London Daily

Focus on the big picture.
Tuesday, Jun 23, 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

0:00
0:00
Close
Taxpayer Support Grows for Higher Digital Levies on Multinational Tech Companies
Bank of England Signals Caution Over Inflation Despite Easing Energy Prices
Lloyds Banking Group Expands Artificial Intelligence Hiring Amid Sector-Wide Automation Shift
Film Producer Corporate Collapse Leaves Creditors Facing Unrecoverable Losses
UK Ten-Year Brexit Anniversary Highlights Ongoing Political and Economic Uncertainty
Nottingham Maternity Scandal Inquiry Reveals Systemic Failings in NHS Care
Met Office Heatwave Prompts Public Health Warnings Across United Kingdom
Concerns Rise Over Fiscal Stability as Political Uncertainty Weighs on UK Borrowing Costs
UK Taxpayers Back Higher Digital Taxes on Global Technology Firms, Survey Shows
Bank of England Holds Interest Rates Steady Amid Persistent Services Inflation
Reform UK and Opposition Leaders Call for General Election Following Starmer’s Departure
Ten Years After Brexit Referendum, UK Faces Ongoing Political Fragmentation and Economic Debate
Nottingham University Hospitals Maternity Inquiry Exposes Severe NHS Failures
Met Office Issues Heat Health Alerts as United Kingdom Faces Record-Breaking Temperatures
Andy Burnham Emerges as Front-Runner for Labour Leadership After Starmer’s Resignation
Keir Starmer Resigns as UK Enters New Phase of Political Leadership Transition
UK Expands Alcohol Ban Enforcement Using Tagging Technology Ahead of World Cup
UK Invests £50 Million in Critical Minerals Supply Chain Security
UK Appoints Special Envoy on Preventing Sexual Violence in Conflict
UK Introduces Fines for Landlords of Unsafe Rental Properties
Reform UK Leads Opinion Polls as Immigration Debate Reshapes UK Politics
Police Investigate Edinburgh Attacks as Potential Hate Crimes
King Charles to Publish Personal Tax and Royal Household Financial Records
Nottingham University Hospitals Maternity Inquiry Report Set for Publication
Heat-Health Alerts Issued Across London and Southern England Amid Rising Temperatures
UK Economy Shows Pressure From Middle East Conflict Despite Modest Growth
Brexit Anniversary Reignites Debate Over UK Economic and Political Direction
UK Parliament Continues Legislative Work Amid Leadership Transition
Financial Markets Hold Steady After UK Leadership Shake-Up
Andy Burnham Enters Labour Leadership Race With Strong Parliamentary Backing
Keir Starmer Resigns as UK Prime Minister After Two Years in Office
Reform UK MP Lee Anderson to Raise Pension Concerns Over British Coal Staff Superannuation Scheme
UK Parliament to Debate Newborn Screening for Spinal Muscular Atrophy Following Public Petition
Met Office Warns of Water Safety Risks During Heatwave as Temperatures Peak in England
Treasury Increases Mileage Allowance Payments for 2026–27 Tax Year to 55 Pence Per Mile
UK Government Raises Electricity Generator Levy to 55 Percent in New Revenue Measure
House of Lords Moves Financial Services and Markets Bill to Committee Stage Amid Regulatory Scrutiny
Westminster Hall to Debate Petition on Pro-Israel Influence in UK Politics
UK Parliament Prepares for Estimates Days Debates as Backbench Business Schedule Approved
Armed Forces Bill Nears Final Stages in UK House of Commons With Military Justice Reforms
Donald Trump Comments on UK Political Situation, Citing Immigration and Energy Policy Concerns
Andy Burnham By-Election Victory Fuels Speculation Over Potential Labour Leadership Contest
UK Economy Shows Resilience but Faces Headwinds from Middle East Tensions, UK Finance Says
UK Parliament Opens Week of Debates on Net Zero, Security and Armed Forces Reform
Met Office Issues Amber Extreme Heat Warning as Temperatures Expected to Reach 35C Across England and Wales
Prime Minister Keir Starmer Faces Mounting Leadership Pressure After Makerfield By-Election Defeat
London Hotel Wins World’s Best Afternoon Tea Award at International Hospitality Guide La Liste
Court of Appeal Rules in Favour of Competition and Markets Authority in Phenytoin Drug Case
Chichester Waste Site Suspended After Environment Agency Finds Serious Fire and Pollution Risks
UK Appoints Chris Elmore as Special Envoy on Preventing Sexual Violence in Conflict
×