Payment Platforms Get Their AI Makeover

Changing consumer expectations, technology and competitive pressures are impacting the payments industry, Mark Smith, Head of Payments for Financial Services at AWS, writes in a new PYMNTS eBook, “Halftime 2025: Charting the Future of Payments.”

Mergers, acquisitions and spin-offs are transforming the 2025 payments industry, paralleling the strategic shifts of 2019. Building on this transformative wave, the industry continues its trajectory of strategic consolidation and technological evolution. As traditional financial institutions and FinTech companies seek to strengthen their competitive positions and expand their technological capabilities, strategic partnerships and acquisitions remain key drivers of innovation in payment experiences. This evolution reflects the industry’s ongoing response to changing consumer expectations, technological advancement and competitive pressures.

As these companies change direction and leadership structure post M&A, the new executive teams at restructured payment companies will reassess their core infrastructure, often built through decades of acquisitions. This strategic pause enables fundamental modernization of payment platforms.

Disruption of major established payment enterprises stems from a desire to compete more effectively with each other and with FinTechs. I believe many of the M&A drivers from 2019 continue to apply today. These include lowering cost structure, increasing security and resiliency, expanding geographically, fostering innovation, accelerating speed to market for new and innovative products and finding ways to work backwards from customers to create better payment experiences and products.

Many leaders who transition to new organizations bring firsthand experience of the capacity of AWS’s services to drive innovation and solve business challenges. When we see leaders and business units move to new areas, we are fortunate to have advocates and senior leaders who have seen how building in AWS can speed innovation and help companies overcome business challenges, which, in turn, accelerates the innovation flywheel.

In addition to a robust M&A environment, generative artificial intelligence (AI) and agentic AI represent another area of rapid movement and innovation in 2025. These topics truly come up in every conversation we have with customers. As such, my team has pivoted some of our focus for 2025 to accommodate our customers’ desire to test, learn and move fast when it comes to generative and agentic AI. Our solutions architects and industry leads are listening carefully to the questions and needs of customers from all over the world and from every facet of the payments industry to ensure we have the right accelerators. These accelerators include technical demonstrations, proofs of concept, reference architecture and more so customers can quickly see how AWS and AI can help them in many diverse use cases, including improving fraud prevention, building great customer experiences and transforming productivity. I’m hopeful that this period of renewed M&A will free up funding to accelerate testing and real-world use of generative AI and agentic AI.

From my perspective, the combination of industry consolidation and AI adoption is on track to set a solid foundation for transformative payment innovations in late 2025 and 2026.