Mapping the $14 trillion US market: The growth (and trends) of digital consumer payments

• Card payments dominate: 77.86% of U.S. spending in 2023; projected to rise to 80.5% by 2028.

• Remote payments growing: Expected 61% increase in the next 5 years.

• Higher consumer spending calls for scalable payment solutions.

• Navigate the complexities of modern payment preferences with payment orchestration.

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In 2023, U.S. personal consumption expenditures (PCE) reached $18.823 trillion, with $14.655 trillion (77.86%) spent on goods and services, according to the Nilson Report. The majority of these transactions were made using card-based payments, and this trend is expected to continue. By 2028, card-based payments are projected to account for 80.5% of total purchase volume. This growth in digital payments is driven by the convenience, security, and technological advancements in card payments, such as Visa Direct and Mastercard Send.

In contrast, paper-based payments are on the decline, reflecting consumers’ increasing preference for digital and card-based options. This shift is part of the overall digital payments growth seen across the industry. Meanwhile, electronic payments are gradually gaining traction, particularly remote transactions like mobile payments through digital wallets and apps. These payment methods offer unmatched convenience, allowing consumers to make purchases from virtually anywhere. However, they also require robust security measures—such as tokenization, encryption, and multi-factor authentication—to mitigate fraud risks. Contactless payments, for example, now account for over two-thirds of in-person transactions on Mastercard’s network, highlighting their popularity for fast, secure, and convenient checkouts. 

In November 2024, U.S. disposable income grew by $61.1 billion (0.3%), with consumers spending an additional $81.3 billion on goods and services. Notable spending increases were seen in motor vehicles, recreational goods, and services such as healthcare and financial services. This uptick in consumer spending, especially in sectors like retail, automotive, and entertainment, signals growing transaction volumes and the need for payment solutions that can efficiently handle these demands.

Businesses in these sectors will need scalable payment systems to support higher transaction volumes. As consumer spending increases, so too does the need for adaptable, secure, and efficient payment solutions that can keep up with the rising demand.

The projected 61% increase in remote payments over the next five years aligns with the continued growth of digital payments and presents a significant opportunity for merchant-serving businesses. As consumers increasingly embrace mobile wallets, digital banking apps, and online payment systems, businesses must equip merchants with flexible, scalable solutions that support multi-channel integration, international transactions, and secure, seamless payment experiences. This shift also highlights the need for infrastructure that can handle higher transaction volumes and support subscription-based models, which are becoming more prevalent. By staying ahead of these trends and offering innovative, frictionless payment solutions, merchant-serving businesses can help merchants adapt to evolving consumer demands and remain competitive in the growing digital-first payments landscape.

Here's a checklist for merchant-serving businesses to plan the next 5 years of their POS strategy for their merchants:

• Keep analysing consumer payment preferences in the store
• Keep analysing consumer payment preferences overall (Anticipate the 61% projected increase in remote payments and the future of digital payments)
• Offer multi-channel payment solutions
• Stay updated on regulations and new payment technology
• Stay compliant with the relevant industry security standards (PCI-DSS)
• Allow quick adaptation to new POS innovations
• Focus on analytics and reporting tools 

This is where in-person payment orchestration becomes essential. Remember the frustrated customer who had to walk away from their purchase because mobile payments weren’t accepted? That kind of missed opportunity happens every day, costing businesses the sale, and more than likely, the repeat business.

For businesses that serve merchants, offering in-person payment orchestration is a smart way to help them keep up with changing payment habits. By providing systems that support multiple payment methods, businesses can actively meet the growth in digital payments head on and avoid lost transactions. As payment technology continues to evolve, merchants need solutions that can grow with them. A strong payment orchestration system makes it easier to introduce new payment options, handle larger transaction volumes, and operate smoothly across different sales channels. This kind of adaptability builds customer loyalty and keeps merchants competitive.

Aevi are the in-person payment exports that provides a cloud-based platform that seamlessly connects card-present and card-not-present commerce. Check it out here.