Season 7, Post 3: The way we spend now*
January is often a month of more frugal living after the excesses of the festive December period, but we’re still spending. How we do this continues to change. Talk to any major business in the payments ecosystem, and their mantra is all about reducing friction, making it as easy and secure as possible to pay. Your author was privileged to visit Mastercard’s experience centres in both London and New York last year (the former profiled here) to see innovation in action. Below are three trends we think are important to watch in 2025.
All of us will likely be familiar with contactless payments. These already account for two out of three in-person payments. But there’s more to the tech than a shopper simply tapping their card or phone in store. Imagine the potential if any device could become a payment acceptance terminal. This would democratise acceptance for merchants, especially smaller ones, reducing the need for complex checkout infrastructure and shortening waiting times. With innovations such as Mastercard’s Tap on Phone technology, it’s already possible. Expect more use cases to emerge.
2025 may be the year when blockchain and digital asset come of age. Beyond the abundant support from the new White House incumbent, the reality is that cryptocurrencies, stablecoins and other tokenised assets have already moved from concept to commercialisation. Over $1bn of transactions were processed by JPMorgan Chase over its Kinexys real-time settlement blockchain platform in 2024. This year should technological innovation to accelerate the speed, security and efficiency of digital currency payments.
No Blog piece would be complete without reference to AI. In the world of payments, its clearest application could be in outsmarting fraudsters. Cybercrime costs will likely top $10tr in 2025, a greater than 3x increase relative to a decade prior. The good news is that tools such as Mastercard’s Decision Intelligence Pro are using generative AI to scan 1 trillion data points to predict in less than 50 milliseconds to assess how genuine a transaction may be. This can boost fraud protection rates by an average of 20%, and by as much as 300%, in some instances. Spend more, then, and feel safer too.
* In case you missed it, this week’s title is an ironic acknowledgement to Anthony Trollope’s 1875 novel, The Way We Live Now, which satirises the financial scandals of the 1870s. The world, hopefully, is a much less scandal-prone place today.
22 January 2025
The above does not constitute investment advice and is the sole opinion of the author at the time of publication. Heptagon Capital is an investor in Mastercard. The author of this piece has no personal direct investment in the business. Past performance is no guide to future performance and the value of investments and income from them can fall as well as rise.
Click here to view all Blog posts.
Alex Gunz, Fund Manager
Disclaimers
The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital LLP believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital LLP, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital LLP is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital LLP disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document.
The document is protected by copyright. The use of any trademarks and logos displayed in the document without Heptagon Capital LLP’s prior written consent is strictly prohibited. Information in the document must not be published or redistributed without Heptagon Capital LLP’s prior written consent.
Heptagon Capital LLP, 63 Brook Street, Mayfair, London W1K 4HS
tel +44 20 7070 1800
email [email protected]
Partnership No: OC307355 Registered in England and Wales Authorised & Regulated by the Financial Conduct Authority
Heptagon Capital Limited is licenced to conduct investment services by the Malta Financial Services Authority.
