Reports: Why Stablecoins Matter in Emerging Markets; Let’s examine the pace of AI-driven change across fintech deal activity; State of Fintech Q2’25 Report

Let’s dive into this week’s curated collection of fintech reports, whitepapers, and expert guidelines in the latest edition of Fintech Wrap Up. Every resource featured is available for download

Insights & Reports:

1️⃣The UK Payments Landscape in 2025

2️⃣Next Gen SMB Owners Are Reshaping Banking Expectations

3️⃣State of Fintech Q2’25 Report

4️⃣Let’s examine the pace of AI-driven change across fintech deal activity

5️⃣Why Stablecoins Matter in Emerging Markets

6️⃣Quantum Technologies in Finance: Preparing for a Future of Opportunity and Risk

7️⃣The Future of Open Finance in the UK: What the FCA's 2025 Sprint Reveals

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TL;DR:

Welcome to the latest edition of Fintech Wrap Up! This week, we explore how payments, funding, and tech are reshaping the UK and global fintech scene.

In the UK, card payments—especially debit—still reign, making up 75% of digital transactions in 2024. But digital wallets are gaining fast, expected to surpass cards in value by 2028, thanks to biometric security, in-app integration, and perks like BNPL. Open banking is maturing, with 11.7M users and 22M payments monthly, but broader adoption hinges on better commercial models and merchant incentives.

Fintech funding held steady in Q2’25 at $10.5B, with Plaid landing the largest deal at $575M. The US dominated investment, capturing 65% of mega-rounds and 60% of total fintech dollars. B2B fintech and wealth tech led momentum, with wealth tech funding nearly tripling QoQ to $1.9B.

Next-gen SMB owners (18–35) are redefining business banking. They’re using more tools (6–9 on average), value real-time insights, and rely on social media for financial education. Yet despite their digital lean, 68% still hold primary accounts at traditional banks, and many prefer the option of in-branch service.

AI is increasingly central to fintech strategy. So far in 2025, AI-enabled startups have captured 54% of deal value, earning a 242% valuation premium at the early stage. Nearly one-third of US fintechs closing deals since 2021 are AI-enabled.

Finally, stablecoins and quantum tech are gaining ground. In emerging markets, stablecoins promise faster, cheaper cross-border payments. Meanwhile, quantum pilots in fraud detection and security are already in motion, with McKinsey estimating $622B in potential value by 2035.

Thanks for reading Fintech Wrap Up!

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Insights

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Reports

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The UK Payments Landscape in 2025

Card Payments Still Dominate—But Wallets Are Rising

Cards—especially debit—remain the UK's preferred payment method, making up over 75% of all digital payments in 2024. The rise of mobile wallets like Apple Pay and Google Pay has supercharged this dominance by offering fast, contactless convenience online and in-store. Contactless payments are now mainstream, with 93.4% of all in-store card payments under £100 made using contactless in 2023.

However, the trend is shifting. By 2028, digital wallets are expected to overtake plastic cards in transaction value across both e-commerce and POS channels. This transformation is powered by biometric security, seamless in-app integration, and value-added features like BNPL and loyalty programs.

- Open Banking Is Maturing—but Needs a Commercial Boost

Open banking adoption is gaining real traction in the UK, with over 11.7 million active users and 22 million open banking payments processed monthly. The transition from Open Banking to Open Finance is underway, with the UK’s Data Use and Access (DUA) Bill laying the groundwork for a smart data economy worth £10 billion over the next decade.

Variable Recurring Payments (VRPs) and A2A payments are seeing promising growth, although challenges remain in user adoption and merchant incentives.

- Fintech Funding and Innovation Stay Strong

In 2024, the UK attracted 64% of all fintech funding in Europe, reinforcing London’s status as a global fintech hub. B2B payment startups led investment trends, while PayTech accounted for nearly half of total funding.

Stablecoins and crypto are also gaining attention. The FCA’s roadmap to regulate cryptoassets—alongside plans for a digital pound—is setting the stage for more secure, mainstream integration between traditional finance and digital assets.

- Remittances and Cross-Border Payments Evolve