ST. PETERSBURG, Fla.—For the first time in 23 weeks, credit card spend finished in positive territory last week, with both debit and credit growth rates increasing, according to PSCU.
PSCU’s Advisors Plus and Data & Analytics teams released their latest year-over-year weekly performance data trends, with this week’s installment comparing the 34th week of the year, the week ending Aug. 23, 2020, with the week ending Aug. 25, 2019.
Report highlights:
Payment Volume
- Overall card payment volume growth rates improved in Week 34.
- Debit card spend was up 18.1%, which is higher than the prior four-week average of +16.1%. Transactions were up 4.7% and have been positive for eight consecutive weeks.
- Credit card spend finished in positive territory for the first time in 23 weeks, up 0.9%, which is better than the four-week average of -1.9%, PSCU stated. Transactions closed above the four-week average of -5.9%, finishing down 4.1%, PSCU said.
Payment Type
PSCU said consumers continue strong usage of contactless, mobile wallets and card-not-present (CNP) alternatives, while continuing to use less cash. Among the findings:
- Contactless “tap-and-go” transactions via dual interface cards continue to gain adoption. Debit contactless transactions as a percent of card-present activity on contactless debit cards have grown from around 8% in mid-January to a peak of 12.9% in July, finishing at 11.7% in Week 34. Contactless credit transactions have also grown from 6.5% in mid-January to last week finishing at 9.5% of card-present activity on contactless credit cards.
- Mobile wallet transactions and purchases continue to trend up for both credit and debit cards. Debit mobile wallet purchases finished Week 34 up 74.7% year over year. Credit mobile wallet purchases were up 49.7% year over year, in line with the prior four-week average of 49.6%. These results represent six supported mobile wallets: Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay and Samsung Pay, PSCU said.
More CNP Volume
“We continue to see more volume conducted via Card Not Present transactions. For credit, 51.8% of purchase volume and 40.9% of transactions were CNP,” the company said. “For debit, 41.7% of purchase volume and 28.3% of transactions were CNP. Purchase mix has held steady and is up 6.9 percentage points year over year for credit and 7.3 percentage points for debit. Transaction mix is also steady and up nine percentage points for credit and 7.2 percentage points for debit.”
- Amazon, a top CNP merchant, had aggregate purchase volume increases across their various merchant categories of 76% for debit and 44% for credit.
- Cash withdrawal transactions at the ATM remain down year over year. For the most recent week, the number of cash withdrawals was down 21%, just below the average for the past four weeks, which is -20.8%, PSCU said.
Merchant Categories
From a merchant category perspective, trends showed mixed patterns, PSCU explained. Those patterns include:
- Grocery continues to perform well overall, with purchases up 8.8% for debit and 14.5% for credit.
- Utilities also remain in positive territory, with purchases up 22.5% for debit and 7.4% for credit.
- The purchase volume of consumer goods across retail stores remains very strong, as debit was up 33.9% and credit up 19.8%. Growth continues across most retail categories, led by electronics, home, discount stores, automobile and sporting goods.
- Debit spend for Restaurants stayed positive in Week 34 at 6%, with fast food restaurants leading the way. Credit spend was down 18.2%, which is better than its four-week average of -22%.
- Services rebounded for the week, with debit finishing up 16.7% and credit up 6.3%. Positive contributors include healthcare, auto, pet and home services, PSCU said.
Regional Data
To provide more detailed insight into the impact of the COVID-19 pandemic on the economic regions of the U.S., PSCU said it modified our reporting to include regional breakouts that mirror the segmentation used by the U.S. Bureau of Economic Analysis (BEA) (see chart below).
Overall U.S. spend was up 0.9% for credit purchases. The Plains states (up 5.8%) and the Great Lakes states (up 4.9%) finished as the strongest regions for Week 34. New England (down 5.8%) and the state of Hawaii (down 3.8%) had the lowest credit purchases performance.
Overall U.S. spend was up 18.1% for debit purchases. The Great Lakes (+21.3%), the Plains states (+20.4%) and the Southeast (+20.4%) all finished above the U.S. average for Week 34. The regions with the lowest debit purchase results are New England (+ 9.1%) the Far West (+ 9.7%), and the Rocky Mountains (+ 10.9%).
PSCU’s Weekly U.S. State/Territory Analysis is available on PSCU.com/COVID19, ranking U.S. states and territories by year-over-year performance for debit purchases, credit purchases and ATM transactions.
Move Toward ‘Normalization’
“Card payment volumes improved in Week 34, with credit card spend finishing in positive territory for the first time since March,” said Glynn Frechette, SVP, Advisors Plus at PSCU. “Looking at the number of transactions, the year-over-year change is at its highest level since the onset of the pandemic. The same is true with card-present transactions, suggesting consumers may be out and doing more. Additionally, if we exclude travel and entertainment from total credit card purchases, volume has been positive for 12 consecutive weeks. While we still have a way to go, these trends indicate a move toward normalization.”