U.S. Credit and Debit Card Spending Up 21% in July
New market data published by The Strawhecker Group (TSG), the largest analytics and consulting firm focused on the payments acceptance industry, illustrates the strength of the U.S. economy. TSG data shows that July year-over-year consumer spending on credit and debit cards was up 21% nationwide. Further, when compared to July 2019 to adjust for the influence of COVID, spending was up nearly 20% when looking at a two-year compound annual growth rate (CAGR).
"The two-year comparison shows that the tailwinds to the U.S. economy as well as the payments industry are apparent and material. Increased merchant acceptance and consumer usage when paired with strong economic growth, combine to show attractiveness of these markets" said Mike Strawhecker, President of TSG. "Consumer spending comprises 70% of the United States' GDP, and 70% of consumer spending is electronic. This underscores the point that the payments ecosystem is the backbone of the U.S. and global economies."
Various industries contributed to July's credit and debit card two-year growth (2021 versus 2019, Two-Year CAGR). Among the 250+ industries TSG monitors, high performing industries included:
- Non-Financial Institutions - including cryptocurrency (+81%)
- Aquariums (+51%)
- Car Rental Agencies (+48%)
- Sporting Goods Stores (+48%)
- Video Rental Stores - including streaming services (+41%)
- Grocery – ecommerce only (+38%)
- Retail – ecommerce only (+34%)
- General Construction (+33%)
- Air & Ground Freight – excluding the government Postal Service (+30%)
- B2B - Distributors of Durable Goods (+29%)
Many of the high growth industries may be benefiting from consumer preferences shifting to digital goods, new volume shifting from check to card, as well as the proliferation of ecommerce spending. In addition, a TSG and Visa study found that that 26% of consumers expect to use cash less frequently than they did before the pandemic.
TSG forecasts that the larger industry groups of Construction, B2B, Personal Services (e.g., Landscaping Services), and Utilities will outperform the market in the near-term, driven by consumer demand and the conversion to card payments.
Geographic performance also varied from state to state, with Nevada, South Carolina, Delaware, and Arkansas all having 25%+ growth when comparing July 2021 to July 2019.
The metrics defined in this release were calculated as follows:
- Consumer spending: Per Merchant Daily Volume Adjusted for Days Processed
- YoY Change: Year-over-Year Change in Per Merchant Adjusted Daily Volume divided by the Per Merchant Adjusted Daily Volume from Jul 2020 to Jul 2021
- Two-year Change: Two-Year CAGR in Per Merchant Adjusted Daily Volume from Jul 2019 to Jul 2021