On the cards
Every time we “put it on the plastic” we contribute to a fast and accurate indicator of the state of the New Zealand economy.
That's according to research undertaken by former University of Otago research assistant Corey Allan for his Master of Commerce degree.
Allan notes that New Zealanders are among the most frequent users of electronic-funds-transfer-at-point-of-sale technology in the world. In 2012 we collectively swiped our credit and debit cards about 1.2 billion times and spent more than $66 billion, accounting for about three quarters of our consumption spending.
Allan says the volume of these EFTPOS transactions is often reported in the media as a measure of our economic performance. His thesis explored the usefulness of this data as an economic indicator.
Allan concluded that electronic card transactions data closely mirrors other indicators of the overall state of the economy, such as gross domestic product and consumer spending, but does so more quickly.
“Since complete and accurate spending information can be collected from New Zealand's EFTPOS network in real time, policy-makers and researchers need not wait several weeks to make informed decisions, or to assess the current and forecast the future state of the economy.
“Electronic card transactions data therefore makes faster responses to economic conditions possible, potentially improving the quality of macro-economic policy-making in New Zealand.”