News

Prepaid card use picks up in August, First Data reports

Vacations and back-to-school purchases spurred year-over-year growth of 6 percent in prepaid card use.

September 15, 2014

Retail spending in August attained the strongest growth in more than a year, according to statistics compiled by First Data for its monthly SpendTrend report. Prepaid cards saw the biggest increase, at 6 percent, while check-writing continued its downward trek.

Driven by August vacations, leisure spending growth — at 3.3 percent — was the strongest in six months, according to a news release. Hotel and travel categories rose 9.3 percent and 5.1 percent over the same period in 2013.

Overall retail spending growth was the strongest in more than a year with dollar volume growth at 2.8 percent in August (vs. 2.6 percent in July). Overall average ticket growth remained positive at 1.2 percent, slipping slightly from July’s 1.5 percent on a year-over-year basis, First Data said.

“Two important factors — back-to-school spending and late summer vacationing — contributed to strong overall consumer spending in August and despite stagnant wage growth and a moderate housing market, consumer confidence rose in August,” said Krish Mantripragada, First Data senior vice president of information and analytics solutions, in the release. “Robust credit card spending at 5.8 percent, was healthy again last month, surpassing both PIN and signature debit growth.”

SpendTrend tracks same-store point-of-sale data by credit, signature debit, PIN debit, EBT, closed-loop prepaid cards and checks from nearly 4 million merchants locations serviced by First Data in the U.S.