Postponed Prime Day Pops for CU Member Spending

Credit union debit and credit card spending was goosed in the week ending Oct. 18 by an annual, two-day promotion by Amazon Prime, but not as much as past years, according to reports by two payment CUSOs Monday.

Among members whose credit unions work with CO-OP Financial Services, based near Los Angeles, total debit and credit card spending on Amazon for Oct. 13-14 (this year’s “Amazon Prime Day”) was 51.4% greater than during the previous event, which was held July 15-16, 2019.

This was the sixth year the e-commerce giant has held the promotion, usually held in July. This year’s event was postponed because of the pandemic.

PSCU, based in St. Petersburg, Fla., found average member spending on Amazon from Week 29 of 2019, which included the event, to Week 42 ending Oct. 18, rose a bare 0.2% to $45.21 by credit card and 3.2% to $34.66 by debit card.

Digital Commerce 360, a news and research organization, estimated that Amazon Prime Day 2020 sales hit $10.4 billion, rising 45.2% from the $7.16 billion in 2019, and more than double the $4.19 billion in 2018.

However, a day after the event ended, the Chicago-based Market Track estimated that average household spending on Amazon fell 40% to $110 compared with 2019′s promotion.

CO-OP said the economic impact may not be as significant as in years past, as the promotion’s bump occurs in an increasing torrent of pandemic-induced e-commerce spending.

Meanwhile, PSCU reported Monday in its weekly Transaction Trends Update that member spending on all categories by debit cards in the week ending Oct. 18 was 15.7% greater than in Week 42 of 2019 — slightly lower than the four-week average gain of 16.2%.

Credit card spending rose for the seventh week in a row, a gain of 6.5% from a year earlier — higher than the four-week average gain of 4.3%. The number of transactions rose 1.2%, returning to positive territory for the first time since the week of the Labor Day holiday.

By comparison, debit card spending in the four weeks ending Sept. 20 was 16.4% higher than a year earlier, while credit card spending gained 2.9%.

The reports are on a same-store basis, meaning a member credit union’s results are included only if it also has results for the prior period.

“Both debit and credit purchase volume continued to perform well in Week 42, with credit transactions moving into positive territory for the first time since the Labor Day holiday, strengthened by Amazon Prime Day 2020,” Glynn Frechette, SVP at PSCU, said.

The largest credit card spending gains were in the Plains (+8.3%) and the Southeast (+8.2%), and the weakest results occurred in Hawaii (-4.6%), New England (+1.2%) and the Rocky Mountain (+2.4%).

Debit gains were biggest in the Great Lakes (+17.8%) and Plains (+17.6%), while the smallest gains were in Hawaii (+3.6%), the Rocky Mountain (+8.7%) and the Far West (+11.4%).