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Growth in Credit and Debit Activity Pushes Consumer Purchasing Behavior Per Velera Payments Report

  • Writer: Roy Urrico
    Roy Urrico
  • Jun 4
  • 4 min read

Updated: 6 days ago

By Roy Urrico


Notwithstanding the declining confidence, positive consumer purchasing behavior persisted with increased growth in debit activity and sustained growth in credit activity, according to the May edition of the Velera Payments Index. Consumer goods categories led the push, possibly signifying increased purchasing ahead of anticipated tariff impacts, indicated the report, which also featured a deep dive into digital payments.


St. Petersburg, Fla.-based Velera – formerly PSCU/Co-op Solutions – which describes itself as the nation’s premier payments CUSO – designed the Velera Payments Index to help credit unions and other financial institutions make strategic, data-informed decisions.


Key takeaways:


  • Debit and credit purchases were up 5.8% and 1.9% respectively, while debit transactions and credit transactions were up 3.7% and 2.3% respectively. The service sector remained a top contributor to year-over-year growth, with insurance sales/premiums displaying notable increases, up 6.8% for credit purchases and up 6.9% for debit purchases.

  • Digital payment transactions were up 6.4% on credit and 10.9% on debit for April, while physical card transactions were down 0.8% for credit and down 1.1% for debit. Within digital payments, the growth was attributable to increases in tokenized transactions, namely the tokenized activity associated with digital wallets.

  • Apple Pay maintained its market share dominance based on total digital wallet transactions, with debit transactions representing 93.5% of all digital wallet debit transactions and credit transactions representing 90% of all digital wallet credit transactions. Google Pay followed with the second-most market share, then Samsung Pay with the third-most market share.

  • Within physical card transactions, declines in chip/EMV and magstripe offset activity growth in contactless transactions. For April 2025, magstripe represented only 2% of all credit transactions (down from 3% in 2024) and magstripe debit represented 8% of all debit transactions (down from 10% in 2024).


Source: Velera Payments Index.
Source: Velera Payments Index.

Economic Indicators


The 12-month Consumer Price Index (CPI) through April increased by 2.3%, down 0.1% from March. Half of the increase was attributable to the shelter index. Energy increased, influenced by natural gas and electricity, offsetting drops in gasoline. Core inflation, which excludes food and energy, remained at 2.8% for April.


The Consumer Confidence Index posted another “substantive decline” for April, dropping 7.9 points to 86.0. “The three expectation components – business conditions, employment prospects and future income – all deteriorated sharply, reflecting pervasive pessimism about the future,” said Stephanie Guichard, senior economist, Global Indicators at the Conference Board, as stated in the Payments Index report. The University of Michigan Index of Consumer Sentiment dropped 8% from March to 52.2 in April. There was a much larger drop-off in the Index of Consumer Expectations, with the area of personal finance and business conditions dropping 32% since January.


In the Labor Department’s May 13, 2025 update, the CPI increased 0.2% in April, bringing the cumulative 12-month rate of inflation up to 2.3%. Shelter, which accounted for more than half of the monthly increase, was up 0.3% for April. The energy index increased, up 0.7%, as increases in natural gas and electricity “more than offset a decline in gasoline.” The food index fell 0.1% in April. Jobs grew by 177,000 in April, with increases in healthcare, transportation, warehousing, financial activities and social assistance. This increase was mainly in line with the average monthly increase over the past 12 months of 152,000.


According to the U.S. Bureau of Labor Statistics (BLS), federal government workers declined by 9,000 in April 2025. New reporting from outplacement firm Challenger, Gray and Christmas cited that half of all layoffs year to date through April were the result of “DOGE actions” and accounted for the reduction of 283,000 jobs in 2025. The BLS reported the overall unemployment rate was unchanged for April at 4.2%, or 7.1 million people.

 

Deep Dive: Digital Payments

 

For May, Velera Payments Index revisited the primary uses of traditional credit and debit cards and the impact of “digital payments,” which represent the alternative uses without a physical card. These include all card-not-present (CNP) activity, as well as all tokenized transactions. While most tokenized transactions are CNP, the report also includes card-present (CP) tokenized activity associated with digital wallets.


In April 2025, digital transactions accounted for 44% of all credit card and debit card transactions. Digital purchases represented a greater share of overall purchases and now represent 55% of credit and debit purchases. The remainder of activity for credit and debit cards includes more traditional physical card payments, or “card in hand” activity. These transactions and purchases represent the total of all tapped (contactless), dipped (EMV chip), swiped (magstripe) and nominal activity using cards.


Thad Peterson, strategic advisor, Datos Insights.
Thad Peterson, strategic advisor, Datos Insights.

“The digital wallet landscape is becoming increasingly fragmented, with offerings ranging from hardware-based options like Apple Pay and Google Pay to app-based wallets such as PayPal and even proprietary solutions from retailers and financial institutions. Each type has strengths and limitations, but all depend on widespread consumer adoption and broad merchant acceptance to succeed. With one in five digital wallet users now regularly leaving home without a physical wallet, coupled with usage projected to surpass debit cards at the point of sale by 2027, credit unions must act decisively. Ensuring credit unions’ cards and accounts are fully integrated with the most widely used digital wallets – Apple Pay, Google Pay, PayPal, Amazon – is essential to maintaining relevance, convenience and top-of-wallet status with members in a fast-evolving payment ecosystem,” said Thad Peterson, strategic advisor, Datos Insights.


What Should Credit Unions Do Now?


According to the Velera Payments Index, credit unions should:


  • Promote mobile wallets to members. “Member adoption continues to grow, with mobile wallets now accounting for 9% of debit transactions and 6% of credit transactions across both card-present and card not present channels.”

  • Offer members contactless cards. “Dual interface cards are now the norm, with 18% of all debit card transactions and one in four credit transactions now tapped at the point of sale. Check your data to see which members have — and are actively using — contactless cards.”

  • Review and optimize end-to-end digital credit card origination experience. “Consider partnering with a digital consultant to help your credit union fully understand your members’ experiences and identify ways to improve by integrating key technology features.”

  • Launch a frictionless card-on-file solution. “By implementing a card-on-file solution, cardholders will be enabled to seamlessly update payment methods across merchants.”

  • Target low active and inactive cardholders. “Consider running a targeted activation/retention campaign to re-engage low active and inactive credit and debit cardholders.”

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