Quick takes: Things that caught our eye this week

This week, we're highlighting two sets of predictions for 2025, one from a technology research and consulting firm and another from a payments industry CEO; a new collaboration between long-time Chinese rivals; and a Chinese platform seeking to do business with U.S. retailers.

Forrester offers predictions for 2025

Research and consulting firm Forrester's new report predicts a significant global decline in cash usage, with a 40 percent drop expected in 2025. Although the United States remains somewhat reliant on cash, real-time payments are gaining traction domestically, reducing check and ACH use for B2B transactions, researchers stated.

The report also forecasts an increase in mergers and acquisitions among B2B payment providers, with companies like Coupa, Basware, and Esker potentially leading the charge. In addition, rising consumer demands for one-click checkout will increase merchant costs by 30 percent, as businesses will need to accommodate flexible payment, order and shipping adjustments. Forrester anticipates a backlash against deceptive subscription renewal practices, which could lead to one-third of subscription-based companies shutting down. Issuers and networks may step in to help consumers manage subscriptions and address disputes.

The report highlights that while the United States lags in digital payment adoption compared to such countries as nearly cashless Norway and Sweden, growing real-time payment networks, such as FedNow, are promoting cash reduction. Furthermore, alternative payment rails, including cryptocurrency, are likely to see increased adoption in response to geopolitical tensions, pushing companies to evaluate the benefits and risks of these systems.

PayJunction CEO looks ahead to 2025

Randy Modos, co-founder and president of PayJunction, sent us his thoughts on the state of the payments industry, in particular surcharging, AI and consolidation, in 2025.

Regarding surcharging, Modos wrote, “In 2025, with continued increases in credit card processing fees, surcharging will become more common as a way for businesses to offset costs. As businesses look for ways to protect margins in a high-fee environment, surcharging will play a critical role in maintaining profitability while offering customers a choice of payment methods.

"However, in 2025, businesses will face stricter regulations around data privacy and security. Businesses must be mindful of evolving legal standards, which can differ from state to state, when implementing surcharges. Additionally, as businesses across industries increasingly adopt subscription services, having efficient recurring billing options will be crucial. These companies will also be looking for solutions that add the ability to apply surcharges to credit card transactions, reducing the impact of processing fees for businesses operating subscription models."

When it comes to AI in payments, he stated, "While AI and automation have played roles in fraud detection and personalization in 2024, we’ll see a broader integration in transaction analytics, predictive payment systems, and workflow automation. AI might enable businesses to anticipate payment issues or optimize transaction times, leading to more proactive payment management and costs."

Modos also considered consolidation as we move ahead, stating that as industries like veterinary care, healthcare and automotive continue to consolidate in 2025, streamlining operations will be key to maintaining profitability. "As businesses consolidate, they often face challenges integrating multiple systems," he said. "Consolidated organizations will be looking for solutions that not only reduce overhead, compliance, and costs but also provide more transparent insights into payment data, enhancing decision-making across the organization.

"Additionally, maintaining compliance across multiple locations and jurisdictions becomes a critical concern for consolidated businesses. Organizations will have to ensure payment workflows—whether through surcharging or data handling—remain compliant with local and federal regulations. Consolidated businesses in particular should focus on leveraging automations and integrations to drive operational efficiency and improve overall customer experiences in 2025."

Long-time Chinese ecommerece rivals team up

JD.com, a Chinese ecommerce platform, integrated Alipay—China’s largest mobile wallet by Ant Group, Alibaba's fintech affiliate. This marks continuing collaboration between long-time rivals JD.com and Alibaba. This partnership follows JD.com's recent logistics deal with Alibaba’s Cainiao, allowing JD.com’s third-party merchants access to Cainiao’s courier services. In the next month, Cainiao will also provide shipping, delivery, and installation for larger items like furniture on JD.com. JD.com’s logistics services already expanded to Alibaba’s Taobao and Tmall marketplaces, enhancing delivery options on those platforms.

Observers have said these developments indicate the breakdown of "walled gardens" in China's tech industry, where companies historically operated in isolated ecosystems. Beijing’s 2021 regulatory push against monopolistic practices spurred greater interconnectivity, leading to collaborations like these. Tencent, for example, similarly opened its WeChat platform, allowing users to shop on Taobao directly, highlighting a new era of openness among China’s tech giants as they respond to government calls for a more integrated digital ecosystem.

AliExpressDirect wants to work with U.S. retailers

In another Alibaba-related development, AliExpress launched AliExpressDirect, an effort welcoming U.S.-based retailers to its platform with 0 percent commission and no onboarding fees during an introductory period. This initiative provides American sellers access to AliExpress’ vast customer base, marketing support and comprehensive customer service, including assistance with inquiries and after-sales issues at no cost, AliExpress stated. Sellers can easily establish online shops using streamlined tools for product listings, pricing, and store management, while API integration planned for 2025 will enable smooth omnichannel functionality, the companyadded.

AliExpress said it has already onboarded U.S. retailers, including The PCA Companies, Cre8Travel, and JemJem, all of whom have reported early successes. These businesses, specializing in beauty products, culturally themed items and refurbished electronics, have noted benefits such as expanded consumer reach, accelerated growth, and enhanced visibility within the U.S. market, AliExpress stated, adding that U.S. consumers can now access a wider range of products from local sellers, benefiting from faster delivery and returns, shorter shipping times, and better customer support.

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