Processors Report Tentative Signs of Consumer Spending

While tales of unemployment, foreclosures, and other economic woes abound, some payments-industry reports indicate that consumers are coming out of their shells and spending more than they did a year ago, though the picture is still mixed.

JPMorgan Chase & Co. on Wednesday reported that its mega merchant-acquiring subsidiary Chase Paymentech Solutions processed 5.2 billion transactions in the third quarter, up 16% from 4.5 billion a year earlier. Total bank card charge volume grew 13% to $117 billion from $103.5 billion in 2009’s third quarter. For the nine months ended Sept. 30, Chase Paymentech processed 14.9 billion transactions and $342.1 billion in bank card volume, both up 14% from the year-earlier period.

JPMorgan Chase also said sales volume on its credit cards grew 7% in the third quarter to $79.6 billion from $74.7 billion a year before. Chase’s 2010 credit card volume through Sept. 30 was up 5% to $227.1 billion versus $215.3 billion for the equivalent year-earlier period.

Leading payment card processor First Data Corp., meanwhile, released its September SpendTrend report that said total card transactions processed by the company last month from merchant locations open at least a year were up 9.2% from September 2009. August’s transaction growth rate was 8.3%. Signature debit card transactions grew the most in September, up 13.9%, followed by PIN debit at 7.9% and credit cards at 3.4%. Payment card dollar volumes grew 7.6%, slightly below August’s 7.9% growth rate. Atlanta-based First Data did not release transaction or dollar figures.

Average tickets, however, fell 1.5% in September, the fourth straight month of decline. “Merchants lowered prices to attract shoppers and generate sales while consumers continued to search for discounts well into September,” First Data’s report says. “This resulted in lower average tickets but more frequent purchases.”

The National Retail Federation predicted earlier this month that 2010’s holiday retail sales would rise 2.3% to $447.1 billion. That growth rate would be below the 10-year holiday-season average increase of 2.5%, the trade group said, but much better than 2009’s 0.4% increase and 2008’s 3.9% decline.