Not surprisingly, card-not-present (CNP) transactions were up year-over-year in May while in-person transactions fell, as found in a recent study from CO-OP. CNP transactions were up 35% in the first half of May compared to last May. In-person transactions were down 33%. Customers are more willing to use contactless payment methods and far less to swipe cards in-person at merchants such as airlines, live entertainment, and restaurants.
Compared to May 2019, dollar amounts increased by 14%, with volume dropping by 9%. This is a turn around compared to April's findings. April 2020, compared to 2019, showed transaction volume sliding by 41% and credit transactions dropping by 29%. With lockdowns being lifted across the nation, payment transactions are seeing an increase.
The recovery, or lack thereof, is unevenly distributed across industries. Department stores aren't seeing the same kind of recovery. In fact, they are still digging out of a decline. CO-OP found that debit and credit card purchases were down 32% in April and 20% in May. Department stores were having a tough go of it before the pandemic hit but some have been pushed over the edge, with J.C. Penney and Pier 1 Imports declaring bankruptcy. On the other side of the spectrum, Amazon bookstore debit and credit spending were up 52% and 74%, respectively.
Grocery stores have also seen a decline in transactions, as many customers move to online grocery shopping. In-person debit transactions were down 8% and credit transactions were down 11% at grocery stores.
Government stimulus programs, including unemployment, will run out in July. The latter part of the summer will be very telling. Will consumers continue spending once their stimulus money runs out? The blowout May jobs report might hold some glues. If businesses are able to continue bringing workers back on, they will likely be less dependent on stimulus funds.
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