In many ways, reports Packaged Facts‘ just-released Co-Branded Credit Cards in the U.S., the payments industry continues with its longer-term trends, albeit with COVID-19 curves and warp-speed accelerations.
In terms of dollar purchasing trends, overall purchasing volume for the largest ten co-branded programs is down 5% due to the pandemic and its devastation of the travel and leisure industries, According to Elizabeth Rowe, financial services analyst for Packaged Facts, “the current list of the ten largest co-branded card programs is therefore quite different from pre-COVID rankings.”
Despite very challenging times for the travel industry, Marriott was able to stimulate co-branded card usage by allowing its loyalty program members and cardholders to donate Marriott points to healthcare charities and organizations assisting particularly vulnerable populations. Costco, Amazon, and Target, in turn, tapped into shoppers’ ongoing need to buy essentials during the pandemic, including through home delivery. Best Buy benefited from consumers spending most of their time and entertainment budgets in their home.
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Consumer payment trend data in the Packaged Facts’ report show that about six in ten consumer payments are now made with debit, credit, or prepaid cards. Debit cards are used the most, followed by credit cards then by cash. More than half of consumers do not use paper checks at all, and 2019 was the first year that consumers used credit cards for more payments than cash.
Younger adult consumers have been especially disinterested in cash; a third of those under age 50 say they never use cash when paying in-store. Digital channels have given rise to their own forms of payments, with almost two-thirds of consumers having adopted at least one online payment method, such as PayPal, Venmo, or Zelle.
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About 29% of adults (or 73.7 million) have co-branded credit cards in their name, somewhat below the 32% of adults with store-only credit cards. By type of co-branded credit card, 17% of adults have department store co-branded cards, compared with 5% with warehouse club co-branded cards, 5% with Amazon/Prime co-branded cards, and over 2% with airline/hotel branded cards. Frequency of use patterns, however, reset the hierarchy.
