Payments at POS terminals

As a look back at the year 2020, LPB Bank conducted a research of payments at POS terminals installed by LPB Bank.

The bank’s research shows that, since the beginning of December, there was a trend of decreasing purchases via terminals installed at points of sale and service provision – the number of transactions in December, prior to the emergency situation being announced, decreased by 23.5% year-on-year. This, of course, is logical, considering all the restrictions and safety measures introduced in light of COVID-19. In absolute terms, the decrease in funds spent was 13% compared to December 2019, since the average amount per purchase in 2020 was 13.7% higher, at EUR 32.98.

The decreased number of transactions via POS terminals in early December may be explained by the restrictions on weekend sales, which made many goods unavailable at brick-and-mortar stores. As people began to treat their spending more carefully in the uncertain economic environment, where the government would introduce further restrictions each week, they reconsidered their need for certain kinds of goods and services. With no possibility of travel, for instance, there will be little demand for tourism accessories unless great discounts are offered. In a generally negative emotional climate, people’s desire to shop for fashion or luxury goods also decreases, since these modes of public self-expression are no longer as effective as previously. At the same time, increasing amounts per purchase may be explained by a more considerate, prudent approach to shopping. Notably, the COVID-19 crisis is most sharply felt in areas where maintaining operations through remote employment is not a possibility. To a large extent, this is characteristic of poorly paid jobs, resulting in fewer small purchases.

A week ahead of the introduction of heavy restrictions, from 14th till 21st December, the volume of in-person purchases at POS terminals increased by 11.2%, with an average of EUR 34.24 per purchase – 18% more than the year before. Aware that traditional artisanal markets and appliance stores would not operate during the final week of the year, consumers rushed to purchase Christmas and New Year’s presents, which of course led to a spike in regular everyday expenses.

The most significant increase of the entire year was observed in August 2020, where the number of transactions at LPB Bank POS terminals grew by 35.7% year-on-year; the sharpest drop in the number of transactions was recorded in April, at 52%.

A review of performance in the year 2020 indicated that turnover grew the most at food stores (38%). Turnover at fast food establishments increased by 10%. The most precipitous decline, at 32%, affected the hospitality and beauty businesses, where LPB Bank POS terminals recorded a 29% decrease.

Consumption culture in 2020 became more conservative – people have not only fewer reasons to buy things, but they have also had time to think about their habitual spending so far and to find ways of getting by with fewer goods and services while maintaining their quality of life. Of course, the question remains as to how many people will return to their previous habits once restrictions are lifted, and how many will stick to a more frugal lifestyle, knowing that their purchases and habits used to be a matter of influence, rather than a matter of need.

We invite you to get acquainted with LPB Bank POS terminals

Yours LPB Bank