Velera Payments Report: Consumer Spending Steadies, BNPL Debit Usage Grows

By Roy Urrico

Though consumer sentiment continued to erode in January, transactions and purchase growth, using debit and credit cards, remained resilient, according to the February edition of the Velera Payments Index. Velera also took a “Deep Dive” into buy now, pay later (BNPL) activity, which showed payments and transaction growing year-over-year (YOY).

St. Petersburg, Fla.-based Velera, which describes itself as the nation’s premier payments CUSO, produces the Velera Payments Index to help credit unions and other financial institutions make strategic, data-informed decisions.

Economic Indicators

From the Velera Payments Index:

• Debit purchases increased by 6%, with the money services and services sectors accounting for 70% of that growth. Credit purchases were up 2.5%, with the goods and the service sectors accounting for 60% of the entire increase. For January, debit transactions were up 3.4% and credit transactions rose by 2.4%.

• For January, the Bureau of Labor Statistics (BLS) reported a 0.2% increase in inflation, bringing the 12-month Consumer Price Index (CPI) down to 2.4%. The largest contributors to the monthly increase were shelter and food, both up 0.2%, which were partially offset by a 1.5% decline in the energy index. Core CPI, which excludes food and energy, rose 0.3% in January, lowering the 12-month Core CPI to 2.5%. Categories contributing to the Core CPI increase included recreation, airline fares, medical care, personal care and communication, while used cars and trucks, household furnishings and operations, and motor vehicle insurance posted declines.

• The Conference Board reported that consumer sentiment in its Consumer Confidence Index dropped in January, down 9.7 points to 84.5. The December 2025 results were upwardly revised by 5.1 points, making the change for the prior month slightly positive. The January results reflected declines across all five subsets of the index, dropping to its lowest level since May 2014, when it was 82.2.

• In the preliminary February 2026 results, the University of Michigan Index of Consumer Sentiment posted a one-point improvement, up to 57.3. Using the YOY complete data, this survey is down 20% from January 2025. “Consumers expressed concerns about the erosion of personal finances and the risks associated with job losses.”

• The BLS reported a gain of 130,000 jobs in January. The overall unemployment rate dropped to 4.3%, or 7.4 million people. January job growth came from the healthcare, social assistance and construction sectors, while job losses were reported in the federal government and financial activities sectors.

• The January ADP jobs report, which tracks changes in U.S. private employment, showed an increase of 22,000. Growth centered in education and health services, financial activities (contrary to the BLS report) and construction. Jobs fell in the professional and business services and manufacturing sectors. The ADP payroll population represents 26 million U.S. private-sector employees.

Deep Dive: BNPL

“Members are telling us they want BNPL to work with the money they already have, not around it,” said Angel Siorek, vice president, product management Velera. “Every time a payment flows through a third-party BNPL app, the credit union loses a little visibility into the member’s day‑to‑day financial life. When credit unions bring BNPL into their own digital experience — including wallets like Apple Pay — and use member‑centric criteria, they can keep those payments in their ecosystem and turn installments into a tool for engagement and financial wellness, not just another checkout option.”

Angel Siorek, vice president, product management Velera.

Following up on its BNPL Deep Dive report from February 2025, Velera found continued strong growth among the largest BNPL providers. In aggregating the YOY growth in BNPL payments via cards for Affirm, Afterpay, Klarna, PayPal, Zip (formerly Quadpay), Sezzle, Sunbit and Flex Pay by Upgrade (formerly Uplift), total debit-based payments were up 22% for the year (January through December), while the number of payment transactions for the same period was up by 12%.

The average BNPL debit payment with these top providers was $42.45. Velera noted that each transaction typically represents only one of multiple installments with the BNPL vendor, not the total purchase.

“BNPL and card installment plans have moved beyond seasonal adoption and point-of-sale convenience and into everyday money management, as consumers look to smooth cash flow and afford everyday items like groceries and utilities,” Velera revealed. “Considering these trends, credit unions have an opportunity to rethink post-purchase engagement and how to better serve their members.”

Additionally, Velera focused on FICO’s announced plans to add BNPL to credit score models in the near future, “given its growing popularity and observed predictiveness for consumer credit risk, but these newer models are not yet commercially available.”

What Credit Unions Should Do Now

The Velera report also presented market opportunities for credit unions, summarized as follows:

Elevate Your Debit Strategy with BNPL. “Installment plans have become an everyday cash-flow tool, providing members with flexibility and predictability without taking on new credit. To stay competitive, credit unions need to own the BNPL experience.”

Transform Credit Card Acquisition with Instant Digital Origination. “Digital origination is now essential for credit unions looking to grow and compete in a digital-first landscape. Members today expect instant decisions, especially for credit cards.”

Maximize Card Engagement with a Strategic Onboarding Journey. “Once a credit card is instantly approved and issued, the next critical step is guiding members through an onboarding journey that drives activation and early usage — key behaviors for establishing and maintaining top-of-wallet status.”