PYMNTS May 2024 Last Transactions report brings light to spendign and payment patterns accross different generations.
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GLOPYMNTS May 2024 Last Transactions report brings light to spendign and payment patterns accross different generations.
Read full report here.
Key Takeaways:
- Payment by credit card decreased slightly in some spending categories last quarter as money-in-hand spending increased, with the use of cash up 34% from last year for groceries and 23% for retail suggesting that consumers continue to confront economic uncertainty.
- Meanwhile, digital wallet usage surged among younger consumers, with debit cards now underpinning half of digital wallet transactions across grocery and retail.
- cash spending at restaurants has increased 12% since 2023, with the use of cash again gaining ground last quarter to approach 23% of spending in this category among older, wealthier consumers.
- Older, high-income consumers have driven a Q1 travel surge, boosting spending across all age and income groups. PYMNTS Intelligence’s latest “Last Transactions” analysis shows a 24% increase in credit card usage for travel from Q4. Older consumers (44+), earning over $100,000, consistently outspend younger and lower-income groups. They are on track to match their Q1 travel spending of $1,202.10 via credit card, which had dropped to $654 in Q2 2023 but rebounded to $1,061.30. Younger high-income consumers increased their spending from $222.50 in Q4 2022 to $413.30 in Q1. Older low-income consumers significantly boosted their spending from $39.70 in Q3 2023 to $341.30 in Q1, while younger low-income consumers saw an increase from $106.20 in Q3 2023 to $184.11 in Q1. PYMNTS Intelligence attributes these trends to older consumers’ trust in credit providers, who offer protections against trip cancellations and fraud. Additionally, older consumers, often retired, have more leisure time to travel.
Factors Driving Travel Spending:
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Business Travel: Spending has surged, especially among large multinationals. American Express Global Business Travel reported an 11% year-over-year increase in transactions for global multinationals in Q1, compared to 5% for SMBs, with notable growth in sectors like technology, professional services, and pharmaceuticals. Airlines such as Delta, United, and Alaska Airlines report corporate travel bookings nearing or surpassing pre-pandemic levels.
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Card-Linked Offers (CLOs): A PYMNTS Intelligence study with Banyan found travel credit cards increasingly popular, especially among families. About 64% of consumers plan to use CLOs for local travel and 60% for long-distance travel in the next three months. Families with children show a higher inclination to use CLOs for travel. Travel is a top consumer choice when using CLOs, surpassing groceries and streaming services.
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Buy Now, Pay Later (BNPL): A report from PYMNTS Intelligence and Splitit found that three in five consumers used split-payment options in the past year, with 37% using BNPL. Over 14% of consumers used BNPL for travel-related services.
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Loyalty Programs: Recent surveys show that travel rewards programs are becoming more aggressive, focusing on profitability by encouraging higher spending and introducing new rewards. A 2023 survey from travel technology company Arrivia indicated a shift in program goals from member acquisition and retention to profitability.
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Source: PYMNTS
