This review explores the transformative impact of Artificial Intelligence (AI) and blockchain technologies on financial operations, with a particular focus on modern payment systems. As the financial sector undergoes rapid digital transformation, AI and blockchain emerge as key drivers reshaping payment processing, fraud detection, transaction security, and operational efficiency. AI enhances payment systems by enabling real-time data analysis, intelligent automation, and adaptive risk management, while blockchain offers decentralized, transparent, and immutable transaction records that increase trust and reduce intermediaries. This examines current advancements in AI-driven payment automation, including machine learning algorithms for fraud detection, natural language processing for customer service, and predictive analytics for transaction risk assessment. It also highlights blockchain’s role in enabling faster cross-border payments, smart contracts for automatic execution of payment terms, and decentralized finance (DeFi) platforms that challenge traditional banking models. The synergy of AI and blockchain technologies is discussed as a powerful combination that addresses limitations inherent in legacy payment infrastructures, such as high costs, slow settlement times, and vulnerability to cyber threats. Through a comprehensive literature review, the study identifies key benefits such as enhanced security, improved transaction transparency, reduced operational costs, and increased accessibility for underbanked populations. However, it also considers challenges including regulatory uncertainty, scalability concerns, data privacy issues, and integration complexities within existing financial systems. The review concludes by emphasizing the need for ongoing innovation, robust regulatory frameworks, and cross-sector collaboration to fully harness the potential of AI and blockchain in payment systems. It calls for further research into scalable solutions and ethical considerations to ensure inclusive, secure, and efficient financial operations worldwide. This thus provides valuable insights for financial institutions, technology developers, and policymakers seeking to navigate and leverage the evolving landscape of AI- and blockchain-enabled payment technologies.