The Velera Payments Index: March 2025

​Velera – formerly PSCU/Co-op Solutions, the nation’s premier payments CUSO and an integrated financial technology solutions provider – published the March edition of the Velera Payments Index, the goal of which is to provide information and insights to help financial institutions navigate the evolving financial landscape to make informed, strategic decisions for their organizations and members.
 
Amidst an increasingly volatile political climate, consumer sentiment began waning in February on concerns of anticipated inflation increases, with impacts seen across all income levels within the U.S. economy. While growth in purchasing activity remained positive, February year-over-year results softened for both credit and debit activity. In our March 2025 edition of the Velera Payments Index, we revisit Delinquencies and examine differences by generations and credit scores.
 
The Consumer Confidence Index posted a sharp decline in February of 7.0 points to 98.3 (1985=100), and remains at the bottom range of monthly scores since 2022. Consumers’ view of the current labor market and future business conditions has weakened and they are less optimistic about future income. Present business conditions was the only metric to improve, which was up marginally. Influenced by the fear of tariff-induced price inflation, the University of Michigan Index of Consumer Sentiment fell in February by 10% to 64.7. While the drop was across all age and income levels, sentiment was unchanged for Republicans and fell for both Democrats and Independents, illustrating the differences related to current economic policies and the political landscape.
 
In the Labor Department’s March 12 update, the Consumer Price Index (CPI) increased 0.2% in February, bringing the cumulative 12-month rate of inflation down to 2.8%. The Shelter index accounted for nearly half of the February increase. Offsetting this increase was a 4.0% decrease in airline fares and a 1.0% decrease in the Gasoline index. Core CPI, which excludes the Food and Energy sectors, increased by 0.2% in February, bringing the 12-month Core CPI to 3.1%. Increases were seen in medical care, used cars and trucks, household furnishings and operations, and recreation. Decreases were seen in airline fares and new vehicles.
 
In February, jobs grew by 151,000, with increases in healthcare, financial activities, transportation and warehousing, and social assistance. The U.S. Bureau of Labor Statistics (BLS) reported the overall unemployment rate increased slightly for February to 4.1%, or 7.1 million people. This BLS survey was conducted during the second week of February, in advance of the job cuts from the Department of Government Efficiency (DOGE). It’s anticipated that the reduction in government jobs will not show up in the reports until later this spring.
 
The modestly positive jobs report and a reduction in inflation casts doubt on a near-term Fed interest rate cut, as there is positivity in the labor market, including a record high total in U.S. payrolls of 159.2 million jobs. While the next Federal Open Market Committee (FOMC) meetings will conclude on March 19, it may not be until the Fed’s May 7 or June 18 meetings where any rate reductions could materialize.
 
“As credit card delinquencies continue to rise, albeit at a slower pace than in previous years, credit unions must proactively support members facing financial hardship,” said David Knowles, SVP, Collections & Disputes and President, TriVerity at Velera. “With serious delinquency rates projected to reach 2.76% by the end of 2025 – driven by inflation, interest rates and ongoing economic uncertainty – credit unions should also consider the growing impact of Buy Now, Pay Later (BNPL) services, particularly among the youngest generations. By offering financial education, flexible repayment options and early intervention strategies, credit unions can help members manage debt responsibly and avoid deeper financial distress.”
 
Key takeaways for February include:

• Growth rates softened for credit and debit in February. On an adjusted basis (to account for the leap year in 2024), credit purchases were up 0.5% and debit purchases were up 5.7%. Credit transactions were up 0.7% and debit transactions were up 2.3%. Unadjusted (with one extra day in February 2024), credit purchases were down 3.4% and debit purchases were up 1.4%.
• Money Services maintained its position as the top contributor to growth in debit purchases, accounting for one-third of the year-over-year increase. The Goods and Services sectors represented the second- and third-largest impact for debit, respectively. For credit purchases, the Services sector was the largest contributor to growth for February. Within Services, insurance sales/premiums were the top merchant category.
• The 12-month CPI through February increased by 2.8%, down 0.2% from January. The Shelter index accounted for almost half of the overall increase and was up 0.3%. Core inflation, now at 3.1%, was up 0.2% for February. It’s unlikely there will be an interest rate change by the Fed on March 19, with the next opportunity for a change coming May 7.
• Delinquencies rose after bottoming out in May 2021 at 1.03%, but have remained stable since our last delinquency Deep Dive (February 2024). Overall credit card delinquencies for February 2025 were 2.49%, down 0.11% year over year. However, we also saw higher delinquency rates within the younger age demographics, as seen in the notable increase for the youngest generational segment (Gen Alpha), up 17% year over year to 4.96% for February 2025.

 
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.