In the February edition of the Velera Payments Index, we saw that credit and debit activity increased for January. Consumer spending remained resilient despite a marked decrease in consumer sentiment.

According to the January Consumer Confidence Index, consumer confidence sharply dropped by 9.7 points to 84.5. These results reflected declines across all five subsets of the index, and dropped to its lowest level since May 2014, when it was 82.2. The January 2026 University of Michigan Index of Consumer Sentiment posted a one-point gain, up to 57.3, however, by comparing year-over-year complete data, the survey is down 20% from January 2025. Consumers expressed concerns about the risks associated with job losses and the erosion of personal finances.

This month’s edition also featured a deep dive into Buy Now, Pay Later (BNPL) trends that are reshaping everyday money management.

Key Takeaways

Key takeaways from this edition of the Payments Index include:

Growth in transactions and purchases for January continued at the same pace, proving the resilience of consumer activity. Debit purchases increased by 6%, with the Money Services and Services sectors accounting for 70% of that growth. Credit purchases were up 2.5%, with the Goods and the Service sectors accounting for 60% of the entire increase. For January, debit transactions were up 3.4% and credit transactions rose by 2.4%.
Buy Now, Pay Later payments and transactions facilitated by cards grew by 22% and 12%, respectively, for the top BNPL merchants over the last year; however, growth gradually slowed throughout 2025. Affirm, Afterpay and Klarna represented approximately three-quarters of BNPL payments for 2025. According to a recent PYMNTS Intelligence report, BNPL and card installment plans have moved into everyday management, no longer being relied upon for just seasonal adoption and point-of-sale convenience. Despite representing the smallest share of activity across all generations, Younger Gen Z consumers increased their usage of BNPL debit payments by 80% compared to 2024. BNPL debit payment growth rates decreased for each successively older generation following the Younger Gen Z cohort. The average BNPL debit payment increased from $39.04 to $42.25 in 2025. For 2025 BNPL credit payments, positive growth among younger consumers was offset by negative growth among older consumers. Additionally, FICO has announced plans to add BNPL to credit score models in the near future.
CPI rose 0.2% in January, with the 12-month inflation rate easing to 2.4%; shelter and food were the primary drivers of the monthly increase.
Stronger-than-expected job growth may impact the likelihood of an interest rate reduction at the next Federal Open Market Committee (FOMC) meeting, which concludes on March 18.

What Should Credit Unions Do Now?

Credit unions should consider the following strategies to maintain relevance, maximize engagement and support members:

Elevate your debit strategy with BNPL. Installment plans have become an everyday cash-flow tool, providing members with flexibility and predictability without taking on new credit. Younger members are driving this shift, pushing BNPL into the mainstream and positioning debit-based BNPL as a key strategic opportunity for credit unions. To stay competitive, credit unions need to own the BNPL experience. Ideally, your credit union should offer a turnkey BNPL path, where members can view, accept and manage installment offers directly in your credit union’s mobile app, with pre- and post-purchase options. The benefits for your credit union are compelling — higher engagement, stronger retention, increased spending and preserved interchange.
Transform credit card acquisition with instant digital origination. Digital origination is now essential for credit unions looking to grow and compete in a digital-first landscape. Members today expect instant decisions, especially for credit cards. Your credit union should strive to offer a seamless, end-to-end digital experience with real-time approvals and immediate access to credit card credentials through digital banking and mobile wallets. By offering a solution that includes integrated membership verification and instant decisioning, members and prospective members will benefit from the same fast, intuitive application process, positioning credit unions for stronger, sustained growth.
Maximize card engagement with a strategic onboarding journey. After a credit card is instantly approved and issued, the next critical step is guiding members through an onboarding journey that drives activation and early usage — key behaviors for establishing and maintaining top-of-wallet status. Timely, personalized, data-driven touchpoints engage cardholders right away, boosting satisfaction and strengthening loyalty. Consider building a new account onboarding journey marketing campaign that supports these goals. When paired with instant digital origination, a strategic onboarding journey transforms every new credit card account into a high-value relationship and a catalyst for long-term cardholder engagement.

Not sure how to find or implement a BNPL or instant digital origination solution, or a strategic onboarding marketing campaign that will be the right fit for your credit union? Consider partnering with a fintech CUSO, like Velera, to help.

Looking Ahead

Interest rates were left unchanged after the first FOMC meeting of 2026, which concluded Jan. 28. A partial government shutdown has hit the Department of Homeland Security, as Congress did not act to fund the agency by Feb. 13. With stronger-than-expected job growth in January, the likelihood of an interest rate reduction might decrease when the next FOMC meeting occurs in March.

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.