By: Brian Scott, SVP and Chief Growth Officer
As the 2022 holiday shopping season drew to a close, the Primax Payments Pulse: 2022 Holiday Spending Report revealed that consumer holiday spending trended upward at the end of the year, with the peak occurring in the week that ended on Christmas Day. Credit card growth rates continued to outpace debit cards for overall spending; however, the cumulative holiday spending period (October through December) in the Goods sector revealed higher growth rates for debit over credit on both purchases and transactions.
The Bureau of Labor Statistics (BLS) reported in its December 2022 jobs report that 223,000 jobs were added for the month, the smallest monthly gain in two years and a sign that the job market appears
to be losing momentum. Despite that indication, the job market in the new year is stronger than expected, with the unemployment rate dropping to 3.4% in January – the lowest rate since 1969.
Some key takeaways from the 2022 Holiday Spending Report include:
- For the cumulative holiday period in the Goods sector, growth in credit purchases was up 2.0% and growth in debit purchases was up 6.4%. Both Amazon and Walmart posted strong year-over-year results, with growth in credit purchases outpacing growth in debit purchases, while Target’s growth results were nearly flat compared to 2021.
- Overall consumer spending growth on payment cards in 2022 finished strong, with credit purchases up 15% and debit purchases up 5%. Credit card growth results continued to deflate as the year progressed before an uptick in December, while debit card growth was mainly consistent for 2022 and lower than growth on credit cards. Inflationary pressures contributed to growth in purchases, outpacing growth in transactions for the full year. For 2022, growth in overall transactions was up 12% for credit and 3% for debit.
- Contactless card “tap and go” transactions continue to grow as a percentage of transactions on contactless cards, showing strong consumer adoption. For full-year 2022, “tap and go” represented 24% of all Card Present credit transactions on contactless credit cards and 26% of all Card Present debit transactions on contactless debit cards. The average credit contactless purchase in 2022 was 24% lower than the overall credit Card Present purchase, suggesting contactless represents smaller-dollar transactions.
Looking Ahead
Entering the new year, inflationary pressures are showing signs of slowing. The Consumer Confidence Index increased sharply in December following back-to-back monthly declines, while the New York Fed’s Survey of Consumer Expectations showed greater consumer optimism relative to inflation in the year ahead.
Transaction growth will be an important metric to continue to monitor in 2023 as a key indicator of shifting trends in this uncertain economy.
Download the full Primax Payments Pulse: 2022 Holiday Spending Report to help your financial institution make informed, strategic decisions in the year ahead.
Brian Scott partners with industry leaders in payments and community financial institutions to create competitive payments programs, helping financial institutions position themselves competitively in their own communities and maintain profitability throughout their payments programs. Brian spent 23 years in the highly competitive consumer payments marketplace and is a recognized leader in payments solutions and innovative technologies. He is a frequent speaker on the future of payments, new payments trends, mobile banking, alternative payments, and how new payments technologies will transform the current banking space.
