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Electronic Card Transactions: June 2008
Embargoed until 10:45am  –  21 July 2008
Commentary

Electronic card transactions at a glance

  • There were 80 million electronic card transactions with New Zealand-based merchants in June 2008, with a value of $4.3 billion. This compares with 77 million transactions in June 2007, with a value of $4.2 billion.
  • There were 1.0 billion electronic transactions in the year ended June 2008, with a value of $55.2 billion. This compares with 923 million transactions with a value of $51.2 billion in the June 2007 year.
  • The mean transaction value for June 2008 was $54, which was the same as that recorded for June 2007. This follows on from the $54 recorded for May 2008 and the annual high of $59 for December 2007.
  • For the year ended June 2008, debit transactions made up 54 percent of all electronic transactions by value (credit was 46 percent). The ratio of debit to credit transactions has remained relatively stable since the beginning of the series in October 2002, with the credit ratio increasing 1 percent over that time.

Background

The Electronic Card Transaction (ECT) series are constructed from data that cover all debit and credit card spending with New Zealand-based merchants. These data include debit and credit transactions where the customer swipes their card at the point-of-sale terminal (card-present transactions) and credit card transactions with New Zealand merchants by mail order, telephone, email, Internet or direct debit from a credit card (card-not-present transactions). The data include purchases made in New Zealand by overseas card-holders, but exclude purchases made overseas by New Zealand card-holders.

Statistics on electronic card transactions are produced from aggregated data generated in the process of administering New Zealand-based electronic transactions. Statistics New Zealand would like to acknowledge the cooperation of the private sector in providing the data for publication, supporting the delivery of new statistics without significant additional burden on businesses in New Zealand.

Unless otherwise stated, all values include goods and services tax (GST). For further details about the coverage and characteristics of the ECT series, see the Technical notes of this release. These data have been released as an experimental series and Statistics NZ welcomes your feedback by email: info@stats.govt.nz.

Total electronic card transactions

Value

The total value of electronic card transactions with New Zealand-based merchants was $4.3 billion in June 2008. This was 3.1 percent higher than the $4.2 billion recorded for June 2007.

After adjusting for seasonal effects, the total ECT series was 0.6 percent lower in June 2008, which followed on from a 0.5 percent increase in May. The durables, consumables and apparel industries were the main drivers of this decrease, and were partially offset by increases in the non-retail and fuel retailing industries.

The total ECT trend series was 5.6 percent higher in June 2008 compared to June 2007. This was the smallest annual increase since the series began in October 2002. From March 2005 to December 2007 the rate of increase was generally between 8 and 10 percent, but since December 2007, the annual increase in the trend has slowed to less than 8 percent. The trend reflects not only changes in consumer spending and prices, but also changes in merchants' and customers' use of payment methods.

In the graph below, the seasonally adjusted and trend series almost match, which indicates a very regular seasonal pattern.

Graph, Value of Total Electronic Card Transactions.

Number of transactions

There were 80 million electronic card transactions with New Zealand-based merchants in June 2008. This was 3.1 percent higher than in June 2007, when there were 77 million transactions.

Impact of electronic card transaction processing outages

Occasionally, processing outages prevent customers from being able to make transactions at the point of sale. Where these are significant in extent and duration, they can affect the published results for the ECT series. The last significant outage occurred in December 2005. The impact of this is particularly visible in the seasonally adjusted decreases in the ECT series for December 2005.

Electronic card transactions – retail industries

The retail ECT series is a subset of the total ECT series, and measures transactions in the retail sector.

Value

After adjusting for seasonal effects, the retail ECT series was 0.4 percent lower in June 2008 than in May 2008. The durables industry was the main driver of this decrease, followed by the consumables industry – despite a substantial rise in food prices during June 2008. These falls were offset by a small increase in the value of fuel purchases in June 2008, consistent with a rise in fuel prices during that month.

The trend in the retail ECT series was 5.5 percent higher in June 2008 than in June 2007. This was the smallest annual increase recorded since the series began. The annual rate of increase in the trend has been decreasing steadily since October 2007 when it was 8.5 percent. Before January 2008, the annual rate of increase was generally between 8.0 and 10.0 percent.

Graph, Value of Retail Electronic Card Transactions.
 

Number of transactions

There were 71 million electronic card transactions in the retail industries in June 2008. This was 2.3 percent higher than in June 2007, when there were 69 million transactions.

Definition

The industries covered by the retail ECT series are defined by the following Australian and New Zealand Standard Industrial Classification (ANZSIC) categories:

  • retail trade (ANZSIC division G)
  • accommodation, cafes and restaurants (ANZSIC division H)
  • personal services (ANZSIC subdivision 95 of division Q).

Electronic card transactions – core retail industries

The core retail ECT series is a subset of the retail ECT series. The core retail industries exclude the motor vehicle-related industries, which, apart from automotive fuel retailing, generally have low rates of electronic transactions.

