Credit card payments down but online shopping on the rise

low angle as a woman approaches her front door where a package that she ordered online with her credit card awaits her on her front step

The past six weeks have forced a lot of changes onto Aussie consumers and credit card use is no exception.

Westpac noted a significant change in credit and debit card usage over the week ending July 24, 2021, in its Card Tracker Report, which creates an aggregate card activity score by comparing current card spend to the same period in 2019.

It revealed that nationally, card usage was at 99.6, the lowest and first sub-100 rate since early April 2021. This comes after a notable increase in activity the previous week.

VIC was hit the hardest. In the second week of its two-week snap lockdown, the state saw a significant 12.8 point dip. While, despite having the strictest lockdown and the least retail mobility, NSW saw the smallest drop of 1.6 points.

The data implies annual growth in card activity is now running slightly below its pre-COVID pace. Despite the drop in card usage, there is a notable increase in online card activity.

Westpac senior economist Matthew Hassan said: “With lockdowns ending in both Vic and SA, the next week should see these states rebound. All eyes will therefore again be on NSW.

“NSW has seen a surge in online sales which now account for over half of all transactions. With measures set to remain in place for a long time yet, a sharp economic contraction is unavoidable even if card activity holds on to this resilience”.

What’s the deal with online shopping?

Since the lockdown began in NSW, there has been a massive growth in online sales - going far beyond the highest rates of the 2020 COVID lockdowns.

Transactions with ‘card not present’ (CNP), meaning sales completed without the physical card, just the card’s information, are now the majority of transactions in the state for the first time. The rest of Australia is not too far behind, with 44% of sales completed being CNP.

Although this seems to be promising news, it is unclear if NSW’s consumer data will remain resilient in the face of such strict and prolonged lockdowns.

According to the report, it is possible the consistent card usage is due to a delay in the impact of the delta-related lockdown on consumers, but the longer lockdown goes on, the less likely this is the case.

Instead, it is more probable the NSW population has just adapted to the circumstances and embraced CNP shopping options.

Have you been shopping online more recently? Make sure you have the best card to meet your needs and budget. A great place to start is Mozo’s credit card hub for guides and credit card comparisons.

Compare credit cards - last updated 25 September 2021

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    13.99% p.a.
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    2.99% p.a. for 15 months and then 21.49% p.a.
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