The news: One-third of US consumers plan to spend less this holiday season, per a Bankrate survey. Another 24% plan to spend more, and 43% of shoppers plan to spend the same.

Many consumers are feeling financially strained.

• Thirty-four percent of respondents said inflation will change how they shop.
• And 28% said they’re stressed about the cost of holiday shopping.
• Another 27% said they plan to take on debt to get through the holiday season.

Why it matters: The holiday season is a huge volume opportunity for payment players. The season (which we define as November and December) will account for 18.4% of total US retail sales this year, according to our forecast. And this share goes up even more for ecommerce sales, representing 22.3% of full-year sales.

Debit cards will remain the top payment method for holiday shopping: Debit volume typically picks up when consumers’ budgets get strained.

• 58% of shoppers plan to use a debit card this holiday season, up from 52% last year.
• 19% plan to use a credit card that they will pay back over multiple billing cycles, while 34% plan to pay their credit cards in full to avoid interest.
• 11% will use a BNPL plan to finance their purchases.

The bigger picture: US consumers are in a precarious position.

• Many consumers’ financial health has been improving, but those who were already struggling are falling further behind.
• And while US consumer confidence is slowly rising, they’re getting anxious about the labor market: There were 1.1 million fewer job openings in July than a year ago, according to the Labor Department—though the US added 142,000 jobs in August.

Our take: Payment providers’ annual outlook heavily depends on the success of the holiday season. It will not only affect their payments volume growth, but it could also lead to higher delinquencies for credit card and BNPL providers.

But these losses could be mitigated as expected rate cuts start to make paying back credit card debts a bit easier.