Key takeaways:
- Overall payment declines dropped from 18% to 12% in two years
- 23% of financially struggling consumers faced a decline in the past month
- Debit card declines now outnumber credit declines more than 3 to 1
Payment declines are becoming less common overall, but financially struggling consumers continue to face them at disproportionately high rates, according to a new PYMNTS Intelligence report.
The big picture: The share of consumers experiencing a payment decline in the previous 30 days fell from 18% to 12% between September 2022 and September 2024. This improvement could be attributed to advancements in technology that help prevent false declines and improved fraud detection by payment card companies.
Yes, but: Consumers living paycheck to paycheck with difficulty paying bills still face declines at nearly double the population-wide average. 23% of these financially struggling consumers experienced at least one decline in the previous month, down from 32% two years prior.
By the numbers:
- 9.1% of paycheck-to-paycheck consumers without bill-paying difficulties experienced a decline
- 6.3% of financially stable consumers encountered a decline
- Consumers living paycheck to paycheck with difficulty paying bills are nearly four times as likely to experience payment declines compared to financially stable individuals.
- Payment declines for essential purchases like groceries remain a challenge for struggling consumers, with 7.1% of grocery payments declined, which is 12 times higher than the rate among financially stable consumers.
- Debit card declines have risen, now outnumbering credit card declines threefold, partly due to the nature of debit — where insufficient funds are often unavoidable. The share of consumers who reported that their declined payment was on a debit card has increased by 40% since June 2022, while credit card decline rates have halved in the same period.
What they’re saying: “These trends highlight the financial tightrope that many consumers are walking,” says the PYMNTS report. “While new technologies are helping to reduce false declines, those living paycheck to paycheck continue to face challenges in managing their day-to-day expenses.”
