In a dynamic payments market, debit cards can be a bit staid. However, consumers continue to favor their reliability over cash, making them an increasingly popular choice for digital payments in mobile wallets. This year, debit payments are set to advance their digital capabilities, adopt real-time payment use cases, and drive pay-by-bank adoption.
In the 2025 Debit Payments Trends report, Elisa Tavilla, Director of Debit Payments at Javelin Strategy & Research, explores the evolving use cases for debit cards and examines their role in the future of real-time payments and open banking.
The Digital Option
Integrating debit cards into mobile wallets will be one of the most important trends in the space in 2025. Issuers will need to support digital debit payments, and offering rewards can help sweeten the deal for loyal debit card users.
“As an issuer, being able to provide your card instantly through digital channels to your customers is important, especially to maintain top-of-wallet positioning, meaning being the primary card that the customer uses,” said Tavilla. “Unlike credit cards, most consumers only have one debit card because it’s typically linked to their primary checking account. Debit cards continue to be the primary way to access funds in their checking account.”
It’s inevitable that these cards will increasingly make their way into digital wallets. With push provisioning technology already in place, customers can add their debit card to a digital wallet.
With the growing use of digital wallets, half of issuers plan to adopt the emerging technology of digital debit card issuance. Digital issuance enables issuers to push debit card credentials directly into customers’ digital wallets, providing instant access to their primary account number, expiration date, and CVV. This allows customers with lost or stolen cards, as well as new customers, to immediately use their debit cards for online and in-person purchases.
In addition to improving customer satisfaction, issuers benefit from savings on expedited shipping for new plastic cards, retaining top-of-wallet status, and gaining incremental spending.
The Lure of Real Time
Real-time payments will continue to expand their influence in everyday transactions. As FedNow and RTP adoption expands, financial institutions are discovering more use cases for instant payments. Consumers and businesses alike now expect real-time payment services that improve how they transact and move money.
“People are used to immediacy and convenience in everything,” said Tavilla. “Having to wait multiple days to have your money moved from one account to another account seems inconvenient.”
Consumers are responding positively to faster options, whether for paying bills or transferring funds between investment accounts. A Fed study found that younger customers see the value of expedited services and are willing to pay for them.
Moving into Open Banking
Open banking has the potential to drive a transformation in pay-by-bank and account-to-account (A2A) payments. Pay-by-bank has already been revolutionizing the A2A payments experience by eliminating manual processes and providing a seamless, secure, and potentially lower-cost payment option for consumers and merchants.
Pay-by-bank allows merchants to deepen relationships and tailor loyalty rewards with personalized customer data. Additionally, merchants are eager to reduce the fees associated with card payments.
However, for consumers to adopt this technology, they need a compelling value proposition. Consumers place high value on and expect loyalty rewards, especially those offered with card payments.
Open banking gives financial institutions greater visibility into customers’ payment behavior and transactions. FIs can efficiently aggregate critical customer data from multiple sources to enhance their product offerings, create new services and solutions, and improve their customers’ financial needs.
Instant payments significantly improve the customer experience. ACH transactions, which can take several days to process, often create friction for customers. They face the risk of insufficient funds in their accounts and must plan more carefully around their available balance, as the process is not necessarily real-time.
Walmart’s Gambit
Walmart has begun offering real-time pay-by-bank options for its online customers. Customers using pay-by-bank will see the transaction reflected in their account balance instantly, and Walmart will receive the funds immediately. The system could become a bellwether for other retailers to provide this service.
“The Walmart real-time payment option provides a better user experience than previously with ACH, but unless there’s any kind of incentive like cash back rewards or discounts that can drive adoption, I don’t really see a compelling reason that people would be running to use it,” said Tavilla. “If someone like Walmart can pull it off, it could have significant influence. As an industry leader in the retail space, if they can do it, other merchants of varying sizes can follow suit.”
Pay-by-bank is gaining traction in other markets, particularly in the UK. Major card networks, like Mastercard and Visa, are making further inroads into pay-by-bank as well. Tavilla recently returned from Thailand, where instant pay-by-bank payments have become widely popular, even among street vendors, via QR codes.
This adoption was driven by very practical concerns. Due to hygiene concerns arising from the pandemic, people were hesitant to handle cash with their bare hands. Additionally, the government provided disbursements to help citizens through the pandemic. To receive these payments, Thai citizens were required to set up a bank account, and funds were directly deposited through PromptPay, Thailand’s real-time payments rail. To support the process, the government offered subsidies to merchants to incentivize accepting instant digital payments.
“I was very impressed,” said Tavilla. “Everybody was using it, from my teenage cousins to my octogenarian aunt and uncle.”
This example shows how quickly debit payments can evolve if the landscape is right. “There’s a lot of potential in improving customer experience and opportunities for innovation in debit payments,” Tavilla said.
