TAMPA--Despite persistent inflation, elevated gasoline prices and weakening consumer sentiment, Americans continue to spend, but significant generational differences are emerging in how they pay and where they direct their dollars, according to the latest Velera Payments Index, which found younger consumers increasingly favoring digital-first payment experiences and essential spending categories while older consumers maintain more traditional payment habits.
“Even with ongoing pressure from higher gas prices and inflation, consumers are continuing to spend — but not in the same way across generations,” said Carrie Stapp, Vice President, Marketing, Velera. “Younger consumers, in particular, are showing a stronger pull toward essential categories and digital-first payment experiences, while older segments are maintaining more traditional spending patterns. That divergence is creating new opportunities for credit unions to better align payment strategies, personalize engagement and meet members where they are.”
Key takeaways for May include:
- Transactions and purchases for May remained strong for both debit and credit. Debit purchases increased by 8.5%, with the Money Services, Goods and Gasoline sectors accounting for more than three-quarters of that growth. Credit purchases were up 4.4%, with Gasoline accounting for just over a third of the entire increase. In May, debit transactions were up 5% and credit transactions rose by 3.6%. The Goods sector remained a top source of credit and debit growth, accounting for 40% of the debit transaction growth and 47% of the credit transaction growth.
- The Consumer Price Index (CPI-U) jumped 0.4% in May on rising Energy costs, taking the 12-month inflation rate to 4.2% — marking the highest inflation rate in three years. Gasoline, the primary driver, accounted for 60% of the increase. Also increasing in May were the Housing and Food indexes, while the 12-month Core-CPI rose to 2.9%.
- Generation Z demonstrated less discretionary spending for both credit and debit than older generational segments, with a higher percentage of monthly spending attributed to Gasoline, Transportation and Restaurants.
The full report is available for download here.