The spending momentum of 2017 has continued into January, albeit at a slightly slower pace.
Auckland remains one of the slower growing regions in terms of spending.
Spending nationally through Paymark totalled $5014 million in January. Paymark covers more than 100,000 terminals and accounts for more than 75 per cent of the New Zealand payments landscape.
The underlying annual spending growth rate of 5.3 per cent was slightly below the average of 2017 (5.4 per cent). In seasonally adjusted terms, underlying spending was up 0.3 per cent on December, also slightly below the 2017 average (0.5 per cent).
The Paymark figures provide several insights into how trends that were evident in 2017 are shaping up for 2018.
First, spending in Auckland/Northland is still growing but at a slower rate than in early 2017 and slower than in other regions. The 3.9 per cent growth rate between January 2017 and January 2018 was similar to the 3.6 per cent growth rate averaged in the second half of 2017 and below the 5.2 per cent first half 2017 average.
Meanwhile underlying spending growth in the rest of New Zealand went from 6 per cent in first half 2017 to 6.2 per cent in the second half and maintained that 6.2 per cent in January 2018. It is the smaller regions leading the way at present.
For January, the highest annual underlying growth rates were recorded by merchants in Marlborough (16.4 per cent), which includes Kaikoura in the Paymark statistics, Southland (13.8 per cent), Wanganui (11.5 per cent), West Coast (11.2 per cent) and Wairarapa (11 per cent).
The second trend extending into 2018 is the shift to more frictionless customer experiences during payment. The number of payments made with the traditional Eftpos card through Paymark remains high at 64.3 million in January 2017, albeit this number only increased 0.2 per cent between January 2017 and January 2018 in underlying terms.
However the number of payments through Paymark with cards provided by credit card companies, including contactless cards, increased to 41.5 million payments or up 19.3 per cent in underlying terms.
The combined effect is rapid payment, seamless banking and insightful real-time statistics. The third trend is a generally falling average transaction value, consistent with a low general inflation rate of late. The average transaction size in January of $47.36 was 2.2 per cent lower than 12 months earlier.
Some of the lower value reflects increasing use of cards for smaller payments but the fact that the rate of decline has increased in recent months is suggestive of low inflation pressure extending into 2018.
The average transaction value had been declining by 0.3 per cent in first half 2017 and by 1.7 per cent in the second half. A notable exception to the trend is the average transaction size at fuel stations increasing 0.9 per cent between January 2017 and January 2018 to $46.92.