First Data Reports Consumers Used Cards In May, But More Slowly
First Data has reported that consumers that used credit and debit cards on its processing platform kept spending in May, but also began to show signs of slowing down.
“Overall May card spending growth was healthy but there is reason for caution. During the month we saw consumers reducing the growth of their discretionary spending at retail merchants and increasingly resorting to credit for necessities,” said Silvio Tavares, senior vice president and division manager of First Data Global Information and Analytics Solutions, which publishes SpendTrend.
The processor reported May’s same-store dollar volume growth increased 7% year-over-year, up from April’s growth of 5.7%. Although consumers continued to spend at a healthy clip early in the month, activity did slow as the month progressed. Transaction growth in May held fairly steady at 5.9%.
The slowdown hit most significantly in spending in discretionary categories in May. Industries such as hotels and restaurants saw significantly slower dollar volume growth in May compared to April. Overall year-over-year average ticket growth was 1.0% in May, up from April’s -0.1% growth. In May, credit dollar volume growth surged to 8.2% past April’s growth figure of 5.8%.
The processor reported that credit card spending increased 8.2% over May of last year and that consumers spent 5.5% more on debit card transactions that they validated with their signatures and 7.2% on debit card transactions they validated with a PIN.
The spending on transactions settled with a check declined by 4.2%, First Data said.