Consumer Trends 2020: Spending Behavior in an Unprecedented Year

consumer trends 2020

Maru/Matchbox’s MoneyScreen interactive payments innovation platform evaluates consumer perceptions of payment concepts, both traditional and groundbreaking, that may or may not be in-market yet. This tracker helps us, and our clients, assess and keep a pulse on how the payments world is constantly innovating, and which payment methods or brands are resonating with consumers.

We feel it is imperative to look beyond what consumers are saying, and dig more into how they feel and behave. With this view in mind, I wanted to understand how spending behavior, in general, is changing in light of the unprecedented year we are all facing and the heightened emotions we are all feeling. Exploring behavioral shifts would allow me to see if there are any interesting consumer trends in the way regular consumers are approaching paying for purchases and bills.

Spending on purchases is down, but not bill payments

In our study, on average, people spent $1,127 on purchases in Q3 this year, which in comparison is 93% of the $1,214 spent in Q4 of 2019.

The same pattern is not really seen on bill payments where the average spend for the two aforementioned quarters was $956 (Q3, ‘20) and $971 (Q4, ‘19) respectively, which suggests that people’s bills are not really changing (only down by 1.5%) and likely any deferment plans and other special provisions by companies and governments are coming to an end. For example, moratoriums on utility shutoffs which were put in place by state and local governments across 32 states are largely coming to an end, and many had already been taken away by the end of September.

Credit card spend has been unpredictable

There doesn’t seem to be a clear trend in the proportion of overall spend on purchases being reflected by credit card payments over the past year. The following chart shows a bit of a bell curve with Q1 and Q2 2020 showing that credit card spend made up nearly half of all purchases. One might think that the reliance on credit would be adversely impacted by declining consumer sentiment, but these numbers alone don’t really reflect what we know about the state of the country (and the world) where it comes to a drop in consumer confidence after the onset of the pandemic (at the end of Q1.)

proportion of consumer credit card spend on purchases 2020

Bank Network Payments (Debit | Online Bill Pay/ACH | Checks)

Layering on other forms of payment (not including cash) in this analysis, the trend shows a steady increase in the reliance of bank-based payments, i.e. a combination of Debit, checks, and ACH (i.e. automated clearing house/online bill pay, which is a way to move money between accounts at different banks and online financial institutions electronically).

This combination of bank network payments is showing a steadily increasing share of purchases over the past year, and even with the Q3, 2020 pullback in overall spend on purchases it still sits close to its average proportion of purchase value for the past year.

Consumer bank-based payments 2020

This rising trend in bank-based payments might suggest a conservative mindset among consumers where it comes to only spending money they currently have in their bank accounts.

Composite Payment Ratio

What proves to be even more insightful is when we create a ratio of Debit, ACH and Check spend on purchases to Credit card purchase spend. This ratio much more clearly correlates with the trend in consumer sentiment, albeit it being a negative one (and almost a mirror image). When the ratio stays flat so does consumer sentiment, and when the ratio increases we see a corresponding decrease in consumer sentiment, implying a greater level of consumer pessimism is associated with a greater reliance on non-credit payments.

Credit Ratio vs. Consumer Sentiment 2020

Consumer sentiment scores referenced are from ‘University of Michigan, Survey Research Center, Surveys of Consumers’ after taking a simple average of their monthly Index of Consumer Sentiment for the relevant quarters. Source:

On a broader/longer-term perspective, we know that ACH payments and online bill payments are on the rise and check usage is trending downwards, but the usage of these together (along with debit) as a proportion of credit spend might be a good proxy to continue to understand general consumer sentiment and their desire to spend and/or take on more debt. This shows very clearly that how people behave and how they feel are very closely related.

These insights from our MoneyScreen product reside in Maru’s HUB interactive data visualization dashboards  that allow you to filter, track and compare consumer payment behavior data. If you would like to dig in further, please contact our team today.

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