For Payment Service Providers (PSPs) to succeed in 2025, a clear strategy is needed. The money movers that win will be those who stay agile and prepare for future turbulence.
There are challenges though. The sector, once a goldmine for funding, has seen a huge decrease in opportunities. Many startups who were tipped for big things have had a rough couple of years as they wrestle with changes in regulation and a race to the bottom.
For cross border payment providers, major world events and geo-political tensions can throw an unwelcome spanner in the works if you’re not prepared. Regulations change to better serve the customer but don’t always appear to have everyone in the ecosystem in mind. Those driving the changes have been strongly criticised.
According to a 2025 report from The Payments Association, key concerns for payments executives include regulatory compliance, understanding customer needs and keeping up with digital transformation. By extension, that includes the advance of AI.
Consolidation in the market is one response to the uncertainty. Another response could be a sharpened focus on one area of service, as in the case of Global Payments buying Worldpay from FIS. But for any company operating in tumultuous markets, a sensible approach is needed.
What we're seeing
To succeed as a PSP in this space, we’ve identified four key areas to consider. IFX’s Ciaran Pennington, Sara Cass, Adam Dowling, and Will Marwick all bring a range of experience to the table from years of expertise in the industry. They share their perspectives here.
Pennington points out the importance of issue resolution and a high level of service. Cass stresses the need for stress-testing and stability in a time of volatility, something that has proven more prescient recently. Dowling talks about access to banking in a highly regulated space and Marwick discusses the need for agility to deliver a truly scalable proposition.
Find out more below.
The importance of service and issue resolution
When it comes to payments, a clear way of standing out is the level of support you’re able to provide.
Payment revisions and issue resolution are an essential part of the PSPs offering. This could involve anything from addressing incorrect account numbers to resolving compliance issues that have resulted in a transaction being paused.
According to the Executive Director of Payments at the Bank of England, Victoria Cleland, cross-border payments are typically slower, less transparent and more costly than domestic payments sometimes taking up to 10 days and costing 10% of the payment value. In 2024, according to the Financial Stability Board, the share of Swift payments crediting funds within an hour and within one business day decreased by 3.2% and 0.7% respectively. This is partly due to technology upgrades and interoperability challenges surrounding the ongoing adoption of ISO 20022. As more people migrate to the new standard by the deadline of November 2025, this should improve.
Of course, delayed or flagged payments can create costly disruptions for businesses and potentially damage client relationships. If a PSP is handling hundreds of thousands of payments a month, it’s essential they act quickly if something does go wrong, to maintain business continuity and client trust.
Every hour a payment stays in limbo means potential revenue loss, frustrated customers, and unnecessary stress for your team. If you’re relying on third party infrastructure you will want to pick up the phone.
"PSPs relying on existing infrastructure need their service providers to deliver rapid, clear and expert revision of payments so they don't have to explain any delays to clients in turn," explains Ciaran Pennington, IFX’s Head of Retention.
"Having dedicated support teams across the platform and by phone, dedicated relationship managers, and separate compliance teams is essential. IFX also uses technology to support accuracy and speed to interpret payment supporting documentation."
With cross-border payments undergoing complex changes and increasing demands, having a partner who prioritizes swift resolution is more likely to give your business the edge it needs in a competitive market.
Building trust and stability through stress testing
In 2025, you can’t always see what’s coming round the corner. Market volatility, caused by unstable geopolitical tensions and the actions of a US president turning the world trade order upside down, will have hit some firms harder than others and caused some to pull back on their public offerings.
These events have also shown that stress testing is a vital component of running a PSP. You can’t tackle the markets without being sufficiently prepared for whatever may come along. At its core, this involves assessing how your business will withstand severe economic pressures. In other words, it's a financial fire drill that measures your ability to navigate through worst-case scenarios.
For PSPs specifically, these tests reveal how well your payment processing systems, capital structures, and risk profiles would perform under extreme conditions.
As IFX Chief Compliance Officer, Sara Cass noted, "Recent events have again highlighted the need to conduct frequent stress testing in volatile markets. Firms need to have contingency funding in place to cover all eventualities. The geo-political environment continues to pose challenges to all industries. Ensuring the lines of defence are operating effectively is even more important."
