In the May edition of the Velera Payments Index, we saw consumers continue to spend in April despite a sharp increase in gasoline purchases, with growth remaining strong in debit and credit card transactions and purchases. This month’s edition also featured a deep dive into the ongoing transition to digital and contactless payments.

While the overall Consumer Confidence Index score has declined since 2021 despite modest improvement in three of the five components, consumer confidence edged up 0.6 points in April to 92.8. The April 2026 University of Michigan Index of Consumer Sentiment results dropped 6.6% from March to 49.8. In preliminary May results, the Index of Consumer Sentiment softened further to 48.2. The reduction in sentiment was apparent across all demographics (age, income and political party). The war in Iran continues to affect gasoline prices and overall inflationary pressures, negatively influencing consumer sentiment.

Key Takeaways

Key takeaways from the May edition of the Payments Index included:

Transactions and purchases for April remained strong for both debit and credit. Debit purchases increased by 8.5%, with the Money Services, Goods and Gasoline sectors accounting for three-quarters of that growth. Credit purchases were up 3.1%, with Gasoline accounting for 35% of the entire increase. In April, debit transactions were up 5%, and credit transactions rose by 2.6%.
The Consumer Price Index surged 0.6% in April, taking the 12-month inflation rate to 3.8% and marking the largest increase in two years. Gasoline was again the primary driver, accounting for roughly 40% of the increase. Also increasing were the house and food indices. 12-month Core-CPI rose to 2.8%.
Digital wallets continued to gain momentum. Year to date through April, digital wallets accounted for 12% of all debit transactions, up from 9% a year earlier, and 7% of all credit transactions, up from 6%.

Deep Dive: Digital Payments

This edition explored the primary ways credit and debit cards are used, including the Velera view of “digital payments” — the alternative ways cards can be used without a physical card required to facilitate the transaction, including card-not-present (CNP) activity, tokenized transactions and card-present (CP) tokenized activity associated with digital wallets, namely the “Pays” (Apple Pay, Google Pay, etc.).

Through April 2026, digital transactions accounted for 48% of all credit card transactions and 46% of all debit card transactions. Digital purchases represented a greater share of overall purchases, with digital credit purchases representing 57% of all credit purchases and digital debit purchases representing 56% of all debit purchases year to date.

Contactless transactions continue to increase. The increased number of contactless cards in the market, consumer comfort and acceptance of “tapping” transactions, as well as the increased merchant adoption of terminals that accept contactless transactions have contributed to this growth. Year to date through April, credit contactless transactions represented 29% of all credit transactions, up from 25% in 2025. Debit contactless transactions represented 26% of all debit transactions, up from 20% in 2025.

For digital card activity, the percentage of overall transactions that are non-tokenized is declining for both credit and debit cards, in favor of tokenized cards on file and digital wallets. Year to date through April, non-tokenized transactions accounted for 20% of all credit transactions, down from 21% in 2025. Non-tokenized debit represented 20% of overall debit card transactions, down from 21% in 2025.

What Should Credit Unions Do Now?

In order to maintain relevance, maximize engagement and best support members, credit unions should consider the following strategies:

Deepen engagement inside digital banking. A credit union’s mobile app and digital banking platform should serve as the central hub for members’ card management. When members can easily set controls, receive real-time alerts, review and redeem rewards, or instantly access a digital version of their card, they are far more likely to keep that card top of wallet. Providing personalized prompts and seamless self-service tools further reinforces frequent, high-value interactions.
Adopt a digital wallet-first strategy. As everyday spending continues to shift to mobile wallets, credit unions that make wallet provisioning seamless gain a clear advantage. By encouraging members to add their card to a wallet at activation — while highlighting security and convenience benefits and offering incentives for early wallet transactions — credit unions can help ensure their card becomes the default payment method in members’ digital lives.
Enable instant origination for digital-first expectations. Speed and immediacy are now expected by consumers — at every touchpoint. By providing instant decisioning, streamlined digital applications and immediate access to a digital card upon approval, credit unions remove traditional origination barriers. When applicants can apply anytime, receive approval in moments and start transacting within minutes, credit unions capture early spend, accelerate membership growth and meet digital-first expectations.
Advance your digital user experience with expert guidance. Partnering with a resource that delivers expert digital experience consulting can help credit unions evaluate, optimize and strengthen their online and mobile banking experiences. After identifying experience gaps and benchmarking performance, digital experience consultants can provide actionable insights and clear recommendations, building practical roadmaps for credit unions to drive smarter engagement, improved product delivery and a more connected digital journey.

Looking Ahead

Interest rates were left unchanged after the Federal Open Market Committee (FOMC) meeting on April 29 with no changes to the Prime rate. The next meeting is scheduled for June 16, where the Federal Reserve (under new leadership) will need to balance the swift inflationary growth from energy prices and other economic impacts of the war with Iran and erratic job growth.

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

PSCU Payments Index July 2023: Credit and Debit Purchases Rebound with Positive Year-Over-Year Growth

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