The past six weeks have forced many changes on Australian consumers, and credit card usage is no exception.
Westpac noted a significant change in the use of credit and debit cards during the week ending July 24, 2021, in its Card Tracker report, which creates an overall card activity score by comparing current spending by card for the same period in 2019.
He revealed that nationally, card usage was 99.6, the lowest and first rate below 100 since early April 2021. This comes after a noticeable increase in activity the week before. .
VIC has been hit the hardest. In the second week of its two-week instant lockdown, the state saw a significant drop of 12.8 points. While, despite the tightest lockdown and the least retail mobility, NSW recorded the smallest 1.6 point drop.
The data implies that the annual growth in card business is now slightly lower than its pre-COVID pace. Despite the decline in card usage, there is a noticeable increase in online card activity.
Westpac Senior Economist Matthew Hassan said: “With closures ending in Vic and South Africa, next week should see these states rebound. All eyes will therefore be on NSW again.
“NSW has seen an increase in online sales which now represent more than half of all transactions. With measures expected to remain in place for a long time to come, a sharp economic contraction is inevitable even if card activity retains this resilience ”.
What’s wrong with shopping online?
Since the lockdown in NSW began, there has been massive growth in online sales – going well beyond the highest COVID lockdown rates of 2020.
Transactions with “card not present” (CNP), that is, sales made without the physical card, only card information, now constitute the majority of transactions in the state for the first time. The rest of Australia is not far behind, with 44% of sales made by CNP.
While this appears to be promising news, it is unclear whether NSW consumer data will remain resilient in the face of such severe and prolonged lockdowns.
The consistent use of the card may be due to a delay in the impact of the delta-related lockdown on consumers, the report says, but the longer the lockdown, the less likely it is.
Instead, it’s more likely that the people of NSW have just adapted to the circumstances and embraced the CNP’s buying options.
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