How Automation Is Quietly Draining New Yorkers' Wallets

Got story updates? Submit your updates here. ›

A new report from the Consumer Financial Protection Bureau projects that the total value of digital wallet tap-to-pay transactions in the U.S. will grow by more than 150% by 2028, as younger consumers move seamlessly through digital payments. However, this growth in automation can also create distance between people and their money, making it easier for small, recurring expenses to go unnoticed and add up over time. The average New Yorker carries $56,590 in debt, ranking 11th highest in the nation for household debt, and the city's high cost of living makes it harder for residents to save.

Why it matters

As digital payments become more ubiquitous, New Yorkers risk losing touch with their personal finances. Automation can streamline finances, but it can also obscure spending and make it harder to save. This trend has contributed to high debt levels and low savings rates in the city, underscoring the need for better financial management strategies.

The details

Younger consumers are increasingly relying on digital wallets and tap-to-pay transactions for everyday purchases, from coffee to deli runs. This shift follows decades of growth in credit and debit card usage, with 76% of U.S. households holding a credit card by 2021 and 87% adopting debit cards. However, the convenience of these automated payment systems can also create distance between people and their money, making it easier for small, recurring expenses to go unnoticed and add up over time. Nate Hobson, national sales director of advisor network at Mutual of Omaha, warns that 'over-automation can reduce the level of engagement people have with their finances.'

• The total value of digital wallet tap-to-pay transactions in the U.S. is projected to grow by more than 150% by 2028.
• In 1970, just 16% of U.S. households held a credit card, compared to 76% by 2021.
• As of 2021, 87% of U.S. households had adopted debit cards.

What they’re saying

What’s next

Consumers can take several steps to better manage their finances in the face of increasing automation, including automating essential expenses like rent and utilities, setting up automatic savings transfers, regularly reviewing account statements, and utilizing tax-advantaged accounts like HSAs and FSAs.