PanamaTimes

Saturday, Oct 24, 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

PanamaTimes
0:00
0:00
Close
Advertising trick: Pepsi’s Harrier Jet Commercial Led to a $700,000 Court Fight
Why 2027 Could Be a Strong Year for Stocks—and Why the Forecast Is Fragile
Trump’s Top General Seeks an Exit Strategy From Iran War, Report Says
Brock Lesnar Retires From Wrestling, Closing a Career of Rare Athletic Range and Lasting Controversy
Trump-Era Policy Shifts Test the Boundaries of U.S. Institutions
Weight-Loss Drug Boom Tests the Limits of Prescription Advertising Rules
Breaking With the Past: One of the World’s Smallest Countries Changes Its Name
AI Is Remaking the US Economy, From GDP Growth to iPhone Prices
Cuba’s Grid Fails Again as Fuel Crisis Deepens
Nazca Lines Flight Crash Kills Thirteen as Peru Suspends Aerodiana
OpenAI Faces Demands for Full Disclosure After Models Breach Hugging Face
FIFA’s Private-Investment Plan for World Cup Rights Draws European Revolt
Why Americans Queue for $15 Ice Cream and a $100 Caviar Pint
OpenAI Sued After ChatGPT Allegedly Discouraged Emergency Care Before Near-Fatal Embolism
Miliband Sets Climate and International Law at Centre of UK Diplomacy
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
Morgan Stanley Builds a Wall Street Lead in AI Infrastructure Finance
High Prices Push Coffee Drinkers Toward Whole Beans and Home Brewing
Spain Defeats Argentina in Extra Time to Win Second World Cup
Venezuela’s Earthquake Devastation Turns U.S. Investment Opportunity Into a Thirty-Seven Billion Dollar Reconstruction Challenge
Ukrainian Drones Strike Wildberries Warehouses Deep Inside Russia
The Ledger Will Not Trust on Faith
Trump Administration Pressures Banks to Restrict Financial Access for Undocumented Immigrants
The Ten World Cup Finals That Defined Football History
Smartphones Are Getting More Expensive, Sales Are Collapsing, and Even Apple Admits: "Prices Will Rise"
The AI Race Enters Its Infrastructure Era
Colombia Influencer Dies After Cosmetic Procedure at Unlicensed Bogota Salon
A Quiet Bastille Day: France Grapples with World Cup Heartbreak and Leftover Fireworks
Spain in Ecstasy: "We Feel Unbeatable, We Taught the Whole World a Lesson"
On the Island That Did Not Yield to Trump, There Is No Electricity, and 10 Million Live in Darkness
World Cup Visitors Turn American Big-Box Stores Into Souvenir Stops
Anthropic Reengineers Agentic Architecture to Shift Autonomous Workplace Automation to the Cloud
Global Crisis Alert: Escalating Middle East Tensions and UK Political Upheaval
Japanese Technology Firm Fujitsu Launches Advanced Artificial Intelligence Tool for Corporate Disclosures
South Africa Officially Launches Nationwide Campaign for Highly Contested Local Government Elections
United Kingdom Commits Additional Funding for Unexploded Ordnance Clearance in Laos
Singapore Announces Stringent New Greenhouse Gas Regulations for Commercial Cooling Systems
Cambodia and Thailand Hold High-Level Border Security Talks at United Nations Headquarters
Myanmar Military Government and China Sign Major Agreement to Upgrade Media and Cultural Cooperation
Knife Attack at Swiss Train Station Leaves Three Injured in Suspected Act of Domestic Terrorism
Transnational Extortion Gang Threatens Canadian Police With Army of One Thousand Armed Operatives
Australia Imposes Forty-Two-Day Quarantine on Cruise Ship Passengers Following Deadly Hantavirus Outbreak
International Monetary Fund Unlocks Seven Hundred Million United States Dollars for Sri Lanka Following Economic Reforms
Australia Launches Record One Point Four Billion Dollar Lawsuit Against Chemical Giant 3M Over Contamination
China and Canada Foreign Ministers Meet in Ottawa in Effort to Stabilize Strained Diplomatic Ties
Indonesia Demands Urgent United Nations Security Council Reform Amid Escalating Global Conflicts
Extreme Weather Patterns Trigger Severe Drought in Madagascar and Destructive Flooding in East Africa
Indian State of Karnataka Faces Political Upheaval as Chief Minister Siddaramaiah Abruptly Resigns
Philippines and Japan Reaffirm Defense Ties as Crucial for Indo-Pacific Regional Stability
Norway Joins French Nuclear Deterrence Initiative in Major Shift for European Security Architecture
×