Beautiful Virgin Islands

Saturday, Aug 22, 2026

Mobile payments undermine banks' battle for credit card dominance

Mobile payments undermine banks' battle for credit card dominance

The holiday shopping season is when consumers rack up the most debt, and banks want that to happen on their credit cards. But as Americans increasingly pay on mobile phones, analysts say it’s becoming harder for banks to stay “top of wallet.”

Google Pay, PayPal Checkout and Apple Pay let you pick a default card to store on file. As people increasingly pay on mobile phones, they’re less likely to stop and think about which card has the most rewards. Some say they’ll go with what’s easiest.

Banks are battling to get consumers using their credit cards for holiday shopping. But faster mobile payment options are making that more difficult.

As consumers shop on their phones, analysts say they may end up using whichever card is automatically stored instead instead of considering rewards.

Gerard du Toit, banking consultant at Bain, said smartphone shopping “changes the equation” for credit card habits — it takes something “dramatically better” to unseat people from their default payment method.

“When you’re carrying your wallet, you make conscience decisions about which card to use,” he said. “With mobile you have a registered card on file, and you’re going to stick with that card in perpetuity unless something happens to jolt you out of using that card.”

To get people on board, banks have historically offered rewards and cash-back, which can be a short-term loss leader. J.P. Morgan’s popular Chase Sapphire Card resulted in a $330 million charge last year after credit-card customers redeemed points faster than anticipated. Capital One, American Express, and Citi also compete on attractive cash-back and rewards programs.

Holidays are typically a key time for banks to sign people up for these offers. This year, 23% of consumers say they planned to open a new credit card during the holidays, according to a recent Experian survey. Retail card balances are now up to $90 billion -a 7% increase from five years ago.

While smaller every-day purchases like groceries or gas drive interchange revenue as someone swipes a card, bigger-ticket year-end gifts can bring larger recurring interest revenue.

“This is the time of year people go into debt,” said Ben Sabloff, AQN Strategies founder and CEO. “For the banks, being in your wallet this time of year is helpful for driving interest.”


Move to mobile shopping

Getting in your wallet increasingly includes digital wallets. PayPal Wallet, Apple Pay, Google Pay offer ways to streamline the check-out process. While they allow you to load multiple payment methods, some tech players are now offering their own cash-back cards with rewards. The Apple Card, for example, gives daily cash back and is used through the app.

More consumers are making use of mobile wallets, according to Deloitte. The firm’s holiday survey showed the share of shoppers making a purchase on mobile phones doubled in the past five years. This year marks the first time that more than half of those Deloitte surveyed plan to use their smartphone, in some capacity, for holiday shopping online. Desktop computers have seen a slight shift down to 75%, while tablets remain steady at 22%.

Deloitte’s U.S. payments leader Zach Aron said mobile is “by far and away” where people will say it’s how they want to pay going forward. But rewards cards aren’t top of mind.

“How often you pick the funding instrument, it’s pretty low,” Aron said. “The predominant instrument winds up being your bank account or your debit card.”

Aron said it adds pressure on banks to become the top credit card or payment method in a person’s actual mobile wallet. The stakes are high for banks when it comes to credit cards. It’s the top payments revenue driver, with a compound annual growth rate of between 8% and 9%, according to Aron.

“Credit cards remain one of the relative bright spots in the banks in payments despite all the completion and cost rising to give more value back to the consumer,” Deloitte’s Aron said. “To continue to drive usage on cards and maintain what are still healthy revenues and margins, you have to drive rewards.”

