Potential of AI Applications in Payments and Treasury Management; Payments are a natural extension of digital identity; A guide to issuing via BIN sponsorship in the US;

This week on Fintech Wrap Up, European banks brace for instant payments disruption, PayPal doubles down on P2P growth, and AI continues to reshape payments and treasury management

Insights & Reports:

1️⃣ European Banks Must Act Now on Instant Payments & Intraday Liquidity

2️⃣ P2P payments’ role in PayPal’s future strategy: Insights from Investor Day

3️⃣ A guide to issuing via BIN sponsorship in the US

4️⃣ Potential of AI Applications in Payments and Treasury Management

5️⃣ Payment Orchestration: The Future of Optimized Transactions

6️⃣ Payments are a natural extension of digital identity

7️⃣ Kraken's 2024 Comeback: $1.5B in Revenue and 128% Growth

8️⃣ Six Key Strategies for Winning in Digital Banking

9️⃣ Flex, a Brex for business owners, has raised $25M at a $250M valuation

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TL;DR:

This week on Fintech Wrap Up, European banks brace for instant payments disruption, PayPal doubles down on P2P growth, and AI continues to reshape payments and treasury management.

European banks are bracing for a major shake-up with the upcoming EU Instant Payments Regulation and new intraday liquidity rules. By October 2025, instant payments must be as cheap as traditional transfers, requiring banks to maintain 24/7 liquidity. With only 15% of transactions in the Euro area currently instant, adoption is set to surge, bringing both liquidity challenges and strategic opportunities. Those who adapt quickly with AI-driven forecasting and real-time liquidity management will come out ahead.

Meanwhile, PayPal is doubling down on P2P payments, a key driver of its $437 billion TPV in 2024. Venmo’s domestic focus is paying off, with PayPal projecting over $2 billion in revenue from the platform by 2027. Cross-border P2P is also getting a boost with Xoom’s integration into the PayPal app, reinforcing PayPal’s vision of a unified financial ecosystem.

In the U.S., BIN sponsorship remains a gateway for companies looking to launch card programs, but navigating compliance is key. With mobile banking and digital payments outpacing traditional methods, issuers need to work with the right BIN sponsors, processors, and networks to stay competitive.

AI continues to reshape payments and treasury management, from predictive cash flow forecasting to smarter fraud prevention. HSBC and SWIFT are already piloting AI for cross-border fraud detection, and generative AI is enhancing regulatory compliance, customer service, and payment operations. It’s clear that AI-driven solutions are no longer optional but necessary for financial institutions to scale.

Payment orchestration is also gaining traction, helping businesses optimize transactions by dynamically routing payments across multiple providers. This not only increases success rates and reduces costs but also ensures compliance with regulations like PSD2 and PCI-DSS. As global commerce grows, businesses that leverage payment orchestration will see higher conversions and better customer experiences.

In crypto, Kraken is making a strong comeback, reporting $1.5 billion in revenue for 2024 with 128% growth. With an ARPU of $2,023—far outpacing competitors like Coinbase—Kraken is cementing its position as the go-to exchange for professional traders. Their vision? Becoming the “Nasdaq of crypto,” focusing on liquidity, stablecoin-powered B2B payments, and building an ecosystem of financial services.

Digital identity is also becoming more intertwined with payments, accelerating adoption through frequent authentication touchpoints. Payments providers integrating digital ID verification are improving security, streamlining onboarding, and enhancing fraud prevention—paving the way for a future where biometric authentication becomes the norm.

In funding news, Flex, a Brex-style platform for business owners, raised $25M at a $250M valuation, while BVNK launched an embedded wallet combining fiat and stablecoin payments. Meanwhile, Synctera secured $15M and signed Bolt as a customer, reinforcing its position in the BaaS space.

Plenty of movement across fintech, payments, and digital banking—stay tuned for more insights next week! 🚀

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Insights

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European Banks Must Act Now on Instant Payments & Intraday Liquidity

European banks are undergoing a fundamental shift in payments and liquidity management due to the EU Instant Payments Regulation (2024/886) and the ECB’s new intraday liquidity requirements. By October 2025, all European banks must offer instant payments at the same cost as traditional credit transfers, with no additional fees or transaction limits. These changes will require banks to maintain 24/7/365 liquidity availability, significantly increasing the complexity of intraday liquidity management.

Despite the potential of instant payments, adoption remains low, accounting for only 15% of transaction volume and 4% of transaction value in the Euro area in early 2024. The slow uptake has been attributed to high per-transaction costs, limited bank participation, and a €100,000 transaction cap, which will be removed in October 2025. As a result, instant payments are expected to grow rapidly, increasing liquidity demands and creating greater payment asymmetry between incoming and outgoing transactions.

The transition to instant payments presents major liquidity challenges for banks. Traditional batch-based settlement processes will no longer be sufficient, as banks must now ensure they have real-time liquidity reserves to process payments instantly. Intraday liquidity volatility will increase, requiring financial institutions to adjust their liquidity buffers, which could lead to higher operational costs. Banks that fail to adapt risk liquidity shortfalls, delayed transactions, and regulatory penalties.

To manage these risks, the ECB has outlined seven key principles for intraday liquidity management, which include real-time forecasting, monitoring, outflow management, liquidity sourcing, and stress testing. Banks must integrate these principles into their operations to comply with the new regulations and maintain financial stability.

To remain competitive, banks must take immediate strategic action. They need to upgrade payment systems to support instant transactions, implement real-time liquidity monitoring, and develop AI-driven liquidity forecasting tools. Additionally, banks should transition from traditional treasury models to dynamic liquidity management, optimizing their intraday liquidity buffers to reduce costs. A cross-functional approach involving treasury, risk management, and payment operations will be essential to successfully navigating this transition.