A fall in the monetary volume of purchases on Visa cards and a rise in the number of transactions shows that, umm, the apocalypse is just around the corner. From the FT:
Visa said consumers spent less during the quarter as the global recession inspired greater thriftiness, resulting in a 7 per cent decline in year-on-year cash volumes to $969bn.
However, the number of processed transactions grew as consumers increasingly used their cards in preference to cash or cheques. The total number of processed transactions was 10.3bn in the quarter, an 8 per cent increase year-on-year.
Let’s translate this: a) people know they’re in trouble so are spending less on big ticket items but b) they’re paying for more and more smaller, everyday, and even essential items on credit. Which means they’re putting off the day of reckoning when they just can’t pay the debt.
Let’s try an alternative explanation. From Visa’s (Europe) previous quarter’s results:
Ecommerce continued to grow strongly with a 26% increase in transactions proving online retailers are winning market share from other retailers. The number of transactions on debit cards also grew very strongly by 14%.
Ah: we’ve a structural change in where people buy things meaning that we’ve a structural change in the method people use to pay when buying things. Note also that debit cards do not imply credit being used.
Hey, your brain cells, your choice.