DES MOINES, Iowa–Credit and debit cardholders are increasingly relying on digital means to check off their holiday shopping lists, according to one payments processor.
The Members Group analyzed payment data from Black Friday through Cyber Monday and found that while cardholders shopped both in-store and online throughout the holiday weekend, card-not-present (CNP) sales accounted for nearly a quarter of the total holiday weekend credit and debit card transactions processed by TMG.
Notably, the CNP number jumped significantly as compared to previous years. In 2014, for example, CNP sales accounted for 20% of all card transactions. In 2013, they accounted for 15%.
For the first time, TMG included both EMV and tokenized transactions in its holiday spending analysis.
Brandon Kuehl, TMG product development manager, said the objective of doing so was largely to establish a benchmark, particularly with regard to mobile pay solutions, which continue to account for only a fraction of transactions across the industry.
“While we didn’t expect to see sizable digital wallet activity during the 2015 Thanksgiving shopping weekend, we felt it was important to take a look to begin to understand triggers, motivators and other nuances driving the decision to make a purchase via digital means,” he said.
Below are observations TMG’s product and digital teams made after examining tokenized transaction data, which Kuehl said is largely made up of Apple Pay purchases today.
- Cyber Monday was the most popular day in November for tokenized credit transactions; Black Friday for tokenized debit transactions.
- Tokenized debit transactions accounted for 58% of total tokenized credit and debit transactions during the holiday weekend.
- The average tokenized debit transaction was $25.80; average tokenized credit transaction was $45.53.
- Of the cardholders who made at least one tokenized transaction over the holiday weekend, the largest segment (31%) was composed of consumers in their 30s. Consumers age 18 to 29 and age 40 to 49 made up the next largest groups at roughly 24% each.
- Tokenized holiday shopping among TMG’s clients happened most often at Trader Joe’s, Whole Foods, Starbucks, Groupon, McDonald’s, Sprout’s Farmers Market, Walgreens, Panera Bread and Uber.
EMV transactions, which have continued to experience month-over-month increases north of 30% since January 2015, accounted for 26% of all card transactions processed by TMG over the holiday shopping weekend. Interestingly, cardholders who used EMV chip credit cards spent more on average than those with mag-stripe cards. EMV chip credit cardholders spent $74.20 on average per transaction, whereas those with mag-stripe cards spent $71.67. The greatest majority of cardholders transacting with EMV chip credit cards were in their 50s and 60s, making up 40% of the total cardholder population.
In terms of overall transaction volume, TMG’s holiday shopping numbers are up significantly (nearly 23% on credit; 13% on debit) as compared to the prior year, a result of rapid growth in the number and size of financial institutions that process with the company. Today, TMG’s client roster includes half of the 12 largest credit unions in the U.S., and earlier this year the company expanded its business into the Canadian marketplace.
Analysis of a select group of TMG clients – credit and debit card issuers across the U.S. ranging from $180 million to more than $9 billion in assets that have processed with TMG for at least the last three holiday shopping seasons – reveals impressive growth, TMG said.
“Since 2013, this particular group of credit unions experienced 34% growth in the number of credit cardholders using their credit union-issued cards to shop on the holiday weekend; 40% growth in the total number of holiday transactions; and 32% growth in total credit card spend.
Other holiday shopping weekend conclusions made by TMG analysts include:
- The largest shopping day for both credit and debit cardholders in 2015 was Black Friday.
- Slight decreases in average cardholder spending seem to match predictions made by CUNA. Although the average number of holiday shopping transactions was virtually unchanged as compared to 2014, total average spend decreased by roughly 2% among credit and debit cardholders, TMG said.
- Since 2013, Amazon, Walmart and PayPal have been the most popular holiday shopping merchants among TMG credit cardholders.
- The largest segment of cardholders who used their credit card to shop online was composed of consumers in their 50s. Although fewer consumers in their 40s used their credit card online, they spent more on average when they did. Fifty-something credit cardholders spent an average of $182 online, while 40-somethings spent $189.
- Cardholders who used their debit cards online tended to be younger, with the largest segment composed of those between 18 and 29. When this group used debit online, they spent markedly less on average than their credit card counterparts. When this age group used credit cards online, they spent $128; when it was a debit card, that average spend dropped to $89, TMG said.
- The average amount loaded onto gift cards issued by TMG’s prepaid clients increased year-over-year by 13% over the holiday weekend; by 22% on Cyber Monday.