PSCU & CO-OP See Payments Rise as Members Shop Early

PSCU, CO-OP track spending increases that mostly meet or exceed national trends.

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Credit union members started their holiday shopping early, putting them slightly ahead of other Americans in October are retail spending rose from both year-ago and month-ago levels, according to reports released Thursday by payments CUSOs.

Credit union members served through PSCU, a St. Petersburg, Fla.-based payments CUSO, increased their spending on credit cards by 24% and on debit cards by 16% from October 2020 to October 2021. Compared with two years ago, spending was up 31% for credit cards and 35% for debit.

The U.S. Census Bureau reported Tuesday that retail and restaurant sales, excluding vehicles and parts, rose 16.2% from October 2020 to October 2021 and rose 5% from September (or up 1.7% after seasonal adjustments).

PSCU’s payments index is based on data from credit unions that have been processing payments with PSCU since January 2019. It encompasses 2.5 billion transactions valued at $122 billion of credit and debit card activity in the 12 months ending Oct. 31.

The average credit card balance in this same-store group was $2,655, up 0.7% from September, but still down 4% from a year ago. “With the holiday shopping season underway, we expect to see some balance increases through the end of the year,” its report said.

By sector, the PSCU payments index and the Census Bureau showed the following 12-month gains:

October marked the first month of 2021 in which all sectors reported growth above 2019 levels for credit card purchases, while the overall credit card delinquency rate has remained 61 basis points lower than 2019 results for two months, finishing at 1.32%.

Yvonne Stelpflug, SVP, Advisors Plus at PSCU, said that milestone is another indicator of strong consumer spending. Retailers are grappling with supply chain issues and staff shortages, which could lead to inventory problems, higher prices and shipping delays. PSCU found credit union members responded by shopping early: goods sector purchases rose 13.6% by credit card and 9.5% by debit.

“Buyers are heeding the warnings of uncertainty as retailers grapple with supply chain difficulties and labor shortages,” Stelpflug said. “While the holiday season could be challenging for both retailers and consumers, we do anticipate strong demand and a rise in overall spend.”

CO-OP Financial Services, the payments CUSO based in Rancho Cucamonga, Calif., issued a report showing changes in spending from September to October:

CO-OP said the biggest surprise in its credit union spending data is a recent flattening of spending within the Amazon/Bookstores merchant category.

“The online retail juggernaut has seemingly hit some potholes on its path of growth,” the report said. “CO-OP’s data, month-over-month, showed the category as basically flat in October compared with the prior month — a shocking result considering Amazon announced early holiday deals in October this year, well ahead of Black Friday.”

CO-OP said attributed those results to “a combination of supply chain and labor shortages, which have caused noticeable shipping delays, even before the holiday shopping season gets fully underway.”

Meanwhile, it said Target, Walmart and other big-box retailers are able to stock up on key merchandise.

“Target is focused on those items that people want to touch and feel and need sooner rather than later,” John Patton, CO-OP senior payments advisor, said. “The company is ordering those items in bulk and making sure they are available in their stores for pickup or local shipping.”

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