Visa just released new information that gives a quick sneak peek at the state of U.S. debit volume growth. According to the company, debit volume increased 31% in January and 16% in February, compared to the same months in 2020. Meanwhile, its credit volume slumped by 6% and 8% respectively.
That being said, some payment types experienced greater growth than others. In February, Visa revealed that card-not-present volume (excluding travel) grew by 30%. On the other hand, card-present decreased by 6%.
Regarding the card present and CNP breakdown, Visa went on to say that “The spend-by-merchant category saw similar trends, though fuel and travel-related spending were exceptions as both saw improvement of more than 500 [basis points]. U.S. payment volumes improved moderately in the first week of March relative to the February exit rate.”
Consumers Choose Debit Amid Coronavirus
The recent data on debit volume is yet further proof that this payment type has become the go-to option for consumers amid the coronavirus pandemic. Between March 2019 and March 2020, the payments credit union service organization (CUSO) reports that year-over-year spending was higher (by 9% overall) for the first 21 days of the month.
Supermarkets and grocery stores experienced the largest rise, with transaction dollars higher 41.3 percent year over year – debit cards spending came out ahead of credit cards by 3.5 times. A similar situation was found for pharmacies and drug stores. The year-over-year increase in debit card transactions pushed ahead of credit cards by two times.
Glynn Frechette, SVP, Advisors Plus at PSCU, says, “With the pressures and unknowns of the ongoing economic impact from COVID-19, we are continuing to see consumers choose debit as their most preferred payment form, aligning with the trends we saw in PSCU’s most recent Eye on Payments study.”
Debit Cards: The Shift to Safety
The main reason consumers are choosing debit cards during these rocky times is mainly due to safety. With so many unknowns ahead, many consumers are gravitating towards safety to get a firm grip over their finances and avoid taking on any more debt. There’s also a greater safety in using debit in contactless payments.
The pandemic has also increased consumers’ expectations around all things contactless. Even consumers who did not have contactless cards in their pocket at the start of the pandemic are now getting their hands on them to avoid contact at point of sale (POS). As a result, merchants have felt the demand to seek out multiple (and more secure) payment processing options.
“Ultimately, it’s about consumers initiating that transaction, applying their preferred way to pay and getting back to their lives,” he said.
Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated high risk merchant account processor in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.