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We take a look at the number of credit card transactions as well as the total rand value of credit card transactions in South Africa taking place on a monthly basis. We will also calculate the average expenditure per transaction.
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Number and Rand value of credit card transactions in South Africa each month
The graphic below shows the total number of credit card transactions each month (on the left hand axis, and the blue line) as well as the total Rand value of credit card transactions each month in South Africa. And as the graphic shows, the trend in both number of transactions as well as the total Rand value spent has been on the increase and steadily so over the last 10 years.
In 2018 so far the average Rand value spent on credit card transactions amounted to R23.34billion, and the average number of credit card transactions so far in 2018 per month amounted to 49.22million transactions each month. That works out to 5 credit card transactions per person that is formally employed in South Africa, and a total value of R2 880 spent on credit card transactions per person formally employed in South Africa per month.
But the graphic above only tells part of the story as it only looks at nominal prices (current ruling prices as they happen) and not at rand values spent when inflation is taken out of the equation. That is where the next graphic comes in. It shows the average value per credit card transaction, both for nominal prices (not adjusted for inflation), and then for real prices (adjusted for inflation and all values expressed in 2015 prices). Thus the 2008 nominal prices are adjusted to what the values would be if 2015 prices were applied. What this does is take inflation out of the mix and makes values over time directly comparable.
But the graphic above only tells part of the story as it only looks at nominal prices (current ruling prices as they happen) and not at rand values spent when inflation is taken out of the equation. That is where the next graphic comes in. It shows the average value per credit card transaction, both for nominal prices (not adjusted for inflation), and then for real prices (adjusted for inflation and all values expressed in 2015 prices). Thus the 2008 nominal prices are adjusted to what the values would be if 2015 prices were applied. What this does is take inflation out of the mix and makes values over time directly comparable.
When looking at the graphic above, the red line which shows rand value spent per transaction in nominal prices (not adjusted for inflation) one can see that the underlying trend is upwards, I.e. the rand value spent per transaction is increasing. But when inflation is stripped out and all years rand value spent is expressed in terms of 2015 prices, one can clearly see that the actual real value (values after inflation has been taken out) has been declining over time. Implying that people are actually spending less money per credit card transaction.
Are people using credit cards to buy groceries and food and necessities these days when in the past the credit card was only pulled out for big ticket items? It sure seems like this is the case, and with credit being so freely available and accessible it is no real surprise that the number of transactions are going up but the real value spent per transaction is declining.
Are people using credit cards to buy groceries and food and necessities these days when in the past the credit card was only pulled out for big ticket items? It sure seems like this is the case, and with credit being so freely available and accessible it is no real surprise that the number of transactions are going up but the real value spent per transaction is declining.