Shifting Trends in Consumer Payments

• Key Insights: Changes in fees, the popularity of buy now/pay later (BNPL), and new technologies are transforming how consumers shop and make payments.

• What Is the Problem: The costs associated with credit and debit card transactions are projected to rise, increasing from $172 billion in 2023 to $187.2 billion in 2024.

• Future Outlook: New payment options will emerge, influenced by factors like agent commerce and cryptocurrencies as we move into the new year.

Consumer payment trends, including the recovery of interchange fees, the growing adoption of BNPL, and interest in crypto payments, will play a significant role in shaping the payment landscape by 2026.

A pressing issue is the proposed vendor settlement. Understanding Visa’s partnership with Mastercard might shift how banks perceive credit cards and consumer behavior in the future. If the settlement gets the green light, banks could need to explore new revenue streams, possibly leading to higher interest rates, increased fees, or less appealing rewards programs. “Customers really value rewards,” noted Sarah Ellingson from LEK Consulting.

With 2026 on the horizon, banks need to stay informed about evolving consumer payment preferences.

Even unsuccessful settlement efforts could result in diminishing credit card use, driven by consumer resistance to interchange fees.

An initiative from the Texas Restaurant Association encourages paying with cash or debit cards amid rising credit card fee costs. Industry insights suggest swipe fees could hit $187.2 billion in 2024, notably up from $172 billion in 2023, with businesses facing an average fee of 2.35%. 

Meanwhile, budget-minded consumers are leaning heavily into buy now/pay later solutions. Research highlights that 30% of U.S. consumers currently utilize some form of BNPL, with younger demographics particularly engaged—55% of Gen Z and 40% of Millennials are using these options. This trend could reshape the landscape of credit card usage, especially among younger audiences.

According to Ellingson, “There are going to be more categories where consumers want to apply these payment methods.” She’s expecting to see BNPL expand into daily essentials like grocery shopping and pharmacies, and possibly even physical retail locations.

Across the banking sector, institutions like Barclays, JPMorgan Chase, and Deutsche Bank are stepping into the BNPL arena, and this trend is likely to grow. Jeroen Hoelscher from Capgemini notes an increasing consumer interest in using stablecoins for payments, even as the regulatory framework is still forming. Initially likely used for international transfers, consumers may soon access these options for everyday transactions.

Accepting digital currencies like Bitcoin is also gaining traction. Square has enabled their merchants to accept Bitcoin without fees until 2026, underlining the need for businesses to accept a variety of payment methods. “You don’t want to risk losing customers by not supporting their preferred payment methods,” commented Hoelscher.

As of late November, around 45% of U.S. consumers reported using AI tools for purchasing decisions, a significant rise since earlier this year. Lauren Taylor from BCG explains this shift as part of the broader shopping experience.

Visa and Mastercard recently launched an AI-driven platform designed to enhance shopping experiences where assistants can conduct searches, select items, and complete transactions directly on behalf of consumers. This could lead to more experimentation by retailers and tech companies next year, according to Hoelscher. Consumer acceptance remains to be seen—while many might welcome AI handling their shopping, questions linger about the reliability of payment processes and overall convenience.

Young consumers are increasingly drawn toward fintech solutions for their banking needs, with examples like Monzo and Revolut in the UK and SoFi and Chime in the U.S. gaining popularity. Research indicates that younger users favor speed and convenience, prompting traditional banks to innovate and adapt to these preferences to keep up with the competitive fintech sector.