The New Payments Playbook: Cards, Customers, & What’s Next

The payments industry is experiencing a profound transformation fueled by shifting consumer preferences, regulatory changes, and the introduction of numerous new technologies. From the decline of cash to the rapid adoption of digital wallets and real-time payments, the way individuals and businesses pay is evolving more quickly than ever before. In order to help community banks make sense of these changes – and to leverage them as part of a well-rounded payments playbook – we recently spoke with PRI’s Director of Payments Candace DeBarger and Consultant Michael Fuccillo, illuminating the complexities and opportunities found in the space.

Early Advances from Paper to Digital

For decades, card-based payments were a breakthrough in convenience and security over cash and checks. The 1980s and 1990s were marked by the rise of regional ATM and PIN networks, which enabled smaller community banks to remain competitive and broaden financial access. The industry has continued to consolidate over time, with many local networks merging into a handful of national players by the current decade. According to Candace DeBarger, “When I first started at Mastercard in the late ‘80s, ATM networks were really well entrenched, but there were over a hundred of them – now in 2025 there are only five.”

“Innovation in payments didn’t happen overnight,” explains Michael Fucillo: breakthroughs such as the magnetic stripe and smart cards emerged through a combination of necessity, regulation, fraud response, and consumer demand. And major security incidents, like the Target data breach of 2013, fueled the move to chip-enabled cards, reinforcing both consumer trust and industry compliance.

Digital Wallets, Mobile Payments, and Seamless Experiences

Today’s consumers expect frictionless, fast, and secure ways to pay – on any device, anywhere they shop. As a result, digital wallet adoption has surged. DeBarger highlights recent research from payments.com showing that approximately two-thirds of adults in the U.S. used a digital wallet in 2025, and over 90% of people aged 18-26 reported digital wallets as their primary payment method. Globally, digital wallets now account for nearly 30% of point-of-sale volume, a trend that is only accelerating. These mobile-first experiences and contactless payments have shifted from novelty to necessity, as retailers have learned that every second shaved off the payment process can translate to millions in additional revenue.

Fighting Friction and Offering Rewards

Friction in payments is any obstacle that slows or complicates a customer’s transaction – and quite plainly, “customers hate friction,” explains DeBarger. Whether it’s a slow in-branch account opening, a declined transaction due to erroneous fraud controls, or waiting several days for a new debit card, these annoyances create frustration and drive consumers to seek better options. Financial institutions are actively addressing these pain points through real-time approvals, instant card issuance, digital card issuance, and simplified dispute resolutions, making convenience and speed table stakes in payment experiences.

On the other hand,rewards programs continue to play a major role in how consumers choose their preferred payment methods. Cash-back cards, points, and other loyalty incentives are now expected from credit card programs. While rewards drive spending and card loyalty, they also present a balancing act for banks and issuers navigating the new payments landscape: Fuccillo suggests that “customers are likely to be slow to adopt card-free alternatives like pay-by-bank unless there is a strong incentive – and that’s where rewards can really make a difference.”

The New Wave of Modern Payment Methods

DeBarger points to Buy Now, Pay Later (BNPL) as a payment solution on the rise: over 90 million people in North America used this pay-over-time model last year. “But BNPL seems to attract those who are more in the fringe of credit worthiness and frankly may not be a bank’s target customer,” she adds: “it isn’t quite to mainstream yet.”

Another emerging payment is the stablecoin, a type of cryptocurrency that aims to maintain a stable value relative to a specified asset like the U.S. dollar. These and other cryptocurrencies are beginning to disrupt primarily the B2B space: corporate and global cross-border use cases heavily outweigh consumer stablecoin adoption.

The Path Forward

In today’s competitive payments environment, banks win with adaptability, integration, and a relentless focus on improving the customer experience. Fuccillo and DeBarger offer some actionable priorities for a future-proofed payments strategy:

• Appeal to changing preferences: Gen Z and Gen Alpha are spending money in drastically different ways than their predecessors. Make it a priority to get your cards into the digital wallets of not only your older adult customers, but also their children.
• Lean into P2P: In today’s smartphone-driven world, peer-to-peer (P2P) payments are gaining a stronghold, and institutions are wise to integrate them and other mobile-first solutions in their service offerings sooner than later.
• Continue to combat fraud: As perpetrators continue to get smarter, fraud remains a living part of both debit and credit card programs. However, if banks ensure a positive and seamless experience for consumers who are victims of fraud, it actually becomes an opportunity to generate loyalty.
• Watch emerging trends: Banks that fail to keep up to date on new product and technology developments are falling behind. One way to do this is by listening to your partners – processors, payment networks, and experts like PRI – in order to deploy the right products at the right time for your market.
• Don’t panic: The fast-paced evolution of the payments environment can seem overwhelming, but large-scale change doesn’t happen overnight. Consumers still love physical-plastic debit and credit cards, and banks who remain “good at the basics,” as DeBarger puts it, are far more likely to be able to adapt to change.

Payments are more than just transactions; they’re crucial touchpoints that define the relationship between consumers, merchants, and financial institutions. In 2026 and beyond, those who not only adopt new technology but also simplify payment journeys, address friction, and offer genuine value (whether through rewards, speed, or security) will stand out. Yet amid all this change, the fundamentals remain the same: trust, convenience, and adaptability are still the heart of an effective payments playbook.

###

About our experts:

PRI Director of Payments Candace DeBarger has over 39 years in financial services, including 30 years at Mastercard. She has a foundation in debit card operations and technology, project management, and product management. The latter half of her career has been spent working with financial institutions under $10B in assets, helping them to grow and manage their debit and credit card programs. Candace has a deep understanding of network profitability, card program KPIs, card marketing strategies and the connection between an engaged card user and profitable checking customer.

PRI consultant Michael Fuccillo is a payments industry professional whose experience spans over 30 years and includes positions with US Bank, Mastercard, PSCU and Equifax. With his extensive credit card industry knowledge, Michael delivers expert guidance to financial institutions navigating the complex credit card Issuing landscape. He is committed to helping financial institutions improve their credit card product offering, optimize operational efficiency, and maximize their credit card program profitability.

Resources:

Balancing Fraud Prevention and Profitability: Best Practices for Community Financial Institutions – PRI

2025 Global Payments Report – McKinsey

The Future History of Payments: How the World is Moving Away From Cash – Finastra

About PRI:

PRI specializes in identifying profitability improvement areas for financial institutions through revenue growth, cost control, streamlining processes, and effective use of technology. Contact us to learn more about our personalized approach to propel growth and improve profitability.