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Petrol Bombs Set Luxury Cars Alight Outside Birmingham Wedding as Police Hunt Three Men
Bitcoin Surges Toward $80,000 as Short Squeeze and ETF Inflows Ignite Crypto Rally
Twenty-Nine US States Take Meta to Trial Over Alleged Child Addiction on Instagram and Facebook
Former Scottish National Party Executive Peter Murrell Jailed for Five Years Over £400,000 Embezzlement
Moderna and Merck's Personalized Cancer Vaccine Succeeds in Historic Late-Stage Melanoma Trial
Prince Harry and Meghan to Move Back to Britain With Their Children
England and Wales Have Fewer Than 1,800 Prison Places Left for Men
Suspected People Smuggler Arrested After Investigation Identified Him
Children's Doctors Warn That Vaping Can Lead Young People to Smoking
Hundreds of Thousands of Students Receive GCSE and Vocational Results Across England, Wales and Northern Ireland
Here Is What Can Never Happen in Your Country: Taiwan Is Giving Money to All Its People Because It Collected Too Much Tax
UK Inflation Rises to 2.9% as Energy Bills Jump
UK Issues New Conduct Guide for Asylum Seekers on Consent and Respect
A Sleepless Night on Wall Street: Nasdaq to Begin Nearly Round-the-Clock Trading
"The First in the World": 69-Year-Old Protested Artificial Intelligence—and Went to Jail
Ukraine's Ousted Defence Minister Calls for Wartime Presidential Election
China’s Lifelike AI Humans Move From Livestreams Into Real-World Service Roles
Sarah Ferguson Reportedly Retreats to Late Ex-Boyfriend's Swiss Chalet
Cristiano Ronaldo and Georgina Rodríguez Sign Prenup Protecting Their Separate Fortunes
Thieves Steal Antonello da Messina Renaissance Masterpieces From Sicilian Museum
Better.com Founder Who Fired 900 Employees on Zoom Is Ousted as CEO
Italian Speed Camera Issues Nearly 32,000 Fines in 10 Weeks, Worth More Than €3 Million
AI Manager at San Francisco Store Recommends Firing Human Employee
Google Launches Pixel 11 With Gemini AI at the Center of Its Hardware Strategy
Reform UK Unveils Plan to Cut Welfare Spending by More Than £50 Billion a Year
Prime Minister Andy Burnham Praised Extinction Rebellion for Doing a 'Great Service'
UK Wildfire Phone Alert Triggers Backlash as Users Switch Off Emergency Warnings
Heathrow Roads Reopen After Burst Water Main Floods Access to Terminals 2 and 3
Former NBA Players Enes Kanter Freedom and Royce White Say They Will Enter 2027 WNBA Draft
Former Cambridge Professor Jason Arday Found Dead Days After Resigning Amid Plagiarism Row
US Appeals Court Rules AI Agent's Website Actions Are Legally Attributed to the User
France's Constitutional Council Blocks Social Media Ban for Children Under 15
Liechtenstein Changes Royal Succession Rules to Allow Women to Inherit the Throne
Women Allege Rape and Sexual Abuse at British Army College for Teenage Recruits
Minnesota: Two independent investigators posed as Muslims (one wearing a burqa) and showed how they could vote in elections without identification.
China’s Kimi Launches AI-Focused Credit Card With Agricultural Bank of China and American Express
Former Labour Adviser Arrested on Suspicion of Spying for China Held Privileged Access as Top Party Donor
Turkish Parliament Passes Landmark Bill Granting Conditional Amnesty to Disarmed PKK Members
Donald Trump Warns FIFA Against Ousting Gianni Infantino Amid Revolt by Global Football Leaders
Jeff Bezos Joins Investor Group Closing In on $6 Billion Liverpool FC Stake
UK Councils to Receive Sweeping Planning Powers to Ban New Vape and Betting Shops
Russia’s A7 Builds a State-Linked Payments Network Beyond Western Sanctions
Hyper-Realistic Reborn Dolls Draw Collectors Seeking Comfort and Craft
Gen Z Cuts Back on Dating as a Night Out Nears $200
Patients Turn to Artificial Intelligence for Therapy as Psychiatrists Warn of Privacy and Clinical Risks
Couples Embrace ‘Sleep Divorce’ to Protect Rest and Reduce Tension
Meta Ordered to Pay $567 Million and Change Facebook and Instagram Safeguards for Children
Up to only 10 Months in Prison for Swedish Officer’s Murderer Sparks Anger
Success: Nvidia Turned Gaming Chips Into the Engine of the AI Boom
Jorge Messi, Lionel Messi’s Father and Longtime Agent, Dies at 68
×