ST. PETERSBURG, Fla.—The 2024 holiday shopping season delivered strong payments results for the last month of the year, Velera reported.
Aided by the late occurrence of Thanksgiving, growth for December holiday spend, along with overall credit and debit results, were positive. Credit posted the best monthly performance for all of 2024 and aided the full-year 2024 growth to show positive year-over-year results, the January edition of the Velera Payments Index shows.
Debit, which had positive growth for each month of 2024, finished December close to the full-year results for purchases and transactions.
“Consumer spending was remarkably sustained throughout the holiday season in the face of increased budget consciousness, lower overall consumer confidence and real uncertainty about the future. The continued growth of online shopping and mobile purchases, as reflected in card-not-present transactions, was also notable,” said Taylor Nelms, Sr. director, market insights & advisory services, Filene Research Institute. “Looking ahead to 2025, we see both optimistic trend lines and some worrying indicators. For many credit union leaders, there are concerns about asset quality deterioration on their balance sheets – which may impact consumer spending, especially considering record levels of consumer credit card debt. Additionally, the unsettled regulatory and policy environment is generating additional uncertainty. It will be critical for credit unions, in the face of this uncertainty, to avoid decision paralysis and remain proactive in their strategic decision-making.”
Key takeaways for December include:
- For the month of December, year-over-year growth rates strengthened, impacted by the 2024 Thanksgiving holiday timing and subsequent peak shopping days occurring five days later than in 2023. Debit purchases were up 4.3% and credit purchases were up 4.0% in December. Debit transactions were up 2.5% and credit transactions were up 3.0%.
- For both credit and debit, the Goods sector had the biggest impact on the year-over-year increase, accounting for roughly half of the growth in purchases. Money Services had been the top contributor to debit purchases growth since March 2024. In December, Money Services accounted for 1.4% of the debit purchases growth while Goods accounted for 1.9% of the overall 4.3% increase.
- The 12-month CPI through December increased by 2.9%, up 0.2% from November. The Energy index increased 2.6% and accounted for 40% of the overall increase. While an increase in CPI could point toward a rate reduction, other key indicators will most likely lead to no near-term interest rate cuts by the Fed, Velera said.
- The 2024 holiday shopping season ended with strong consumer purchasing and a surge in Card Not Present (CNP) activity. For the cumulative three-month holiday season, growth in Goods sector debit purchases was up 5.4% and growth in Goods sector credit purchases was up 0.6%. “Of our tracked major retailers, all were positive for growth in credit and debit purchases and transactions. Much like the 2023 holiday season, Amazon again had the strongest growth for debit purchases, up 8.0% and credit purchases up 4.5% for the cumulative period,” Velera said.
The full report is available for download here.