Velera’s Payments Study Reveals Consumers Want Choice

By Roy Urrico

Consumer payment preferences and behaviors are evolving in response to economic conditions, shifts in consumer spending patterns and the rapid rise of digital innovation. Those findings are featured in Velera’s 2025 Eye on Payments study.

The study observed that today’s consumers have more ways to pay than ever – and they are using almost all of them. From cards and cash to digital wallets, peer-to-peer (P2P) and buy now, pay later (BNPL) options, credit union members and bank customers are moving fluidly across the full payment spectrum in search of convenience, confidence and control.

Velera Chief Marketing and Communications Officer Tom Pierce.

“This is our eighth year doing this study. It has definitely been fascinating through the years to see how the trends have evolved and a few emerging payments from a few years ago have now become mainstream,” Velera Chief Marketing and Communications Officer Tom Pierce told Finopotamus.

“The payments industry continues to evolve amid a complex economic environment, tumultuous geopolitical landscape and legislative changes, all of which are ultimately shaping consumer confidence. While spending has shown resilience, consumer uncertainty remains a defining factor — and it is directly influencing the behavior of credit union members,” revealed the Velera report. “In fact, 74% of credit union members report the current economic outlook is affecting how they plan to make future payments or transactions.”

Pierce added: “Today’s consumers are balancing their familiarity with traditional payments offerings with a growing appetite for digital tools. The clear theme is convergence – traditional payments remain strong, but digital is no longer optional.”

Key Takeaways

This year’s Eye on Payments study, culled from an online survey of 1,750 U.S.-based credit union members and non-members in June and July 2025, highlights the mainstream adoption of digital wallets and contactless payments, as well as growing comfort with P2P and BNPL offerings. Yet even as digital usage expands, cash continues to hold its ground as the third-most preferred payment method behind debit and credit. ATMs remain vital, too, with one in four members using them weekly.

Other findings include:

• Sixty-nine percent of consumers now use mobile wallets, up from 44% in 2021. Contactless card usage also remains strong, with 80% of members holding a tap-to-pay card and nearly half using it weekly.

• Thirty-eight percent of members would likely use a BNPL program if offered by their financial institution, with reported adoption highest among younger generations.

• P2P offerings are ubiquitous: Nearly three-quarters (74%) of consumers use them at least periodically, and 39% of Gen Z and 38% of millennials said P2P is a primary payment method.

• One in three consumers now use artificial intelligence (AI) weekly for budgeting, and nearly half are open to using it for financial transactions.

• Ten percent of consumers experienced card fraud in the past year – most often online (79%) and frequently tied to shared credentials (45%).

Debit, Credit and Lending

Source: Velera’s 2025 Eye on Payments study

Pierce observed: “We always had a battle between debit and credit for the most preferred payment type. And they were right on spot this year, both at about 38%, as the preferred. But as you looked at some emerging payment types – P2P, buy now, pay later, mobile wallet usage, contactless – they have all become pretty much mainstream now. And they are being chosen by most of the generations, which is what is interesting.”

Debit is the go-to for everyday transactions, such as fast-food or fast-casual restaurants, small local retailers, convenience stores, pharmacies and grocery stores. It also dominates routine purchases between $10–$30, subscription services and consumable goods, the study found. Credit, on the other hand, takes the lead for full-service dining, big-box retailers, fuel purchases, transactions ranging from $30–$200 and major or durable goods. Credit union members also say they use credit cards most often for online shopping (44%).

When it comes to BNPL, Pierce noted, “We've got 38% of credit union members saying they would use it if was offered by their credit union. People are using it not just for those big purchases but even for the average day-to-day purchase (such as groceries). It has just become a way for people to kind of manage their payment expectations, instead just putting it on a credit card or debit card?”

Generational Payment Differences

The study also analyzed how and why payment method preferences differ among the generations.

• Boomer+ consumers (ages 61 and above) continue to favor traditional practices while gradually adopting digital tools. Thirty-nine percent now use a mobile wallet — up from just 25% in 2024 — yet most still prefer physical cards, split almost evenly between credit (37%) and debit (35%).

• Gen X (ages 45-60) demonstrates a steady, debit-first approach to finances, with 45% preferring a physical or mobile debit card as their top payment method — more than any other generation. While they express interest in a range of borrowing products, including credit cards (41%) and mortgages (17%), their strongest interest lies in practical options like personal loans (26%) and auto loans (24%).

• Older millennials (ages 37-44) are in a stage of established adulthood, balancing career growth, family responsibilities and a wide range of financial commitments. They are the most frequent users of BNPL, with 85% reporting using it through their financial institution and most instances (59%) using it pre-purchase.

• Younger millennials (ages 29-36) are balancing major life milestones with a need for flexible financial tools. Nearly half experienced a significant event in the past year — such as buying a home (16%), changing jobs (14%) or starting a family (10%) — which drives more complex financial needs.

• Generation Z (ages 18-28) favors variety as the defining feature of their financial behavior, as they prefer using multiple payment methods rather than depending on a single option. They prefer cash and physical cards in nearly equal measure and have a slight preference for using a credit card stored in a mobile or digital wallet (22%). They are also comfortable using P2P — 39% say these accounts, like Zelle and Venmo, are a primary method of payment.

AI and Fraud Prevention Opportunities for CUs

Rising interest in credit cards underscored the need for targeted campaigns that connect members with the lending products members actively seek, the study stated. Meanwhile, the growing prevalence of AI and increasingly complex fraud schemes highlight the importance of member education.

“Credit unions have an opportunity to proactively guide members through these emerging technologies such as AI and security risks, reinforcing their role as trusted partners in a rapidly changing financial landscape,” said Pierce. “We had 85% of respondents said that they trust their credit union for sound financial advice and also for helping with fraud protection. Credit unions need to make sure they are investing in the proper resources internally to provide those educational materials to help their members steer away from fraudulent opportunities.”

AI, Pierce suggested, is the way for the future—from both a financial planning perspective as well as transactions. “Credit unions need to make sure they are up to speed on that and providing the best financial advice of how to successfully use AI, but also use it cautiously out there.”