Card Payment Activity Softens a Bit, But Debit Sees Surge During January, PSCU Reports

ST. PETERSBURG, Fla.–Card payment data softened a bit among credit union cardholders in the latest analysis released by PSCU, although debit purchases during January saw one of their strongest increases ever.

The company’s Advisors Plus and Data & Analytics has released year-over-year weekly performance trends comparing the fifth week of the year—the week ending Jan. 31—with the week ending Feb. 2, 2020.

“While card payment volume softened for debit and credit in Week 5, overall purchases remain strong, with debit purchases experiencing one of the highest monthly growth rates in recent history,” said Glynn Frechette, SVP, Advisors Plus. “Following the Super Bowl this past weekend, we take a deeper dive into the Entertainment sector, where we continue to see significant impact to purchases across all categories.”

Overall Findings

Although growth rates slowed in Week 5 for credit and debit, overall purchases were still strong as the first month of 2021 closes out, PSCU said. It reported:

• Debit card spend is up 16.8% in Week 5 and debit transactions finished up 2.9%. Debit purchases were lower than the previous four-week average of +25.7% and transactions are also lower than the previous four-week average of +7.8%. For the month of January, debit purchases were up 26% year over year, one of the highest monthly growth rates in recent history.
• Credit card spend in Week 5 finished up 1.8%, below the previous four-week average of +3.4%. Transactions finished down 4.8%, lower than the previous four-week average of 2.4%. For January, credit purchases were up 3.4% year over year, PSCU said.

Contactless/CNP

PSCU said consumers continue to show strong adoption of digital payments, including contactless, mobile wallets and Card Not Present (CNP) alternatives, while using less cash.

Among the findings in the latest data:

• Contactless “tap-and-go” transactions via dual interface cards continued to show strong consumer acceptance, with debit showing notable strength. Debit contactless transactions as a percent of Card Present activity on contactless debit cards have more than doubled from around 8.4% in January 2020 to 18.6% in Week 5 of 2021, PSCU said.
• Contactless credit transactions have also more than doubled, growing to 13.6% from 6.5% of Card Present activity on contactless credit cards in the same timeframe. “We continue to view these results as conservative, as the ratio considers the proportion of contactless activity to all card present transactions, not just those able to be tapped,” the company said.
• Mobile wallet (i.e. “Pays”) transactions and purchases for both credit and debit cards continue to show good growth with Card Present activity. Debit mobile wallet purchases finished Week 5 up 59.6% year over year, lower than the previous four-week average of +69.9%. Credit mobile wallet purchases are up 35.7% year over year, lower than the previous four-week average of +45.9%. The results represent six supported mobile wallets: Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay and Samsung Pay.
• PSCU said it continues to see more volume conducted via Card Not Present (CNP) transactions. For credit, 56.2% of purchase volume and 45.2% of transactions are CNP. For debit, 44.9% of purchase volume and 31.3% of transactions are CNP. Purchase mix has held steady and is up six percentage points year over year for credit and 6.5 percentage points for debit. Transaction mix also remains steady, up 9.4 percentage points for credit and 7.7 percentage points for debit year over year, the company said.
• Cash withdrawal transactions at the ATM are down year over year. For the most recent week, the number of cash withdrawals was down 24.1%, below the previous four-week average of -13.7%. 

Merchant Activity

According to PSCU, from a merchant category perspective, the start of 2021 continues to show strong results in Goods, Utilities, Services, Grocery Stores and Restaurants, while year-over-year performance for Travel and Entertainment remains depressed. Gasoline has rebounded to its best performance since the onset of the pandemic, the analysis found.

Among the other findings:

• Purchases in the Goods sector remain strong, up 24.8% year over year for credit and 37.2% for debit; Utilities spend was up 21.5% year over year for debit and up 12.3% for credit; Service spend was up 12.9% year over year for debit and up 2.9% for credit; Grocery spend was up 5.7% for debit and up 11.4% for credit; Restaurants were up 7.2% for debit and down 16.2% for credit.
• Travel was down 22.7% year over year for debit and down 54.4% for credit.
• Gasoline was up 1.6% year over year for debit, finishing up 0.6% for January and down 9.7% for credit, finishing down 14.2% for January.

Regional Analysis

Using U.S. Bureau of Economic Analysis (BEA) data, PSCU said:

• Overall U.S. spend was up 1.8% for credit purchases. The Plains (+2.2%), Southeast (+5.5%) and Southwest (+2.3%) finished as the strongest regions for Week 5. Hawaii (-13.2%) and the New England region (-6.3%) had the lowest credit purchase performance.
• Overall U.S. spend was up 16.8% for debit purchases. The Great Lakes (+20.7%) and Plains (+19) finished as the strongest regions for Week 5. Hawaii (+5.8%) and the Far West (+7.9%) region had the lowest debit purchase performance.
• The company noted its Weekly U.S. State/Territory Analysis is available at www.PSCU.com/COVID19, ranking U.S. states and territories by year-over-year performance for debit purchases, credit purchases and ATM transactions.

Deep Dive into Entertainment

With all eyes on the Tampa Bay area for Super Bowl LV, usually the pinnacle of both in-person and televised entertainment, PSCU said its latest deeper dive explores the Entertainment sector.

For Week 5, debit purchases were down 26% and credit purchases were down 54%. While the sector represents a smaller portion of overall credit and debit spending, PSCU said it has seen significant reductions in purchases in these Entertainment sub-categories since the start of the COVID-19 pandemic.

• Arena & Stadium Sports: This category is comprised of commercial sports and pro sports clubs. Currently, Arena & Stadium Sports represent roughly 3% of the Entertainment purchases. For Week 5, debit purchases finished down 52%, well below the previous four-week average of -36% and credit purchases are down 71%, well below the previous four-week average of -64%.
• Membership Clubs & Golf Courses: In this category are public golf courses and private golf clubs, country clubs and sports/recreation membership clubs. Currently, this subset represents 20% of debit purchases and 30% of credit purchases. For Week 5, debit purchases finished down 48%, well below the previous four-week average of -15%, and credit purchases are down 54%, well below the previous four-week average of -28%. Both significant drops are attributable to the timing of gym membership payments.
• Parks & Attractions: This category includes amusement and theme parks, aquariums, tourist attractions, circuses and carnivals. Within the Entertainment sector, Parks & Attractions represent roughly 10% of debit purchases and 14% of credit purchases. For Week 5, debit purchases finished down 21%, just above the previous four-week average of -22% and credit purchases are down 34%, just above the previous four-week average of -38%.
• Theaters: Included in this category are movie theaters, theatrical productions, ticket agencies, bands and orchestras. Currently, theaters represent roughly 10% of Entertainment purchases. For Week 5, debit purchases finished down 80%, just above the previous four-week average of -82% and credit purchases are down 87%, just below the previous four-week average of -86%.