First Data: Dollar Volume Hits 12-Month High In July

By Pete Rizzo, Editor (@pete_rizzo)

Atlanta, Georgia-based payment processor First Data revealed that July 2013 dollar volume growth surged to 7.7 percent, a 12-month high for the metric, when it released its latest SpendTrend analysis on August 12. This figure was up from the 7.1 percent growth observed in June.

The increase was driven by strong dollar volume growth at gas stations, hotels and travel merchants. Average ticket growth was 1.1 percent in July, a slight rise from the 1.0 percent growth seen in the previous month’s survey.

Krish Mantripragada, First Data’s senior vice president of information analytics solutions, said the numbers forecast a strong fall season for retailers.

“Despite higher year-over-year gas prices, consumer spending remains healthy and the recent pickup in employment, together with a strong housing recovery and stock market gains, should encourage more spending during the ever-important back-to-school shopping season,” Mantripragada said in a August 12 statement.

In this PYMNTS.com Data Point, we’ll break down the findings to show you how consumers spent their money in July, so you can determine your stance on Mantripragada’s prediction.

Dollar Volume Growth By Payment Method

First Data observed an easing in credit and prepaid dollar volume growth for same-store consumer spending in July. Credit dollar volume grew by 8.1 percent for the month, down from the 8.8 percent growth seen in June. Prepaid dollar volume growth fell to 11.5 percent, dropping from 12.7 percent one month earlier.

Signature debit and PIN debit dollar volume growth increased for the month. Check spending dollar volume growth increased to -3.4 percent, up from -6.6 percent in June.

Rising Gas Prices

Gas prices were the key driver of same-store consumer spending during the study period. This was because the national average price of gasoline increased over the course of July, rising to $3.63 per gallon from $3.49 per gallon, AAA reported. The 14-cent uptick was the largest increase since February.

First Data indicated that gas station dollar volume surged by 6.9 percent, its biggest jump since October 2012, and nearly double June’s increase of 3.5 percent. First Data called rising year-over-year gas prices “a key contributor to growth.”

In July 2012, the average price of a gallon of gas was $3.42.

Slow Retail Growth

First Data found that retail segment dollar volume grew by 4.4 percent in July. While sizable, this figure was down from the 5.5 percent growth observed in June. First Data said the decrease was due to summer clearance discounting and higher gas prices that limited consumer spending. 

Electronics and Appliances was the only retail category to see year-over-year growth. Dollar volume in this category rose by 1.3 percent.

For more insights and data, read the full report summary here.