Card spending appear to decouple from consumption: Study
ANKARA
Card spending in recent years has decoupled from private consumption, largely due to consumers shifting from cash to card payments, according to researchers at the Central Bank.
Card spending is a significant indicator for monitoring private consumption, they said, adding that, however, interpreting card spending data without adjusting for this structural shift may overstate the strength of consumer demand.
“When adjusted for this effect, we see that card spending increased more moderately in recent years, particularly following the onset of monetary tightening, aligning more closely with private consumption,” they concluded in a study posted on the bank’s blog.
While the surge in card spending in recent years is partly driven by demand-side dynamics, the transition from cash — the traditional payment method — to cards also plays a significant role, they added.
This rise is attributed to technological advancements leading to digitalization and wider use of contactless payment systems, as well as rising inflation, which makes carrying cash more costly, they said.
According to the latest data from the Interbank Card Center (BKM), credit card spending rose 58 percent year-on-year to 1.7 trillion Turkish Liras in May.
The number of credit card transactions was up 14 percent to 1 billion.
There were 134.3 million credit cards in use as of May, a 9 percent increase from a year ago.
The number of contactless payments made with cards increased by 17 percent compared to the same period last year, reaching 1.2 billion transactions.
