Credit Unions

Consumers Choose Debit As Preferred Payment Amid Coronavirus

Debit Cards

Amid the coronavirus pandemic, PSCU compared transactions of its owner credit union members on a same-store basis between March 2019 and March 2020. The payments credit union service organization (CUSO) found that year-over-year spending for the first 21 days of the month was higher by 9 percent overall, but the travel industry saw a large 30.3 percent drop.

Supermarkets/grocery stores experienced the largest rise in spend and transaction volume. Transaction dollars are higher 41.3 percent year over year, with debit card incremental spend coming out ahead of credit cards by 3.5 times. The average credit card grocery transaction is higher by $11.41 or 25 percent.

Pharmacies/drug stores have experienced a 21.4 percent rise in total dollars spent with an average increase per sale of 7.2 percent or $1.93 per sale. The year-over-year increase in debit card drug store transactions came out ahead of credit cards by two times.

The consumer goods space notched an overall increase of 9.2 percent in dollars spent, with most of the rise originating from debit cards. The incremental debit card purchase amounts were twice as high as credit cards.

Clothing stores, which are a subset of consumer goods, experienced a large drop in year-over-year sales, with a 23.9 percent decline in transactions and a 22.5 percent decline in dollars. Gas transactions were flat and only rose by 0.04 percent.

Gas prices are less this year with a decline in the crude oil price, which led to a lower average ticket of $1.04 per transaction and 4.9 percent in total spend.

Glynn Frechette, SVP, Advisors Plus at PSCU, said in an announcement, “With the pressures and unknowns of the ongoing economic impact from COVID-19, we are continuing to see consumers choose debit as their most preferred payment form, aligning with the trends we saw in PSCU’s most recent Eye on Payments study.”

Frechette continued, “While it is still in the early days to see the impact on consumer spending, we anticipate further erosion in many of these spending categories as the impact of the regional lockdowns continue.”

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