ST. PETERSBURG, Fla.—While credit and debit transaction growth rates have been strong in recent weeks, PSCU said it is uncertain how long the trend might continue given the increasing spread of COVID-19 in many states.
As CUToday.info has been reporting each week, PSCU’s Advisors Plus and data and analytics teams have been releasing updated data based on its member credit unions revealing card spending trends. Overall, PSCU is reporting its most recent analysis show payments transactions continue to climb.
In this week’s look at payments trends, PSCU compares the 25th week of the year, the week ending June 21, 2020, with the week ending June 23, 2019.
Among the data highlights.
- Overall card payment volumes were very positive for the week, with debit continuing to lead the rebound.
- Debit card spend was up 21.4%, marking the tenth consecutive week of year-over-year growth, the best growth level of 2020 and one of the highest in recent years. Transactions were up 4.4% and are in positive territory for the first week since March 15.
- Credit card spend was down 2.7% year over year but showed a strong improvement over the previous week. Transactions were down 7.8% but have shown improvements for 11 consecutive weeks, data show.
CNP Alternatives
According to PSCU, consumers continue strong usage of card-not-present alternatives and appear to be using less cash. Among the findings:
- Debit card CNP volumes continue to show strong year-over-year growth, up 49.6% for purchases and 48.7% for transactions in Week 25. “This is the tenth consecutive week of growth above 40% for debit,” PSCU said.
- Credit card CNP volumes were up 13.4% for purchases, with transactions up 25.3%.
- Amazon, which spans multiple merchant categories and is a top CNP merchant, had aggregate purchase volume increases of 99% for debit and 54% for credit.
- Cash withdrawal transactions at the ATM have been down 20% or more for 13 straight weeks, indicating less of a preference and desire for cash. For the most recent week, the number of cash withdrawals are down 21%, PSCU said.
Merchant Categories
From a merchant category perspective, trends continue to be mixed, noted PSCU, which reported:
- Grocery continues to perform well, with growth rates accelerating this past week. Purchases were up 18.3% for debit and 19.5% for credit.
- Drug stores have been trending flat but showed strong growth during the most recent week measured, with purchases up 18.5% for debit and 8.6% for credit.
- The purchase volume of consumer goods was up 49.7% for debit and 22.4% for credit. Strong categories of note include electronics, home, discount stores, automobile and sporting goods.
- Travel and Entertainment remain the two most significantly impacted sectors. Travel purchases were down 29% for debit and 62% for credit, and entertainment was down 34.8% and 48.1%, respectively.
Market Differences
PSCU said its analysis found some differences are evident by market, with the “hot zones” underperforming.
- Overall U.S. spend was up 21.4% for debit and down 2.7% for credit.
- The initial eight states/districts (California, Connecticut, District of Columbia, Illinois, Louisiana, Michigan, New York and New Jersey) that were hardest hit by the pandemic (“hot zones”) saw debit spend up by 14.4% and credit spend down by 5.1%. Spending for the combined group continues to be contracted as compared to the overall U.S. “This group is expected to be an important indicator in the coming weeks, given the reduced spread of COVID-19 in some of these states and the reduced COVID-19-related hospitalizations and deaths in the northeastern U.S. states,” PSCU said.
- The eight states that never issued formal “stay at home” orders saw debit spend up by 18.9% and credit spend down by 3.3% for the week.
Now Being Watched
“We are watching a second grouping of 10 states that were identified as new “hot zones” by the White House Coronavirus Task Force in their press briefing on June 26,” the company said. “While performance in these states (Alabama, Arizona, Florida, Georgia, Louisiana, Mississippi, Nevada, Missouri, South Carolina, Texas and Utah) has been close to overall U.S. results, we expect this to be an important segment to watch in the coming weeks, with purchases up 22.8% on debit and down 2.1% on credit for the current week.”
‘Some Tempering’
Added Glynn Frechette, SVP, Advisors Plus, “We continued to see strength in card spend across the board this week, with credit improving and debit growing at record levels. While we are encouraged with these phenomenal rates of growth in debit and anticipate this to continue, we do not expect 20% growth to be the next ‘normal’ and would not be surprised at some tempering – especially in light of some state opening pullbacks announced last week. While the travel and entertainment sectors remain muted, it is intriguing to see credit purchase volumes rebound to current levels, which we will continue to monitor given some of the increased COVID levels in the new hot zones.”