As we reflect on the end of 2023, we see continued evidence of a soft economic landing. In our special edition Primax Payments Pulse, the 2023 Holiday Spending Report, we delve into year-over-year comparisons within financial institutions’ same-store data, offering a comprehensive view of consumer transactions and trends over the 2023 holiday season. We examine Buy Now, Pay Later (BNPL) activity during the holidays, alongside a full-year analysis of performance changes.
Throughout 2023, monthly year-over-year growth rates for debit card purchases remained consistent with the full-year results, showing a 4.8% increase. Similarly, credit card purchases concluded the year with a 2.4% increase, although monthly results softened as the year progressed. By the end of December 2023, credit card purchases saw a modest 0.9% uptick, while year-over-year growth in debit card purchases was up 4.8%. Examining the cumulative holiday spending period (October through December) within the Goods sector, debit transactions and purchases outpaced credit, mirroring the trend observed in the 2022 holiday season. Debit purchases rose by 3.6%, with transactions climbing by 4.8%, while credit purchases experienced a slight decline of 0.7%, coupled with a 1.3% increase in transactions.
More key takeaways from the 2023 Holiday Spending Report include:
- Debit purchases were up 4.8% throughout 2023, surpassing the 2.4% growth in credit purchases. Year-over-year debit transactions increased by 4.6%, while credit transactions grew by 3.6%.
- Holiday spending within the Goods sector saw a 0.7% decline in credit purchases compared to a 3.6% increase in debit purchases during the holiday spending period. Notably, Card Not Present (CNP) transactions outpaced Card Present (CP) transactions, with credit CNP growing by 2.5% and debit CNP by 8.2%.
- The Consumer Price Index (CPI-U) experienced a 0.3% uptick in December, contributing to a 3.4% annual inflation rate, driven primarily by Shelter. Excluding volatile sectors like Energy and Food, the core CPI index rose by 0.3%, resulting in a 3.9% year-over-year increase.
- Buy Now, Pay Later (BNPL) payments increased 24% during the cumulative holiday season in 2023 compared to the previous year, accounting for 3.8% of overall debit transactions within the Goods sector.
- Mobile Wallets continued to gain traction, with credit and debit mobile wallet transactions representing 3.0% and 4.2% of total transactions, respectively, in 2023.
The 2023 holiday spending season reached its peak in November, contrasting with the late surge observed in December of the preceding year. Increased BNPL activity during this holiday season suggests a growing preference for installment-based payments among consumers. For more insights on consumer spending and payment trends, download the latest Primax Payments Pulse.
Kimberly Ploof has more than 30 years of leadership in the payments industry. As Managing Vice President, Kim leads teams that foster in-depth, strategic and productive relationships with Primax clients.
Prior to working with Primax, Kim was the Chief Operating Officer of Covera in Albany, NY. At Covera, Kim was instrumental in building the business model and rebranding the organization to be a widely known payment processing solutions provider. Within the payments industry, Kim has served on the Member Access Network Operations Committee, CSCU Advisory Committee, CO-OP Operations Advisory Committee and CUNA Payments Policy Sub-Committee.
