Lockdown measures from the COVID-19 pandemic and joblessness that came as a result, contributed to a more than 40 percent drop in consumer spending, according to data released by The Central Bank of The Bahamas (CBOB).
In the just-released Monthly Financial and Economic Developments report for July, the CBOB notes that debit card transactions dropped by 41.6 percent, while credit card usage dropped nearly 25 percent.
“As The Bahamas continues to navigate the COVID-19 pandemic, the curtailment in private consumption expenditure was reflected in retail payments indicators for the second quarter of 2020. Specifically compared to the first quarter of 2020, the volume of debit card transactions declined by 41.6 percent to 2.3 million, while the corresponding value fell by 23.4 percent to $370.3 million,” the report states.
“Further, when compared to the previous quarter, credit card usage reduced by 24.9 percent to 607,152 transactions, while the associated value decreased by 31.5 percent to $150 million. Relative to the second quarter of 2019, debit card transactions dropped in volume by 6.5 percent and in value by 8.3 percent; credit card usage fell by 10.8 percent, but with total payments for goods and services softening by just 0.2 percent.”
Cash withdrawals from automatic teller machine (ATM) terminals also contracted by volume and value during the second quarter.
“Although the number of ATM/ABM terminals increased to 382 from 379 in the first quarter, both the volume and value of transactions contracted, by 28.6 percent to 1.7 million and by 11.2 percent to $448.4 million, respectively, in the second quarter; comparisons were also decreased by 22.6 percent and 4.2 percent respectively, against the 2019 estimates,” the bank noted.
“Despite many businesses experiencing losses due to mandated closures, the total number of merchant accounts firmed by 2.5 percent to 15,247 accounts in the three months to June. The outturn was underpinned by a 3.1 percent growth in New Providence to 10,754 accounts and a 4.1 percent rise in the Family Islands, to 2,680 accounts. These improvements overshadowed the 3.3 percent reduction in Grand Bahama, to 1,813 accounts.”
While COVID-19 concerns prevail, CBOB stated there was a five percent boost in electronic banking users, as more businesses and customers utilized contactless solutions.
Electronic banking users increased to 84,275, compared to a 52.2 increase in 2019.
Expectations are that, beyond the pandemic, consumers will embrace greater use of electronic banking and other digital payments solutions.