Kiwis Leave Credit Cards at Home

Media Release

Monday, 16 February 2009

Kiwis Leave Credit Cards at Home

The latest figures from Paymark show Kiwis are continuing to manage their money cautiously by spending what they have rather than buying on credit. The number of purchases made with a debit card through the Paymark network alone increased 8.0% in January 2009 on the same period a year ago.

The number of electronic transactions for the month was 67.6 million, up 6% on January 2008, which equated to a total value of $3.43 billion and was up 1.5%.

However, the same cannot be said for credit cards, as Paymark data indicates the number of transactions with credit cards during January was more restrained and increased a mere 0.7%.

Simon Tong, Paymark Chief Executive Officer, says;”Our statistics suggest two key themes are emerging with regard to debit card growth. People are comfortable with using debit cards for payment because of the convenience and safety, particularly within food outlets and cafes, as these are often stores where the average spend is low. In addition, the average spend per transaction is declining, with the debit card figure of $36.50 down 1.9% below the same average 12 months earlier. Spending on big ticket items appears to be hardest hit.”

“In retail spending Kiwis are relying on debit cards to manage their money, currently preferring to access money they have now rather than money they think they might have in the future,” he adds.

Paymark data also shows that not only are food outlets enjoying growth but that department stores and clothing / footwear outlets are still going strong, while the appliance and furniture sectors are continuing to experience lower spending levels.

The regions enjoying fastest annual growth in terms of value (across all sectors in January) remained the two top regions of 2008, namely South Canterbury and Taranaki / Taupo. The regions with the slowest growth were Auckland / Northland, followed by West Coast and Bay of Plenty.

Paymark, arguably the world’s most advanced EFTPOS network, processes more than three quarters of all in store electronic transactions in New Zealand.

ENDS

Jan-09 Paymark transactions/$m/%pa/2008

Auckland/Northland/1,277.3/0.6%/4.7%

Waikato/250.9/1.2%/8.6%

Bay of Plenty/239.4/0.3%/5.6%

Gisborne/31.3/2.1%/7.9%

Taranaki & Taupo/80.9/5.5%/11.4%

Hawkes Bay/101.4/1.7%/5.6%

Wanganui/35.8/3.2%/6.6%

Palmerston North/101.8/1.2%/5.5%

Wairarapa/33.2/4.2%/6.7%

Wellington/336.2/3.1%/5.6%

Nelson/80.8/1.4%/6.6%

Marlborough/53.5/4.7%/7.9%

West Coast/32.9/-1.7%/10.4%

Canterbury/396.4/1.8%/6.7%

South Canterbury/56.1/7.5%/11.9%

Otago/190.2/2.2%/6.7%

Southland/84.0/2.5%/8.7%

About Paymark:

In 1989 three banks came together to form Electronic Transaction Services Limited. They had the vision of a national real time payment system. Through their commitment to the retail payments industry the company has developed what has arguably become the best EFTPOS system in the world.

EFTPOS appeared on the New Zealand retail scene in 1984, only five years after the country’s first Bank ATM (cash dispenser) was installed. New Zealand’s first EFTPOS system operated from a service station and a supermarket attached to a bank computer.

In March 1990 volumes through the network exceeded 1 Million transactions a month.

In 1994 the company increased its computer processing power to accommodate volumes exceeding 10 Million transactions a month. In 1996 Bank of New Zealand joined the network and EFTPOS as a payment mechanism entered a tremendous growth phase.

In 1998 ETSL passed another milestone - as the 1 Billionth EFTPOS transaction was processed. By the year 2000 EFTPOS was well and truly identified as a public utility. ETSL saw its 2 Billionth transaction pass through the system in November 2000 and 7 billionth transaction in October 2008. The system, rebranded as the Paymark EFTPOS network, processes over 75% of all electronic transactions in the New Zealand retail market on behalf of more than 50 card issuers and acquirers. More than 69,000 merchants and 90,000 terminals are currently connected to the network that is now 3DES and EMV compliant.

The company offers services to merchants, card issuers and acquirers for eftpos, eCommerce, mCommerce and ATM payment and related transaction processing.

ENDS