Value

After adjusting for seasonal effects, the core retail ECT series decreased 1.2 percent in June 2008 compared with May 2008.

The trend in the core retail ECT series appears to have declined in recent months, although more data points are required to confirm this direction. The trend was 1.7 percent higher in June 2008 than in June 2007, which was the smallest annual increase recorded since the series began. The annual rate of increase in the trend has been decreasing steadily since July 2007, when it was 9.3 percent. Before November 2007, the annual rate of increase was generally between 7.0 and 10.0 percent.

Graph, Value of Core Retail Electronic Card Transactions.  

Number of transactions

There were 60 million electronic card transactions in the core retail industries in June 2008. This was 2.7 percent higher than in June 2007, when there were 58 million transactions.

Definition

The industries covered by the core retail ECT series are a subset of those covered by the retail ECT series and exclude the motor vehicle-related industries ANZSIC groups:

  • Motor vehicle retailing (ANZSIC group G531)
  • Motor vehicle services (ANZSIC group G532).

Comparing the three series

Values

The three unadjusted series (for total, retail and core retail electronic card transactions) have similar seasonal patterns, peaking in December each year. For the year ended June 2008, 79 percent of electronic transaction spending took place in the retail industries.

 Graph, Value of Electronic Card Transactions.

The three series are increasing at different rates. In general, the total ECT series is increasing fastest, followed by the retail ECT series, then the core retail ECT series. This indicates that the sector outside the retail industries is the fastest growing market sector for electronic card transactions, for example in payment for local authority charges, utility bills or medical services 

 Graph, Annual Trend Increases in Electronic Card Transactions.  

The graph above shows that the trend pattern for retail and core ECT for June 2007 compared with June 2006 differs from the normal pattern, with the retail ECT trend showing slower growth. This effect appears due to fluctuating fuel prices during that year slowing the overall trend in retail ECT compared with core ECT.

The impact of rises in fuel prices on the retail ECT trend can also be seen in the following graph. The trend for the core retail series started to level off after about September 2007, whereas for the retail series the trend continued to increase.

Graph, Electronic Card Transactions Trnd Index.

The main difference between the two ECT retail series is that the automotive fuel retailing industry is not included in the core retail series. Automotive fuel retailing makes up approximately 80 percent of the value of the difference between the two series. Fluctuations in fuel prices are a key factor influencing the trend of the retail series.

Number of transactions

The three ECT series for the numbers of total, retail and core retail electronic card transactions have similar seasonal patterns to those for the transaction values, peaking each December.

 Graph, Number of Electronic Card Transactions.  

Comparison statistics

Comparisons with the Retail Trade Survey

For May 2008 compared with April 2008, the seasonally adjusted figures, as first published, were as follows:

  • total retail sales decreased 1.2 percent
  • core retail trade sales increased 0.7 percent
  • retail ECT series increased 1.2 percent
  • core retail ECT series increased 1.5 percent.

Statistics NZ has performed an analysis of the ECT series compared with the RTS. The results indicate the following:

  • Month-on-month movements in the actual (unadjusted) values of electronic card transactions provide a good indication of the direction of the RTS actuals, as the two series usually move in the same direction.
  • Monthly movements in ECT actuals are frequently different in magnitude compared with movements in RTS actuals.
  • The differences found in the actuals data flow through to the comparisons of the ECT and RTS seasonally adjusted series, which can differ in the direction and size of monthly movement. These differences have generally been outside the acceptable tolerances indicated by users for the use of the ECT series as a predictor of movements in the RTS.

There are several reasons why the RTS and ECT series differ. The series have significant differences in coverage, with the RTS including payments by cash, cheque and hire purchase, in addition to payments made electronically. For the year to March 2008, the retail ECT series (excluding GST) represented 58.3 percent of retail spending. Some industries, such as motor vehicle retailing, have low or virtually no electronic card activity because of other payment methods. Motor vehicle retailing can have a significant impact on the overall movements in the RTS.

Over the past few years, the uptake of electronic transaction technology among retailers and increasing card usage by consumers have led to an increasing share of retail sales by electronic card transactions, resulting in the ECT series having a much steeper trend than the RTS. Although this increase in share is slowing over time, it is still impacting on the movements in electronic transactions.

Given these differences, Statistics NZ does not recommend using the ECT series as an indicator or predictor of the RTS series.

Other statistics

  • For May 2008 compared with May 2007, actual credit card billings in New Zealand (including spending using New Zealand and overseas-issued cards), as issued by the Reserve Bank of New Zealand, increased 0.8 percent.
  • For June 2008 compared with May 2008, the Food Price Index rose 1.3 percent.

For technical enquiries, contact:
Henry Minish or Robin Loomes
Christchurch 03 964 8700
Email: info@stats.govt.nz

Next release ...

Electronic Card Transactions: July 2008 will be released on 21 August 2008.

 

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