Credit union service organization (CUSO) PSCU compared the week ending April 19, 2020, to the same time frame in 2019 to discover what impact the coronavirus is having on consumer spending and shopping trends.
“This week’s transaction analysis showed the impact of the federal government’s coronavirus stimulus package,” said Glynn Frechette, SVP, Advisors Plus Consulting at PSCU. “Debit card spend and average debit card purchases saw year-over-year increases as money was automatically deposited into checking accounts — and consumers found ways to use it, with debit purchases on consumer goods notably increasing.”
The weekly report showed credit card spending is down almost 29 percent but the impact of COVID-19 stimulus funds is likely responsible for the uptick in debit card spending, with the average purchase up more than 25 percent. Stay-at-home mandates have changed how people spend, with card-not-present (CNP) transactions now accounting for 63 percent of all purchases made with a credit card. Before the pandemic, CNP was 35 percent.
People spent more money on consumer goods, with a 20 percent increase in debit card transactions. More people also used ATMs in the week ending April 19, with balance inquires up 8.9 percent and withdrawals up 18 percent, PSCU said.
The eight states without stay-at-home mandates saw a 29 percent drop in credit card spending and an increase in debit card transactions of 4.5 percent, PSCU noted. In hot zone areas where the coronavirus hit the hardest — California, Connecticut, Washington D.C., Illinois, Louisiana, New York, New Jersey, Los Angeles and Miami — credit card spending was down almost 34 percent. Debit card transactions were down 2.4 percent.
Supermarkets have seen a return to spending that is closer to normal, with an increase of a little more than 4 percent for credit cards almost 16 percent for debit cards. Purchases at drug stores are down below 2019 spending levels. Credit card transactions were down more than 14 percent and debit card spend was down over 8 percent. Spending at the gas pump is still way down, with credit card transactions down 60 percent and debit card usage down 39 percent.
PSCU EVP and Chief Operating Officer Tom Gandre contributed to Black Swan, a special report exclusively from PYMNTS. He discussed the importance of CUSOs like PSCU to partner with credit unions as they navigate the uncertainty of the coronavirus pandemic.