2025: Robust payment testing is vital

Anthony Walton, CEO, Iliad Solutions

With a number of big brand financial institutions experiencing payment failures during 2024, thousands of customers were left struggling to make payments and access their accounts. The reputational repercussions and financial impact on the banks were significant. There simply can’t be a repeat in the year ahead.

Effective payment testing will be increasingly critical for banks to remain fully functional in 2025 due to evolving technological, regulatory, and customer experience requirements. Here are some key reasons why:

Rising Complexity of Payment Ecosystems

With the continued growth of digital wallets, cryptocurrency, real-time payments (RTP), and contactless payments, institutions need to ensure seamless interoperability between these systems.

The push for faster, cheaper, and more transparent cross-border transactions will require rigorous testing to align with standards like ISO 20022 and SWIFT GPI.

Increasing Regulatory Scrutiny

Financial institutions need to comply with data protection laws like GDPR, CCPA, and emerging regulations. Payment systems must be tested to ensure they handle sensitive customer data securely. Anti-Money Laundering (AML) & Fraud Prevention are areas banks also have to pay significant, ongoing attention to. Testing is vital for systems that monitor transactions for compliance with AML and Counter-Terrorism Financing (CTF) rules.

Enhanced Customer Expectations

Customers now expect near-instant payment confirmations and settlement. Testing ensures that systems deliver real-time results without errors or delays. Even minor downtime or system failure can lead to significant reputational damage. Main stream media has covered the latest payment failures in detail. Comprehensive testing ensures robust performance.

Cybersecurity Concerns

Cyberattacks targeting financial institutions are growing in sophistication. Payment systems must be tested for vulnerabilities to ensure they are resilient against breaches. Multi-factor authentication and tokenisation require thorough testing to prevent unauthorised access.

Innovation in Payment Technologies

Many institutions are incorporating AI for fraud detection and blockchain for secure transactions. Payment testing ensures these technologies function as intended. Smart contracts and automated recurring payments will require rigorous validation to prevent errors or abuse.

Competition and Differentiation

Superior payment experiences can be a competitive advantage. Testing ensures seamless, error-free interactions. Financial institutions must release updates and new features quickly to stay ahead. Automated testing speeds up the development cycle without sacrificing quality.

Global Standards and Interoperability

By 2025, the full adoption of ISO 20022 messaging standards will demand testing to ensure compatibility and proper implementation. As open banking becomes more prevalent, testing will ensure APIs and third-party integrations work securely and efficiently.

Robust payment testing has never been more relevant. Banks who ignore the risks of testing shortfalls do so at their peril. By investing in comprehensive and automated payment testing, financial institutions can ensure they remain compliant, competitive, and trusted in a rapidly evolving financial landscape.