Tuesday, June 25th, 2019
In a surprising twist, first-quarter growth for leading merchant processor First Data Corp slowed, with brick-and-mortar surpassing e-commerce. It is rare that physical merchants should post a higher sales increase than their online counterparts.
According to its latest SpendTrend report, First Data says total payment card spending at U.S. merchants for around a year grew 2.3% year-over-year in the first quarter – down from 2.8% in 2018’s fourth quarter and 4.9% in the third.
“There has been a steady slowdown in spending through the last three quarters,” the report says.
“1Q19 was especially turbulent, as February reeled from the five-week government shutdown, and a barrage of winter storms. But, consumer spending rebounded strongly in March to levels not seen since August 2018. This helped salvage 1Q19 results.”
While the report did not delve into the actual dollar or transaction numbers, more information is available on the attention-grabbing deal between New York City-based First Data and Fiserv Inc. The company is set to acquire First Data for $22 billion, and reportedly processed an incredible $2.3 trillion in U.S. payment volume just last year from 84 billion transactions.
Other information included in the First Data report was the fastest growing major card types:
- PIN-debit was the fastest growing, with first-quarter volume up 4.1%,
- Credit card spending grew 2.5%,
- And signature debit volume grew only 1.2%.
Physical Stores Surpass E-Commerce
The report also revealed a big surprise: brick-and-mortar surpassed e-commerce volume growth due to a considerable slowdown. During the first quarter of last year, online volume grew more than 8 percent. Meanwhile, physical stores posted a growth rate of just over 3 percent. Fast forward a year later, same-store volume at a physical store grew just 2.4 percent, while e-commerce increased 2.1 percent.
“Even though e-commerce has consistently outpaced the growth at brick-and-mortar stores, it too has had a steady decline in growth over the last five quarters,” the report says.
And what about merchants themselves? The report listed the following merchant categories as the top three for growth:
- Computer and software stores grew 11.3%,
- Steamship and cruise lines grew 10.2%,
- And quick-service restaurants were up 8.8%.
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