Half of Low-Income Customers Use Debit and PayPal to Make Payments


When comparing the preferred payment methods of those who are financially secure to those who are having trouble paying their bills, it is frequently a tale of living strictly within one’s means or having the freedom to use one’s bank’s money, as is the case when defining the difference between credit and debit use.

Based on surveys of more than 2,700 U.S. consumers, we explore this in the research Digital Economy Payments: The Rise of Digital Wallets and find that the split is well shown by the preferred cards used by customers who reside at various points along the financial lifestyle spectrum.

In December 2022, high-income customers—those making over $100,000—were far more likely to pay using a credit card than were low-income consumers.

Our Q4 2022 data shows that “low-income customers spend more than half of the total amount on all retail transactions using debit cards and cash.” Debit cards predominate for daily necessities like groceries, leaving a limited opportunity for alternative payment methods, according to a closer examination of those purchases.

In the last year, consumers paid using debit cards for 43% of grocery retail transactions made in-person and 40% of grocery retail sales made online. This quarter, both online and in-store grocery retail was still 31% dominated by credit cards.

The research reveals that middle- and high-income customers tend to use credit cards heavily, covering more than one-third of their retail spending with them.