Card-Present vs. Card-Not-Present – The Oscillation in Use Cases Continues in Both Retail and Business Segments
As of January 2023, several industries have experienced declines in card-present transactions, particularly in the context of the COVID-19 pandemic and the increasing adoption of digital and contactless payment methods.
Some of these industries include:
Retail: Many brick-and-mortar retail stores faced challenges during lockdowns and social distancing measures, leading to a decrease in in-person shopping and card-present transactions.
Hospitality and Travel: Hotels, airlines, and other travel-related businesses saw significant declines in card-present transactions due to travel restrictions, event cancellations, and reduced consumer confidence in leisure and business travel.
Entertainment and Events: Movie theaters, concert venues, and sports stadiums experienced declines in card-present transactions as many events were canceled or postponed, and in-person attendance was restricted.
Dining and Restaurants: Restaurants and cafes faced challenges with reduced capacity, closures, and shifts towards takeout and delivery services, impacting card-present transactions at physical dining locations.
Transportation: Public transportation systems, taxis, and ridesharing services saw declines in card-present transactions as people traveled less frequently and opted for alternative modes of transportation. These declines in card-present transactions were often offset by increases in online and mobile payments, as consumers adapted to remote shopping, digital services, and contactless payment options.
Industry Trends: Increases in Growth in Card-Present Transactions (Merchant Categories)
Several industries have experienced increases in card-present transactions due to various factors such as changing consumer preferences, technological advancements, and shifts in business models. Here are some industries that have seen growth in card-present transactions:
Grocery and Supermarkets: With more people cooking at home and stocking up on essentials during the COVID-19 pandemic, grocery stores, and supermarkets have seen an increase in card-present transactions as customers purchase groceries in person.
Home Improvement and DIY Stores: As homeowners spent more time at home and invested in home improvement projects, stores selling building materials, hardware, and DIY supplies experienced growth in card-present transactions.
Pharmacies and Drugstores: Pharmacies and drugstores have seen an increase in card-present transactions, particularly for prescription medications and healthcare products, as people prioritize health and wellness during the pandemic.
Pet Supplies: With pet adoption rates surging and increased spending on pet care products and services, pet supply stores have seen growth in card-present transactions as pet owners shop for food, toys, and other supplies in person.
Outdoor and Sporting Goods: Outdoor recreational activities such as hiking, camping, and cycling have become more popular during the pandemic, leading to increased card-present transactions at outdoor and sporting goods stores.
Home Furnishings and Decor: With more people spending time at home and focusing on creating comfortable living spaces, home furnishings, and decor retailers have seen growth in card-present transactions as consumers shop for furniture, decor items, and household essentials.
These industries have benefited from consumers’ shifting spending habits and increased demand for products and services that support remote work, home life, and recreational activities.
Top Merchant Category Groups for Businesses
While detailed Mastercard® SpendingPulse™ data is not publicly available, we can make educated guesses about the top MCG (Mastercard SpendingPulse Category) categories for businesses based on common industry trends and consumer behavior. Here are some categories that are likely to be significant for businesses:
Wholesale Trade: Businesses often make bulk purchases of goods and supplies from wholesalers to stock inventory for resale. This category encompasses a wide range of industries, including wholesale distributors of consumer goods, industrial equipment, and raw materials.
Manufacturing: Manufacturing businesses purchase raw materials, components, and equipment to produce finished goods. This category includes spending on machinery, materials, and production processes across various sectors such as automotive, electronics, pharmaceuticals, and consumer goods.
Professional Services: Businesses frequently spend on professional services such as legal, accounting, consulting, marketing, advertising, and IT services to support their operations, compliance, and growth strategies.
Technology and Software: Businesses invest in technology infrastructure, software applications, hardware devices, and IT services to enhance productivity, efficiency, and innovation. This category includes spending on software licenses, cloud computing services, cybersecurity solutions, and digital transformation initiatives.
Financial Services: Businesses engage in financial transactions and services such as banking, lending, insurance, investments, and payment processing. This category encompasses spending on financial products, services, and fees to manage cash flow, mitigate risks, and optimize financial performance.
Retail: Businesses purchase inventory, equipment, fixtures, and supplies for retail operations, including stores, e-commerce platforms, and distribution channels. This category covers spending on merchandise, packaging, logistics, and marketing materials to attract and serve customers.
Transportation and Logistics: Businesses incur expenses related to transportation, shipping, warehousing, and distribution of goods and materials. This category includes spending on freight services, logistics providers, transportation equipment, fuel, and supply chain management solutions.
Real Estate and Construction: Businesses invest in real estate properties, land development projects, construction activities, and facility management services. This category encompasses spending on property acquisitions, construction materials, building permits, and property management.
Healthcare Services: Businesses provide healthcare benefits, wellness programs, and medical services to employees and their families. This category includes spending on health insurance premiums, medical care providers, pharmaceuticals, and employee wellness initiatives.
Hospitality and Entertainment: Businesses host events, conferences, meetings, and corporate gatherings to engage clients, partners, and employees. This category covers spending on event planning, venue rentals, catering services, entertainment, and hospitality accommodations.
These categories represent significant areas of business spending across various industries and sectors, reflecting the diverse needs, priorities, and strategies of companies operating in today’s economy.
