ST. PETERSBURG, Fla.— Even as consumer sentiment and confidence continued to erode, consumer purchasing behavior remained positive in April, with increased growth in debit activity and ongoing consistent growth in credit activity, according to the May edition of the Velera Payments Index.
The report also addresses the surge in digital wallet usage.
“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,” Thad Peterson, strategic advisor, Datos Insights.
“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,” Peterson said. “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.”
Key takeaways for April include:
- Growth rates improved for debit in April and remained consistent for credit. Debit purchases were up 5.8% and credit purchases were up 1.9%, while debit transactions were up 3.7% and credit transactions were up 2.3%. The Goods sector was again the top contributor to growth in both credit and debit purchases, which may indicate consumers buying now to avoid potential upcoming tariff impacts. The Service sector remained a top contributor to year-over-year growth, with insurance sales/premiums having notable increases, up 6.8 for credit purchases and up 6.9% for debit purchases, Velera said.
- Growth in digital payment transactions was up 6.4% on credit and 10.9% on debit for April, while growth in physical card transactions was down 0.8% for credit and down 1.1% for debit. Within digital payments, the growth was attributable to increases in tokenized transactions. Within physical card transactions, growth in contactless transactions was offset by declines in chip/EMV and mag stripe activity.
- The 12-month 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, Velera said.
The full report is available for download here.