ETA Members Use Transaction Data to Assess Economic Impact of COVID-19

As the COVID-19 public health emergency continues to unfold, one thing is clear: the economic and human impact of this virus is significant.
ETA and its members are committed to supporting communities across the country, continent and globe as the situation unfolds. One key, unique way that ETA members are shedding light and helping policymakers, merchants, consumers and economists understand this crisis is by using their unique insight into transaction data to asses the economic impact of the virus on American businesses.

By analyzing their portfolios of hundreds of thousands of merchants in the United States, ETA members can get a unique look at spending trends per region, industry segment and other key data points to get a better understanding of the direct impact the world’s fight against the spread of COVID-19 is having on consumer spending.

ETA member CardFlight, a payments technology SaaS company, released data analyzing the impact of COVID-19 on small businesses by reviewing 500,000 transactions between March 2nd and March 23th. They found that small business sales were down 16 percent from the first week of March, and total number of transactions dropped 36 percent. The average transaction size grew from 31 percent, which helped dampen the effect on total sales.

Their data also showed that restaurants and bars were hit particularly hard in early March. Food and drink establishments as a whole were down 30 percent. Transaction volume for bars dropped nearly half. Overall retail sales grew 7.7 percent the second week of March but crashed 11 percent the third, CardFlight says in their report.

CardFlight also saw a change in how people chose to pay. Swipe and chip payments dropped by 24 percent over the last two weeks. Despite an increased focus on eCommerce, card-not-present transactions dropped 13 percent. Contactless payments comparatively remained steady in the second week, experiencing a 1.4 percent drop, but then dropped 42 percent in the third week. Invoice payments jumped 14.5 percent in the third week despite a 22 percent drop in the second week.

ETA member Shift4 Payments, an integrated payments processor, also released transaction data from their portfolio that reflected significant impacts from COVID-19 on American businesses during the month of March. Shift4, which processes payments 21,000 hotels and 125,000 restaurants, reports that hotel volume has dropped a staggering 86 percent since the first week of February. Restaurants have seen a 74 percent drop in number of transactions in the same period of time, and all other industries have seen a drop of 64 percent in volume. For hotels, that translates to a drop from 186 million transactions the week of March 1st, to only 46 million the week of March 15th.

ETA member Womply also posted a comprehensive data hub tracking transaction rates among a variety of industry verticals. By March 21st, all business revenue dropped 21 percent against last year’s totals. Variance in daily revenue totals for restaurants historically averages around .4 percent for restaurants. Since the COVID-19 emergency began, year-over-year daily variance in revenue for restaurants bottomed at -67.5 percent on March 21st, Womply found. Grocery stores, on the other hand, have averaged 25 percent growth in year-over-year daily revenue.

Transaction data is the only way ETA members are offering to assess the economic impacts of COVID-19. ETA member Homebase, an independent software vendor that creates employee management software for small businesses, reported double-digit decreases in employee hours scheduled on their platform corresponding to local and national shelter-in-place orders. On the day before forced closures began, hourly employees were working 19% fewer hours nationwide, Homebase reports. Once forced closures took effect on Tuesday, March 17th, the numbers dropped steadily. By Sunday, Homebase says, hourly workers at small businesses were working 62% fewer hours.

A week into the closures, the declines now appear to be stabilizing, Homebase says. On Monday, March 23rd, schedules rebounded slightly with only a 52% reduction in hours.

Employee attendance also dropped significantly, according to Homebase data. The number of employees going to work dropped 17 percent on the day before many closures went into effect. With closures now in effect, more hourly workers at small businesses are not working. On Tuesday March 18th, out of every 10 employees we would normally expect to report to work did not go. By Sunday March 22nd, that number increased to 6 out of 10.

Like scheduling, the employee attendance numbers have also appear to have stabilized, albeit at a low rate. Monday and Tuesday this week saw numbers hovering at 50% to 55% of hourly small business employees not going to work, Homebase says.

ETA members are providing more than just data to their customers and communities as a whole. Click here to visit ETA’s COVID-19 Resources website to see more information about the payments industry’s response to COVID-19.