“Consumers are using their cards to pay for everything” is not too much of an exaggeration in today’s market.
Visa’s Q3 results posted July 26th, highlight a significant increase in consumer spending since the beginning of the pandemic. Overall payments volume increased by 12% year over year to $2.9 trillion nominally.
The most noteworthy categories that drove consumer spending were in travel and entertainment with corporate travel growing a little. Cross-border transaction volume grew significantly by 28% since 2020 highlighting travel spending. In general more cards are in use as total cards in circulation grew by 8% to 3.6 billion cards, credit growing 5% and debit 9%.
Overall Q3 volume were 136% over levels seen three years ago according to Visa CEO Al Kelly. Additionally, “Card present, excluding travel volumes in the U.S. remained significantly ahead of pre-pandemic levels at 170% of 2019,” Kelly said.
Kelly stated that growth “has been stable or improving” with all national credit and debit card volume, both in present and not-present transactions. “This has been the case for most of 2022,” said Kelly
Another notable growth category includes retail good spending and home improvement seeing modest single digit growth vs. three years ago.
While both non-affluent and affluent consumer spending were resilient, affluent spenders made more purchases in restaurants and travel.
Despite inflation, Kelly stated Visa hasn’t “seen any evidence of consumer pull, pulling back spending in our markets”.
E-commerce specifically saw a 300% increase in volume above 2019’s Q3 and 35% year-over-year growth.
Currently, despite shrinking incomes, consumers in America are continuing to spend. According to the US Commerce Department, consumer spending rose 0.6% in September.
In terms of B2B growth, Visa saw a 20% increase in this sector and commercial payments volumes rose to 145% compared to 2019 Q3. Additionally seeing 27% growth year-over-year with corporate travel making up for 6 points of that annual growth.
“This was held by much of Asia opening up at the beginning of the quarter, the U.S. inbound corridor picking up steam as well as strong growth in and out of Europe,” he said.