure to do more with less.
What’s particularly interesting this year is where optimisation is happening. It's less about flashy new payment tech, and more about fortifying supply chains, tightening cybersecurity, and improving customer loyalty propositions.
Yet even amid this defensive stance, consumer payment behaviour is evolving. People are stacking rewards, chasing cashback, and using loyalty-driven promotions to stretch their money further. These behaviours aren’t just survival tactics - they’re shaping new expectations around value.
Retail is in a preservation phase right now. With rising costs and lower disposable income, retailers are optimising their customer propositions and focusing heavily on loyalty.
Payment innovation may be taking a back seat, but consumers are driving the agenda - leveraging rewards, stacking cashback, and stretching their spend. There’s real opportunity here to push value back to the customer and build lasting relationships.
Alec Donald
Retail Vertical Lead
Edenred Payment Solutions
For retailers, the challenge is clear: retain trust, enhance value, and deliver frictionless experiences - without overextending.
Final thoughts
The first half of 2025 has been shaped by steady progress, rising expectations, and a push for smarter, safer, and more responsible financial services. From open finance and BNPL reform, to embedded journeys and AI-led efficiency, this year is showing that the UK fintech sector is still evolving - with purpose.
In the months ahead, the focus will likely remain on value creation: not just for end users, but across the ecosystem. That means scalable compliance, impactful sustainability, meaningful partnerships - and ultimately, delivering on the promise of a more inclusive, intuitive financial future.
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