Foreign credit cards help drive spending increase

Foreign credit cards help drive spending increase

Auckland, Thursday 9 March 2016:
Paymark figures confirm that foreign tourists are contributing significantly to local spending. A total of $278.8 million was transacted through the Paymark network in February by holders of credit cards that have been issued overseas, an increase of $35.6 million or 14.6% since February 2015.

The spending growth was very noticeable in regions such as Otago (27.1% increase year on year) and Southland (29.7% increase), showing the continued appeal of Queenstown and Milford Sound. Conversely, annual spending growth with the foreign-issued cards was more modest in Gisborne (3.8%), Hawkes Bay (4.7%) and Wellington (3.5%).

By country of origin, Australian cards were our biggest spender with $54.591 million, followed the UK ($38.727m) and US ($36.284m). In terms of growth, however, cards issued in South Korea were up 30.9%, Japanese cards up 25.2% and Chinese cards were up 23.7%.

Paymark Chief Marketing Officer, Tim McFarlane, says that while the current residence of the card holder is not known, it is reasonable to presume that a large proportion of cards and the spending growth was by tourists.

“We can’t see whether these cards are carried by tourists but the spending in tourism destinations would seem to suggest a large percentage are visitors. Some cards of course will be carried by residents in New Zealand who continue to use their offshore cards and accounts for local purchases.”

“Interestingly, cards used in New Zealand in February came from 161 different countries, showing the breadth as well as the strength of the tourist market.”

McFarlane says comparing year on year figures for February will be skewed by one-off events, including the Cricket World Cup last year and the leap year this year but the key inference remains that foreign card spending growth is strong.

“It is difficult to determine what a ‘normal’ February would look but the foreign credit card growth rate was above the 11.0% underlying annual growth for all cards through Paymark in February, implying foreign card spending is adding to the local growth impetus at present.”

ENDS

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