News from the Wire

July edition of the Velera Payments Index published

Thursday, July 17, 2025 — 16:35:42 (UTC)

St. Petersburg, Fla., July 17, 2025—Today, Velera – the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the July edition of the Velera Payments Index:

Consumer spending remained slow in June, with debit card activity declining from its peak in January as the downward trend continues. Inflation has started to impact consumer prices, as the CPI rose 0.3% in June. Tariff-sensitive goods, including furniture, toys and clothing, posted higher prices in June, with consumer goods again having the highest contribution to growth in June 2025 for debit purchases. For credit purchases, the Service sector had the highest contribution, with insurance premiums leading the increase. In our July 2025 edition of the Velera Payments Index, we present our quarterly metrics update that includes credit card balances, delinquencies and mobile wallet activity.

The Consumer Confidence Index decreased in June, down 5.4 points to 93.0. Sentiment on both current and future conditions contributed to the broad decline, erasing roughly half of the sharp increase from the prior month. While sentiment on job availability remained in positive territory, it weakened for the sixth consecutive month among all age groups and most income levels. The June 2025 University of Michigan Index of Consumer Sentiment increased for the first time in six months, finishing at 60.7, well below both December 2024 (74.0) and June 2024 (68.2).

In the Labor Department’s July 15 update, the Consumer Price Index (CPI) increased 0.3% in June, bringing the cumulative 12-month rate of inflation up to 2.7%. Shelter, which continues to account for a significant portion of the monthly increases, was up 0.2% in June. The energy index increased 0.9% in June, while the food index increased 0.3%. Core CPI, which excludes the Food and Energy sectors, increased by 0.2% in June following a 0.1% decrease in May, bringing the 12-month Core CPI to 2.9%.

Jobs grew by 147,000 in June, with increases in state government and healthcare, contrasted by a decline in jobs with the Federal Government. ADP reports that in June, 33,000 private sector jobs were lost — despite an anticipated increase of 100,000 new positions — marking the first decline in private sector jobs since March 2023. Reductions noted by ADP were in the professional and business services areas, as well as the education and health services areas. New job figures were upwardly revised for April and May, adding an additional 16,000 new positions for the two-month period. The U.S. Bureau of Labor Statistics (BLS) reported that the overall unemployment rate for June decreased by 0.1% to 4.2%, or 7.0 million people. The labor force participation rate dropped to 62.3% — its lowest since 2022 — which may be influenced by the immigration crackdown.

On July 4, 2025, President Trump signed into law the “One Big Beautiful Bill” Act, a cornerstone piece of legislation. While there are numerous provisions in the new law, a few components that will impact consumers include making the expiring tax cuts from Trump’s first term permanent, along with new campaign-promised tax cuts that include no tax on tips or overtime wages with a maximum $12,500 deduction, as well as a $6,000 tax deduction for most seniors that will deliver no taxes on Social Security benefits. The benefits of these changes will materialize over time, mainly with the filing of 2025 income taxes. The new law also includes the elimination of electric vehicle and rooftop solar panel tax credits by the end of 2025. Medicare, Supplemental Nutrition Assistance Program (SNAP) and the Affordable Care Act also have adjustments to various provisions that could cause a ripple effect on consumer spending activity. We will monitor these implications over time.

Tariffs continue to be a part of the news cycle, with ever-shifting dates and percentages. Through the publishing of this edition, many of the key trade deals now have an effective date of Aug. 1, 2025. Consumer spending implications resulting from proposed trade tariffs will be better understood once more concrete dates, percentages and products are finalized.

While many economists expect interest rates to remain unchanged after the Federal Open Market Committee (FOMC) meeting that concludes on July 30, the odds of a rate cut following the Sept. 17 meeting are increasing.

“As economic headwinds and tariff-related price pressures ripple through the economy, we're starting to see a shift in how households manage day-to-day spending – notably in the continued decline of debit activity since its peak in January,” said Denise Stevens, executive vice president, chief product officer, Velera. “For credit unions, this presents both a challenge and an opportunity: to support members facing tighter budgets while adapting to evolving financial behaviors. Now is a pivotal time to reassess member engagement strategies and ensure that products and services are aligned with changing spending patterns and liquidity needs.”

Key takeaways for June include:

Growth remained slow for credit and debit in June, with debit trending downward. Debit purchases were up 3.6%, with the Goods and Money sectors contributing to 80% of the growth. Credit purchases were up 1.3% with the Services sector comprising the entire increase, fueled by insurance premiums. For June, debit transactions were up 2.2% and credit transactions were up 1.1%.

The 12-month CPI through June increased by 2.7%, up 0.3% from May. The Shelter index continues to contribute significantly to the monthly increase, up 0.2 percent in June, while the Energy index increased by 0.9 percent. Core inflation, which excludes food and energy, is up 0.2% at 2.9% for June.

Overall credit card balances were down for the first time in Payments Index reporting. While the rate of growth has been in decline since its peak in September 2022, year-over-year growth in overall balances was down 0.6% for June 2025. Average credit card balances have been very flat for each month of 2025, with June finishing at $2,949.

The full report is available for download here or can be shared as a PDF upon request. Please let us know of any questions or additional needs, or if you’d like to coordinate an interview.

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Source: Company press release.

Categories: Reports and research