The Next Battle in Credit Won’t Be for Top of Wallet

Top of wallet.

Issuers built elaborate rewards architectures to win it. Travel points. Cash back ladders. Category bonuses. Limited time offers designed to nudge one card ahead of another in the consumer’s mental stack.

But the data tells a different story about what consumers are actually trying to do when they reach for a card.

Many aren’t trying to maximize rewards. They’re trying to manage their money.

Every household in America is running a balance sheet, whether they think about it that way or not. Paychecks arrive on one schedule. Bills arrive on another. Unexpected expenses show up whenever they feel like it. Consumers are constantly managing the gap between those three things, sometimes consciously, often on autopilot.

The credit industry has spent decades competing for something consumers were never actually optimizing for.

Credit cards, Buy Now Pay Later, store cards, debit-linked installments, promotional financing. None of these are competing products in the consumer’s mind. They’re tools. Different tools for the same job. Keeping the household financial engine running.

The industry built an ecosystem around winning a choice that consumers weren’t ever really making the way the industry assumed they were.

And now, just as intelligent agents are about to take over the payment decision entirely, that assumption is about to be cracked wide open.

The Consumer Is Already There

The conventional narrative frames credit as a battle between BNPL upstarts and “old school” credit cards. Disruption versus legacy. New versus old.

The data doesn’t support that story.

PYMNTS Intelligence research of a national sample of 2,980 consumers in January 2026 shows that 31% of U.S. consumers used credit card installment plans in the prior three months. Just 12% used BNPL. Seven in 10 used a general-purpose credit card for at least one purchase.

That three-to-one “Buy Now Pay Later” gap has held across multiple survey waves and across every generation, including Gen Z, the generation BNPL was purpose-built for. More than four in ten Gen Z consumers report using credit card installments. Millennials show a similar pattern.

If consumers were chasing the newest, shiniest thing at checkout, BNPL would dominate. It doesn’t.

Consumers are choosing options to best manage their cash flow.

Why? Because consumers aren’t chasing novelty. They’re optimizing for flexibility at checkout and choosing options to best manage their cash flow. Installments inside a credit card account let consumers restructure a purchase into predictable payments, against an already approved credit line, while keeping the broader credit relationship intact. BNPL does that too, especially for smaller purchases or consumers who want to keep their credit lines available for emergencies. But it’s one tool in a kit, not the whole kit.

Consumers behave like sophisticated financial managers. The industry just hasn’t thought of consumers and their use of credit in much the same way.

The Myth of Top of Wallet

Here’s where the top-of-wallet strategy goes sideways in an agentic world.

Most consumers don’t have one card. They have a portfolio. A high-limit card for working capital flexibility. A corporate card for travel. A store card for promotional financing. A BNPL account used like a debit card for everyday essentials and smaller purchases that don’t need to touch existing credit lines. They move between these tools depending on the size of the purchase, where they are in the pay cycle, and what the merchant is offering. Which card has open credit to buy? Which one has the promotional rate? Is it worth opening a  a new account to get the 10% off at checkout?

Top of wallet becomes irrelevant when the agent doesn’t care which card is on top.

The industry called winning that mental game “top of wallet.” Rather than decide, just default to the card that does the best job most of the time.

That assumption is about to be upended. Once intelligent agents start executing payment decisions, they won’t optimize for habit or brand loyalty, unless the consumer puts it in the prompt. They’ll optimize for the best financial outcome. The best rate. The best terms. The best fit for the consumer’s finances at that specific moment.

Top of wallet becomes irrelevant when the agent doesn’t care which card is on top.

Consumers Already Built the Stack

Long before anyone in the industry started talking about agentic commerce, consumers had already jerry-rigged their own manual version of it.

From the industry’s perspective, credit cards, installment features, store cards, BNPL and merchant promotional financing compete with each other. From the consumer’s perspective, they solve different problems. A revolving line absorbs unexpected expenses and bridges pay cycles. Card installments convert big purchases into structured payments without opening a new account. BNPL typically handles smaller-dollar purchases with predictable repayment. A grocery purchase late in the pay cycle goes on one account to preserve cash. A furniture purchase gets converted to an installment plan. A merchant promotion routes the purchase to embedded financing.

Consumers are already doing sophisticated cash flow routing.

Consumers are already doing sophisticated cash flow routing. They’re just doing it manually, with incomplete information, under time pressure.

What looks like fragmentation to the industry is a consumer’s personal credit stack. The next phase of the ecosystem won’t replace it. It will automate it.

One Credential, Many Jobs

Here is where the real disruption sits.

Think about what a smart credential could actually do. A single account could create access to the credit optionality that consumers already collect in their physical or virtual wallets. And at the moment of purchase it could evaluate every available credit alternative and pick the right one for that moment in time. Pay now and take the cash back. Convert the purchase to an installment and protect short-term cash flow. Apply the merchant’s promotional financing and pay nothing for six or 12 months.

Draw on a revolving line when flexibility matters more than cost. Sort of like a credit waterfall, using real-time underwriting and intelligence intended to improve cash flow for the consumer.

The same checkout moment. Completely different economics depending on what the consumer needs and what the merchant, issuer or brand is willing to offer to close the sale.

This is not a thought experiment. The building blocks already exist.