Of course, regulators require stress tests to protect the wider financial system, but they also deliver three core benefits to your institution:
- Risk Identification – Uncover hidden vulnerabilities before they become problems.
- Strategic Planning – Make informed decisions about capital and risk appetite.
- Confidence Building – Demonstrate financial strength to stakeholders and giving your clients confidence that their payments are in safe hands.
Consider Concentration Risk
Cass also added: "Stress testing for shocks is important, but concentration risk should also be a focus. It's a good time to review wind down plans, scenario testing and key responsibilities."
Concentration risk is having too many of your assets or exposures focused in one area. This can include an over-reliance on a few major customers, excessive exposure to specific regions and dependence on limited technology vendors.
To tackle this effectively, PSPs need to focus on their specific risk profile rather than generic scenarios. Practically this means testing your ability to maintain liquidity during market disruptions and assessing how regulatory changes might impact your business model. The resilience of your technology infrastructure should also be tested alongside planning for multiple simultaneous challenges.
Providing access to banking infrastructure
For IFX COO Adam Dowling, a major hurdle for PSPs today is securing reliable access to banking infrastructure. The threat of fraud has made many traditional institutions increasingly cautious about who they service, leading to an increase in "de-banking" across the fintech sector.
A 2024 FCA report indicated that a substantial number of payment firms experienced disruptions to their banking relationships. Certain organisations and individuals also found it difficult to obtain or maintain a payment account. The report also found that reasons for this blockage were often unclear or insufficient. In response to this trend, new rules will be in place from 2026 that will require banks to give customers 90 days’ notice before closing accounts and provide clear explanation for why.
For smaller PSPs and emerging players, the risk of debanking presents an existential threat. Without stable banking relationships, processing transactions, holding funds, or facilitating currency exchange is so much more difficult. This renders their business models inoperable and leaves the trust they’ve built with clients on thin ice. Even established PSPs now allocate substantial resources to maintaining banking relationships that were once considered standard operational infrastructure.
Dowling outlines the situation: "A major barrier to growth in the financial intermediary market is the lack of access to banking/payments/FX and the fact the original disrupters are struggling with the ever-changing regulatory landscape – creating a new barrier to entry, and a high cost to serve. With the risk of being de-banked and falling behind in compliance, a partner that can deliver access to banking infrastructure is essential.”
For businesses operating in this space, stability now comes from choosing partners with established banking relationships and proven compliance frameworks. The days of cobbling together multiple service providers are ending. What's needed is comprehensive solutions that shield PSPs from banking sector turbulence while ensuring regulatory requirements are met.
Staying agile for scalability
What’s clear is the payments industry never stands still. Client expectations evolve, regulations shift, and technological advances create new opportunities daily. For PSPs and EMIs, your ability to adapt quickly determines whether you thrive or merely survive.
Agility isn't just a buzzword – it's a business imperative. The most successful PSPs build their infrastructure with scalability in mind from day one. This helps them expand operations smoothly as their client base grows.
Will Marwick, CEO of IFX Payments has some thoughts. "As your PSP/EMI business grows, there is an increasing need to partner with an agile and responsive API provider. This delivers quick and easy integration to ensure your operations are secure, robust and scalable."
Scaling into new markets and adding additional services introduces new variables so without the right foundation, bottlenecks can form.
APIs (Application Programming Interfaces) offer the solution. They provide standardised connection points between your systems and external services, allowing you to add new capabilities without rebuilding your core infrastructure.
Marwick adds: "Being able to scale quickly is vital in a competitive environment like payments. APIs can create room for growth, allowing you to respond to changes in the market and add new capabilities to serve an expanding client base."
When the time comes to scale, you want the ride to be as smooth as possible. The right payment partner should bring technical capability as well as expertise in navigating regulatory requirements across multiple jurisdictions.
A partner for PSPs today
Given our focus on compliance, our API, our service led approach and the established relationships we have with banking infrastructure, IFX Payments is the ideal partner for PSPs and FIs in today’s market.
You can speak to us today to find out more or meet us in person at Money20/20 Europe.
The information provided in this article is for informational purposes only and does not constitute financial advice. While the content is based on information believed to be accurate at the time of publication, no guarantee is provided. Links to third-party websites are included for convenience only, and IFX Payments holds no responsibility for the content, services, products, or materials on those sites.
