A consumer does not have to stop spending to become more careful about money.
Debit spending offers a closer look at how consumers are balancing everyday expenses with travel and entertainment, according to Max Spivakovsky, senior director of global payments risk management at SoFi Tech Solutions.
“Debit really deserves its own spotlight,” Spivakovsky told PYMNTS. “It shows us how people are managing their available cash that they actually have in their accounts right now.”
SoFi Tech Solutions’ Q2 Debit Spend Index offers examples of the decisions taking place inside that spending. Grocery trips increased by close to 13% from the first quarter, while the average amount spent per trip fell 3%. Fuel spending rose 28%, while travel spending increased 21% and spending on experiences rose 23%.
Spivakovsky described the grocery behavior as consumers “managing their cash flow by shopping more but buying smaller baskets.” Yet higher spending on travel and experiences suggests households were still making room for discretionary purchases while absorbing higher essential expenses.
For financial institutions, the value lies in seeing how those choices are knit together.
Getting a Card Into the Customer’s Digital Life
The same principle applies when banks and FinTechs launch cards.
Issuing a new card does not guarantee that customers will make it part of their regular spending. Spivakovsky pointed to saved credentials as an indication of how payment habits are changing. Card-on-file payments represented almost 25% of debit purchases and more than 30% of debit spending in the company’s Q2 data. Saved-card transactions also carried an average purchase of close to $60, compared with $37 for debit transactions overall.
Those patterns change the job facing an issuer after a card is launched.
The goal, he said, is “getting this card loaded into the digital places where the consumer already spends their time.” Making it easy to add a card to a digital wallet and save it in frequently used eCommerce applications helps move the card from the customer’s pocket into everyday activity, according to Spivakovsky.
Saved credentials also provide information about the broader customer relationship. A consumer who takes the time to store a debit card with a favored app or service is making the underlying account easier to use repeatedly.
Spivakovsky said providers should respond by widening their view of the customer.
“Providers shouldn’t be just looking at isolated transactions anymore,” he said. “They need to combine those spending patterns, the entire spending activity of the customer with what they already know about their customers’ lives.”
That broader view can inform benefits, services and offers based on how customers actually use their accounts instead of treating each purchase as a separate event.
Visibility, Flexibility and Control
For customers who are watching their finances carefully, Spivakovsky said product design comes down to “three things: visibility, flexibility and control.”
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“When folks are feeling financially cautious, the absolute last thing they want to see is a surprise,” he said.
Technology can turn those principles into account features. Spivakovsky cited dynamic balance updates, categorized spending insights, instant alerts and automated budgeting tools as ways to help customers understand what they have available.
“If I’m buying a coffee, I want my app to reflect this instantly,” he said.
He also pointed to savings vaults that automatically set money aside, and benefits tied to purchases customers already make. In the company’s research, about 20% of consumers said they would switch cards for better benefits.
The common thread is control over money already moving through the account.
Technology Behind the Customer Experience
Those capabilities depend on what sits behind the app.
Spivakovsky argued that a period of uncertain consumer confidence is a reason for financial institutions to invest in their underlying systems because real-time account information requires technology capable of processing transactions and updating ledgers without lengthy delays.
“When economic confidence wavers, this is exactly when financial institutions need to double down on upgrading, enhancing their core technologies,” he said.
Risk management is part of the same technology equation. Spivakovsky cited device intelligence, customer notifications, SMS verification and silent authentication as ways to protect payments while limiting unnecessary interruptions for legitimate customers.
A false decline on a grocery purchase caused by an overly restrictive fraud rule, he said, creates a poor experience for someone already paying close attention to household expenses. Connections to instant payment rails can provide another form of flexibility by giving consumers faster access to money through uses such as gig payouts and rapid tax refunds.
For banks and FinTechs deciding what to build, both technology and consumer activity should guide “how the technology [is] deployed,” Spivakovsky said.
Watch the full interview with Max Spivakovsky to learn more about:
- What debit spending reveals about how consumers manage available cash.
- How saved cards are changing the way banks and FinTechs should approach card programs.
- Why Spivakovsky sees visibility, flexibility and control as priorities when consumers become financially cautious.
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