More Than 4 in 10 Digital Bank Users Prefer Wallets Over Cards

Digital bank customers are not just experimenting with new payment methods. They are increasingly reshaping what mainstream payments behavior looks like, particularly as mobile-first consumers lean into digital wallets and become more comfortable moving money directly from bank accounts.

The PYMNTS Intelligence report, “Pay by Bank Deep Dive: Digital Bank Users Are Ready to Switch,” found that consumers using digital-first financial institutions already exhibit many of the behaviors associated with Pay by Bank adoption, including reliance on tokenized payments, mobile commerce and login-based authentication flows.

The report, conducted with Trustly and based on a survey of 2,071 U.S. consumers, showed that digital bank users are not necessarily abandoning traditional payment methods entirely. But they are significantly more likely than other consumers to embrace alternatives to physical cards when incentives and protections are in place.

Among the findings:

44.6% of digital bank customers prefer using digital wallets, roughly double the rate seen across the broader banking population.

52.2% of digital bank users earn less than $50,000 annually, compared to 30.8% of the broader sample.

72% of consumers said Pay by Bank could replace debit cards if rewards and buyer protections were offered.

That behavior extends across spending categories. More than half of digital bank users said they prefer wallets for rideshare purchases, while 60.3% use them for gambling-related transactions. Wallets also lead for subscriptions and retail purchases among this group.

The findings suggest consumers who bank digitally are already acclimated to payment experiences that prioritize speed, embedded authentication and app-based financial management rather than physical credentials.

Younger Consumers Push Digital Banking Into the Mainstream

The demographic makeup of digital banking customers also stands apart from the broader banking population.

According to the report, 56% of consumers using digital banks as their primary financial institution are millennials or Gen Z, compared to 45% across all banking customers. Millennials alone account for 38% of digital bank users.

Income trends also diverge sharply. More than half of digital bank customers earn less than $50,000 annually, while just 6.7% report household incomes above $150,000.

Across all banking types, immediate cash benefits ranked as the top reason consumers would consider using Pay by Bank. Buyer protections ranked second. Among digital bank users specifically, 43.1% cited immediate cash benefits as the biggest driver.

At the same time, roughly one-quarter of consumers said nothing would increase their interest in Pay by Bank, underscoring the limits of incentives alone.

Pay by Bank’s Opportunity Centers on Debit Replacement

The report frames Pay by Bank less as a direct challenger to credit cards and more as a potential substitute for debit transactions.

That positioning reflects how consumers already think about direct-from-account payments. According to the findings, only 12.2% of consumers currently view Pay by Bank as a substitute for debit cards today. However, another 60%-plus said they would reconsider if rewards, buyer protection or both were attached to the experience.

Consumers overall said they would shift 25.3% of account-to-account transactions to Pay by Bank if discounts and protections were offered. Among digital bank users, that figure climbs to 35.4%. Bill payments also showed elevated switching potential, reaching 32% among digital bank customers.

For digital banking customers already accustomed to app-driven financial management, the behavioral leap may be smaller than many payment providers previously assumed.