The Effect of COVID-19 on Visa Payment Volumes

Visa has noted that its U.S. payments volume declined at a slower pace in May 2020 compared to the previous month. This may indicate that consumers are spending more due to the easing of lockdowns related to the coronavirus (COVID-19) pandemic. In addition, Visa stated in a filing report that in May, the total volume of U.S. payments declined by 5% year-over-year. 

In terms of the quarter-to-date information, Visa indicated a 11% drop in U.S. payments volume. Meanwhile, across-border numbers, which excluded intra-Europe transactions,  experienced a 45% decline in revenue in May. Comparatively, cross-border volume that included intra-Europe transactions were at 35% the same month. It should also be noted that the volume for global processed transactions dropped to 12% in May. Back in April, this was at 24%. 

The COVID-19 situation has indeed had a profound impact on the way consumers make purchases. This entails purchase intentions, delayed plans, as well as preferred payment methods.

According to a Kantar press release on consumer attitudes, behaviours, and expectations, it was found that 38% of American consumers intended to continue buying from the online stores they started to visit amid the pandemic. It was also found that 31% of those surveyed intended to continue purchasing new products and services they began to buy online amid COVID-19. Kantar noted that such ecommerce activities may outperform retail in the year ahead.

“Every brand scaling their ecommerce channels will need to ensure their online customer experience, including sustainability credentials, supports their brand,” the findings revealed. “Our research shows 25% of online shoppers find the experience less satisfying than visiting a physical store.”

In turns of delayed purchasing plans, they encompass tickets for vacations and holidays, flights, as well as concerts. A report by the GlobalWebIndex indicated that while 30% of U.S. internet users delayed purchases for vacations and holidays, 25% of respondents delayed buying flight tickets. Meanwhile, 21% of those surveyed said they would hold off on concert and theatre tickets. 

As social distancing measures get enacted, it may come as no surprise that less consumers wish to travel and be part of large group gatherings. This is also reflected in the payment methods of consumers, as a survey conducted by YouGov found that while 30% of Americans used credit cards to buy restaurant takeout in December 2019, this percentage skyrocketed to 51% in April 2020. In terms of grocery shopping, credit cards saw an increased popularity, rising to 46% from 27%.

The COVID-19 pandemic has changed the way consumers shop, and Merchant Broker is here to help businesses adapt to these changes. As a global leader in brokering merchant accounts and the ultimate resource for payment card acceptance, Merchant Broker works to help clients achieve more through payments while delivering an outstanding customer experience. 

To contact Merchant Broker, call 1-888-668-0733 or email info@merchantbroker.com.

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