2025 Auto lending trends: Mobile payments and self-service revolutionize customer experiences

Consumer preferences for using mobile devices to make bill payments have become increasingly pronounced, reaching 26% in 2024 compared to just 11% in 2019. According to The Paypers, the transaction value of mobile payments grew by 12% year over year in 2024, totaling USD 8,146 billion across 47 researched markets. Our survey indicates that the younger generations are leading this shift towards mobile channels for bill payments, with Gen Z showing a significant increase in preference from 36% to 47%, and Millennials increasing from 29% to 35%.

This illustrates the importance of mobile-optimized channels and experiences that enable customers to manage their accounts completely from their phones. Looking ahead through 2025, I expect the preference for mobile payments to grow even further, with more consumers keen to manage their auto loans entirely through mobile apps. Combined with increasing competition, this should motivate lenders to prioritize improving the overall customer experience, making it easier and more convenient for borrowers to manage their loans.

By allowing customers to take charge of making payments, updating billing information, or restructuring loans through a mobile device instead of calling into contact centers, auto lenders have a rare opportunity to reduce their costs while improving the customer experience. Driving traffic to self-service portals will also ease resourcing demands at a time when staffing challenges are a major headache for auto lenders across the board.

In mobile experiences, lenders must maintain a diverse payments mix, allowing customers to use either digital or physical payment methods at any time.

Our research has shown that debit cards now dominate as the preferred payment method for younger demographics for recurring bill payments – Gen Z (51%) and Millennials (42%) – while checking account deduction is the payment type of choice for Gen X (38.5%) and Boomers (49.8%).

Lenders are guided by the principle of “never turn down a payment,” which leads them to recognize that younger consumers have grown up with digital, real-time experiences. As a result, they are adapting their payment options accordingly. These younger individuals prefer to make payments using whatever method they have available, and they do so whenever they are certain that the funds are in their accounts.

As we look ahead to 2025, lenders are expected to broaden the range of available payment methods. This includes greater integration of digital wallets and real-time payment systems. According to McKinsey’s 2024 report on digital payment trends, these developments aim to address consumer demand for faster and more convenient payment options.

As tougher economic conditions for consumers feed through to the auto finance sector, many expect an uptick in delinquencies, increasing costs and exacerbating resourcing issues. Experian’s Q3 Automotive Quarterly Trends report found loan amounts increased and payments are up for all but Super Prime borrowers. This is a metric worth monitoring closely for any signs of pressure on the ability of some groups of consumers to keep up with their repayments.

Through 2025, potential economic fluctuations mean lenders need to be agile, adjusting their strategies to manage delinquencies and maintain profitability. A key aspect of this strategy should be to explore more advanced self-service options that possibly include features like AI-driven customer support and customized payment plans.

However, automation alone is not enough. The type and timing of communications must align with consumer preferences to increase the chances of reaching borrowers and bringing them up to date. Many billers across industries are successful with short-code SMS messages, linking to self-service portals where customers can make payments with whatever is in their wallet, schedule partial payments, and set up payment plans. Pre-delinquency, these outbound communications can also be used to light up a customer’s phone with proactive notifications that their bill is approaching due. This increases the likelihood of lenders getting paid ahead of other billers.

The findings suggest optimizing payment costs requires more than just lowering processing or acceptance fees, it involves examining the total ownership costs associated with different payment methods, and the overall customer experience. This comprehensive perspective encourages lenders to adopt a more holistic approach to payment solutions.

This involves transitioning customers to more affordable payment methods when suitable and aligned with lenders’ requirements. Additionally, it is important to evaluate the overall cost of serving customers, whether their accounts are current or at risk of falling into delinquency. As we’ve observed, investing in preferred communication methods is more effective in recovering revenue.

To dive deeper into the latest payment trends affecting auto lenders, explore the newest insights in the ACI Speedpay Pulse Report. Visit our website for additional information on the ACI Virtual Collection Agent.