Consumer behavior is shifting; can banks keep up?

• Key insights: Pushback connected fees, BNPL and caller exertion are shifting however consumers store and marque payments.

• What's astatine stake: Swipe fees for recognition cards and debit cards totaled $187.2 cardinal successful 2024, up from $172 cardinal successful 2023.

• Forward look: Agentic commerce and crypto volition besides gully consumers to caller outgo options successful the caller year.

Consumer outgo trends specified arsenic pushback connected interchange fees, the emergence of bargain now/pay later, crypto payments and agentic commerce are acceptable to signifier payments successful 2026.

The elephant successful the country is the projected merchant colony with Visa and Mastercard, and however it could alteration banks' positioning of recognition cards and user behaviour going forward.

If the colony is approved, banks volition request to see different ways to regenerate mislaid interchange revenue. That could mean charging higher involvement rates, expanding fees connected accounts oregon diminishing the richness of rewards for customers, Sara Elinson, managing manager and Partner successful L.E.K. Consulting's fiscal services practice, told American Banker. "Customers are precise overmuch driven by the richness of rewards," she said.

Here's what banks request to cognize astir changes successful user outgo trends, looking up to 2026:

Even if the colony doesn't spell through, there's been user pushback connected interchange fees, which could diminish recognition paper usage successful the future.

The Texas Restaurant Association, for example, is encouraging consumers to wage with currency oregon debit cards during the vacation season. This petition comes arsenic restaurants conflict with the rising costs of recognition paper swipe fees. Swipe fees for recognition cards and debit cards totaled $187.2 cardinal successful 2024, according to the Nilson Report, a commercialized publication. That's up from $172 cardinal successful 2023. The mean swipe interest Visa and Mastercard charged merchants successful 2024 was 2.35%, according to Nilson.

Budget concerns among consumers are expected to proceed to assistance bargain now/pay aboriginal arsenic a outgo method. BCG probe shows that 30% of U.S. consumers are utilizing immoderate benignant of BNPL solution. Usage is higher among younger consumers, with 55% of Gen Z and 40% of Millennials utilizing BNPL, BCG's probe shows. The inclination could person a imaginable effect connected recognition paper use, particularly among younger buyers.

"I deliberation determination volition beryllium much categories successful which consumers volition privation to person it available," Elinson of L.E.K. Consulting told American Banker. "I deliberation we'll spot much of it creeping into mundane items—groceries, pharmacies and perchance much into the carnal constituent of sale."