In the November edition of the Velera Payments Index, we saw that consumer spending continued to show resilient growth, but consumer sentiment dropped to levels last seen during the peak of the post-COVID inflationary period in 2022.

The October 2025 University of Michigan Index of Consumer Sentiment dropped 3.3 points to 50.3. For the Consumer Confidence Index, consumer sentiment remained virtually unchanged for October, down one point to 94.6. The declining sentiment is influenced by concerns about personal finances, eroding business conditions in the coming year and from impacts of the federal government shutdown, which lasted 43 days — the longest in the country’s history — and did not end until Nov. 12.

This month’s edition also featured a Deep Dive into the Money Services sector and a look at how early sales from Amazon, Walmart and Target are shaping consumer payment trends to start the holiday shopping season.

Key Takeaways

Key takeaways from this edition of the Payments Index include:

While consumer sentiment declined, growth in actual purchasing activity remained consistent in October. Debit purchases increased by 6.4%, with the Money Services and Goods sectors accounting for two-thirds of the growth. Credit purchases were up 1.7%, with the Goods, Services and Restaurant sectors accounting for 94% of the entire increase. Gasoline and Travel were nominal, with declines in credit purchases. For October, debit transactions were up 3.9% and credit transactions rose by 1.6%.
Money Services, mainly comprising peer-to-peer (P2P) payments, continued to be the largest contributor to growth in debit purchases, representing 13% of overall debit card purchases. Two-thirds of purchases in this sector are P2P-related, and the balance is made up of Buy Now, Pay Later (BNPL) and cryptocurrency activity. The largest year-over-year growth in Money Services debit transactions was among the youngest consumers, younger Gen Z, with an average increase of 18.8%, while representing the smallest share of activity (4.8%) and the lowest average payment ($61.19).
The holiday spending season kicked off in October with the expected annual sales from the three largest retailers. The Goods sector notably contributed to the year-over-year growth in credit and debit purchases. Amazon’s sale yielded the largest year-over-year growth, followed by Walmart and Target.
With the last FOMC of 2025 concluding on Dec. 10, there may be time for scheduled published economic data to be delivered in late November and early December. While the Fed hinted at a possible rate reduction, Chair Jerome Powell also cited differing views among the voting members of the committee following the last meeting in October.
In October, the ADP private-sector jobs report showed an increase in U.S. private employment jobs of 42,000, beating the expected Dow Jones forecast by roughly 20,000 jobs. The next BLS report is scheduled for release on Dec. 5.

Checking In: Holiday Season

The 2025 holiday shopping season is fully underway and began with early October sales at major U.S. retailers, including Amazon, Walmart and Target. The NRF estimates that holiday sales could surpass $1 trillion for the first time in 2025, and growth in sales for the November and December period could grow between 3.7% and 4.2% over 2024.

Amazon posted the strongest year-over-year sales growth during the October holiday season. For the Amazon Prime Big Deal Days event, credit purchases increased by 10.5% and debit purchases increased by 11.8% compared to similar year-over-year days. Transaction growth outpaced growth in purchases during this timeframe, with credit transactions up 12.2% and debit transactions up 14.5% year over year.

For the Walmart Deals six-day sale in October, credit purchases were up 9% and debit purchases were up 7.1% year over year, with credit transaction growth up 9.4% and debit up 5.9%.

Target had the weakest year-over-year growth of the three retailers for the October sale events, with credit purchases down 5.2% and debit purchases down 0.5%. Credit transactions decreased by 4%, while debit transactions only marginally increased by 0.3%.

What Should Credit Unions Do Now?

Credit unions should consider the following strategies to support members and maintain relevance in the rapidly changing economic environment:

Elevate P2P to a Strategic Growth Driver: Embed P2P payments functionality directly within the credit union’s digital banking system — this will help protect interchange income and maintain their role as members’ primary financial institution. Keeping transactions within the credit union’s ecosystem will drive frequent engagement and reinforce member loyalty. To drive adoption, actively promote your credit union’s P2P capabilities through in-app tutorials, email campaigns and branch staff training. Highlight the security and speed of the experience and consider offering rewards or incentives for P2P usage.
Integrate Journey Campaigns to Maximize Portfolio Performance: Journey campaigns deliver consistent, targeted outreach by spanning the full cardholder lifecycle — from acquisition and onboarding to usage and retention. Timely prompts and educational touchpoints improve activation rates, encourage early and frequent card use, reduce attrition and help secure top-of-wallet status. Credit unions should implement journey campaigns as part of a comprehensive strategy.
Utilize Skip-a-Pay as a Relationship-building Strategy: Deliver timely financial relief while unlocking strategic benefits across member engagement, retention and revenue by offering a post-holiday Skip-a-Pay, which allows eligible members to defer a credit card or loan payment during high-expense periods. Skip-a-Pay initiatives have also been shown to generate incremental revenue and enhance the perceived value of your services. When implemented thoughtfully, Skip-a-Pay becomes more than a seasonal perk; it becomes a relationship-building tool that supports both member well-being and portfolio performance.

Looking Ahead

The December edition of the Payments Index will feature the second part of our annual Holiday Spend updates. We will continue to report on the bellwether retailers (Amazon, Walmart and Target) and monitor trends throughout the rest of the holiday season.

We hope that our credit unions can make informed and strategic decisions to best serve their members by leveraging insights from this and future editions of the Velera Payments Index.