PSCU Payments Index January 2024: A Deep Dive into Holiday Spending – Part 3
Summary: Continued evidence of a soft economic landing, as well as softening consumer spending, closed out 2023. In the January 2024 edition of the PSCU Payments Index, we present the third installment of our three-part Deep Dive series on holiday spending, which includes insights into holiday season Buy Now, Pay Later (BNPL) activity.
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Key takeaways include:
- Debit purchase growth, up 4.9% for December, continued to outpace growth in credit purchases, up 0.7%. For transactions, credit grew 2.6% and debit grew 5.0% year over year.
- Holiday spending growth in the Goods sector softened in December when compared to November. Year-over-year growth in purchases for the overall Goods sector was down 1.3% for credit and up 2.9% for debit in December. For the cumulative holiday season, purchase growth in the Goods sector was down 1.2% for credit and up 2.7% for debit. For the cumulative holiday season, growth in CNP transactions (+2.2% for credit and +7.0% for debit) outpaced growth in CP transactions (-0.8% for credit and +0.9% for debit).
- The Consumer Price Index (CPI-U) increased 0.3% in December, while the 12-month rate of inflation was up 3.4%. Shelter contributed to more than half of the increase. Excluding the volatile Energy and Food sectors, the core CPI index increased 0.3% in December, putting the 12-month Core CPI index at 3.9%
- Growth in BNPL payments for the top BNPL merchants increased 24% for the cumulative holiday season (October to December) compared to 2022. These BNPL transactions represented 3.6% of the overall debit transactions in the Goods sector for the three-month period.
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