Saudi Press

Saudi Arabia and the world
Thursday, Oct 02, 2025

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

Saudi Press
0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Trump Organization Teams with Saudi Developer on $1 Billion Trump Plaza in Jeddah
Electronic Arts to Be Taken Private in Historic $55 Billion Buyout
Colombian President Petro Vows to Mobilize Volunteers for Gaza and Joins List of Fighters
Nvidia and Abu Dhabi’s TII Launch First AI-&-Robotics Lab in the Middle East
UK, Canada, and Australia Officially Recognise Palestine in Historic Shift
New Eye Drops Show Promise in Replacing Reading Glasses for Presbyopia
Dubai Property Boom Shows Strain as Flippers Get Buyer’s Remorse
Top AI Researchers Are Heading Back to China as U.S. Struggles to Keep Pace
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
UAE-US Stargate Project Poised to Make Abu Dhabi a Global AI Powerhouse
Trump and Starmer Clash Over UK Recognition of Palestinian State Amid State Visit
Saudi Arabia cracks down on music ‘lounges’ after conservative backlash
Saudi Arabia Signs ‘Strategic Mutual Defence’ Pact with Pakistan, Marking First Arab State to Gain Indirect Access to Nuclear Strike Capabilities in the Region
Sam Altman sells the 'Wedding Estate' in Hawaii for 49 million dollars
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
Kuwait opens bidding for construction of three cities to ease housing crunch.
This Week in AI: Meta’s Superintelligence Push, xAI’s Ten Billion-Dollar Raise, Genesis AI’s Robotics Ambitions, Microsoft Restructuring, Amazon’s Million-Robot Milestone, and Google’s AlphaGenome Update
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
Could AI Nursing Robots Help Healthcare Staffing Shortages?
Turkish authorities seize leading broadcaster amid fraud and tax investigation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Did the Houthis disrupt the internet in the Middle East? Submarine cables cut in the Red Sea
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
Tether Expands into Gold Sector with Profit-Driven Diversification
Trump’s New War – and the ‘Drug Tyrant’ Fearing Invasion: ‘1,200 Missiles Aimed at Us’
At the Parade in China: Laser Weapons, 'Eagle Strike,' and a Missile Capable of 'Striking Anywhere in the World'
Information Warfare in the Age of AI: How Language Models Become Targets and Tools
Israeli Airstrike in Yemen Kills Houthi Prime Minister
After the Shock of Defeat, Iranians Yearn for Change
YouTube Altered Content by Artificial Intelligence – Without Permission
Iran Faces Escalating Water Crisis as Protests Spread
More Than Half a Million Evacuated as Typhoon Kajiki Heads for Vietnam
HSBC Switzerland Ends Relationships with Over 1,000 Clients from Saudi Arabia, Lebanon, Qatar, and Egypt
Sharia Law Made Legally Binding in Austria Despite Warnings Over 'Incompatible' Values
Dogfights in the Skies: Airbus on Track to Overtake Boeing and Claim Aviation Supremacy
Tim Cook Promises an AI Revolution at Apple: "One of the Most Significant Technologies of Our Generation"
Are AI Data Centres the Infrastructure of the Future or the Next Crisis?
Miles Worth Billions: How Airlines Generate Huge Profits
Zelenskyy Returns to White House Flanked by European Allies as Trump Pressures Land-Swap Deal with Putin
Beijing is moving into gold and other assets, diversifying away from the dollar
Cristiano Ronaldo Makes Surprise Stop at New Hong Kong Museum
Zelenskyy to Visit Washington after Trump–Putin Summit Yields No Agreement
×