This is not a thought experiment.  The building blocks already exist. Issuers already embed installment features inside credit card accounts. Merchants already offer promotional financing to drive conversion on big-ticket purchases. Acquirers are enabling agentic underwriting for BNPL players to make more predictive credit offers and decisions. Card networks are enabling issuers to create flex accounts that turn purchases into “pay now, a little later or a lot later” based on user-established parameters. BNPL players are enabling access to their rails and merchant networks for existing banks and credit union debit cards.

The next step is having a credential that becomes smart enough to assemble those options in real time, present the best one, and execute it without the consumer having to figure it all out.

So, What Happens to Rewards in an Agentic World?

Rewards programs were built on a single promise. Give consumers something they value, and they will change their behavior. Carry this card. Use it here. Reach for it first. The points and miles and cash-back percentages were about influencing behavioral preference at scale.

If agents make the payment decision, that behavioral lever largely disappears. The agent isn’t susceptible to aspirational travel advertising. It doesn’t have a favorite airline or a loyalty to a particular hotel chain, unless it is mentioned in the user prompt. It runs the numbers.

That doesn’t mean rewards go away entirely. It means they have to earn their place in the decision differently. The rewards programs that survive this shift will be the ones that convert from lifestyle marketing into real-time financial value that improves cash flow for the consumer.

For merchants, the agentic payment model could become the most direct line to conversion they’ve ever had. Today, merchants spend billions trying to influence consumers before they get to checkout, through advertising, promotions, loyalty programs, and brand building that may or may not move the needle. Most of that spending happens before the consumer has decided to buy, which means most of it simply hopes for the best, even with using the best of targeting tech.

If the agent is making the payment decision based on what produces the best outcome for the consumer, merchants have a direct path to influencing that decision through offers embedded in the transaction itself. A promotional rate that makes a big purchase affordable. An instant rebate that improves the consumer’s cash position today. A financing structure that converts a hesitant browser into a buyer. Rewards that show up as real money at checkout rather than as aspirations to be redeemed someday.

Brands get a version of this too, and something even more valuable on the side: first party data on what actually drove the purchase. Not survey data. Not modeled attribution. Real transaction data showing which offer, at which moment, converted which consumer. For brands that have spent years trying to measure whether their marketing actually works, that is worth considerably more than the cost of funding the offer.

Merchants bid to be the most attractive option at the moment of payment.

The issuer that builds that credential becomes the platform that sits between merchant intent and completed transaction. Think of it as the Google AdWords model applied to checkout. Instead of bidding to appear at the top of a search results page, merchants bid to be the most attractive option at the moment of payment, funding offers that make their product the one the agent selects.

Google built one of the most profitable businesses in history by owning that auction dynamic for attention. The issuer who owns it for transactions is sitting on something just as valuable. And unlike a traditional rewards program, this model turns merchant and brand marketing budgets into revenue. That is a very powerful place to sit.

The Cash Flow Buffer Is the Strategy

Total consumer credit outstanding has surpassed $5 trillion. The usual headlines call it a debt crisis. Look more carefully and you see something else.

Revolving credit growth has slowed, but more consumers are maintaining balances rather than paying them down completely. That’s not a sign of financial distress. It’s a sign of deliberate financial management. Consumers are keeping credit available, maintaining a buffer they can draw on when something unexpected happens. In corporate finance, you’d call that maintaining access to a working capital facility. The household version looks exactly the same.

Consumers are keeping credit available.

PYMNTS’ Consumer Expectations Index shows a roughly 20-point confidence gap between financially stable households and those living paycheck to paycheck. That gap isn’t just about sentiment. It has real-world implications.  Consumers with cash flow constraints rely more heavily on credit tools that help them smooth cash flow between pay periods.

Which means this isn’t niche behavior or a sign of financial mismanagement. Managing cash flow with credit is what everyone is doing, all the time, across every income level and every generation. Whether that person is living paycheck to paycheck or not.

Why the Future of Credit Is Cash Flow

Consumers have been running their own cash flow optimization engine for years. They do it with imperfect tools and incomplete information. They do a pretty good job of it despite the friction.

In an agentic commerce world, what’s changing isn’t the consumer’s job. The household CFO isn’t getting replaced.

What’s changing is the assistant they now have to help them.

The next era belongs to the credential they never have to think about.

For decades, the credit card industry competed to sit at the front of the wallet. Rewards were lures. Win the top of the stack, and you win most of the spend.

Agents will call balls and strikes differently. Based on how well they improve the cash flow position of the consumer making the purchase. Not where a card is in the wallet stack.

The industry spent decades competing to be the card consumers remembered. The next era belongs to the credential they never have to think about, because it is always doing the thinking for them.

 

Until NEXT time.

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PYMNTS CEO Karen Webster is one of the world’s leading experts in payments innovation and the digital economy, advising multinational companies and sitting on boards of emerging AI, healthtech and real-time payments firms, including a non-executive director on the Sezzle board, a publicly traded BNPL provider.

She founded PYMNTS.com in 2009, a top media platform covering innovation in payments, commerce and the digital economy. Webster is also the author of the NEXT newsletter and a co-founder of Market Platform Dynamics, specializing in driving and monetizing innovation across industries.