Bank cards increasingly used for low value purchases

Consumers are using their bank cards to make more low value purchases from shops, a Central Bank of Malta study shows with transactions hitting €1.2 billion last year.

The yearly average value of card transactions dropped from €58 in 2016 to €51 in 2020, showing customers are using cards for smaller value purchases.

The popularity of using cards to pay at shops maintained its upward trend with the value of payments transacted in this way increasing by 28% over a four-year period.

Card transactions increased from €902.3 million in 2016 to €1.1 billion in 2019 and even more to €1.2 billion in 2020.

The study shows that the volume of online transactions increased by 6.5% between 2019 and 2020 but the value dropped by almost 7%.

The CBM said this reflects the general drop in private consumption during the pandemic year but it also indicates that online payments are increasingly being used for low value transactions.

The impact of the pandemic on the tourism sector is also evident in the data for non-resident cards.

The upward trend in the volume and value of transactions carried out by non-resident cards until 2019 was interrupted last year.

The CBM said transactions fell by almost 50%, while the total value of transactions decreased by around 60%. This reflected the decline in tourist arrivals during 2020 due to COVID-19 restrictions.

However, while the consumption of non-residents in Malta decreased by around €1.3 billion, the value of POS payments by non-resident cards in Malta decreased by €402.8 million.

“The magnitude of the drop in the value of POS payments using these cards was relatively contained when seen against the drop in consumption in Malta. This indicates that many resident non-Maltese workers still use cards issued abroad,” the CBM said.