Credit Union Data Point to Robust Growth for Wallet, Contactless Card, And Online Activity

More evidence emerged Monday that, for all of its horrors, the coronavirus has been a boon for mobile wallets and for contactless payments generally.

Wallets, which struggled to win consumer adoption in the United States even with backing from popular tech firms like Apple Inc. and Google, are increasingly turning into a go-to payment method for people in stores but avoiding point-of-sale hardware and for those turning to e-commerce for their needs. 

PSCU, a payments processor for credit unions nationwide, reported debit transactions via mobile wallets for the week ended Aug. 9 were up 76.6% compared to the same week last year. Credit card transactions on mobile wallets rose 48.2% year-over-year, “in line with the prior four-week average of 48%,” PSCU says in its weekly report on payment activity during the pandemic, which became a national emergency in March. 

St. Petersburg, Fla.-based PSCU measures activity for Apple Pay, Fitbit Pay, Garmin Pay, Google Pay, LG Pay, and Samsung Pay. Its report releases percentage changes across all payment methods but not absolute figures. 

The story with contactless cards is similar. Tap-and-go debit cards accounted for 12.1% of all card-present transactions in the latest week, up from approximately 8% in mid-January. The equivalent shares for contactless credit cards are 9.2% and 6.5%. 

Another payments theme that has become familiar with the restrictions imposed by the pandemic is the explosion of online payments. Accordingly, PSCU reported its card-not-present transactions continue to rise, with CNP credit card transactions accounting for 52.7% of purchase volume and 41.9% of transactions. For debit, online claimed 43.2% of purchase volume and 28.9% of transactions. 

Year-over-year, CNP credit card spend has grown 8.1 percentage points as a share of all credit volume while CNP debit volume’s share has gone up 8.9 points. Transactions for CNP credit were up 10.4 percentage points; for debit, 8.3 points.

Overall, the picture for debit is somewhat better than for credit. Total spend on debit cards was up 19.6% year-over-year, bettering the prior four-week average of 16.1%. Transactions increased 3.3% “and have been positive for six consecutive weeks,” PSCU says.

Credit card spend dipped 2.1% year-over-year, though that bettered the four-week average of negative 3.3%. Transactions were down 6.5%, not far from the negative 7.7% four-week average.

“Despite the recent fiscal stimulus reduction and remaining uncertainty around school openings, our card portfolios performed well last week, with debit growth back at high levels and credit close to positive territory. Travel and entertainment, which have been the most significantly impacted sectors throughout the pandemic, continued to show slight signs of improvement, a trend we will continue to cautiously monitor,” said Glynn Frechette, senior vice president for Advisors Plus at PSCU, in a statement. Advisors Plus is a consulting arm of PSCU.

Payment Systems for Credit Unions started in 1977 and rebranded as PSCU in 2014. The company processes 3.8 billion transactions yearly for 1,500 credit unions.