Presented by : Yoel Finkel Central Bureau of Statistics, Israel OECD STESEG Meeting, Paris, Sept Credit-Card Purchases as a Short-Term Indicator

2 Credit Card Purchases Credit card payments, are rapidly becoming the most prominent way for customers to pay for their shopping. A growing number of shoppers are replacing cash money transactions with the convenience of credit cards. Cards are a safer and more convenient alternative to drawing cash money.

3 Source: Israel - Bank of Israel (cards in use) and CBS Number of cards issued per capita, by country EU countries: ECB (European Central Bank),

4 Relative importance of payment instruments: Card payments (percentage of total number of national transactions) Euro Area Total Cards, in particular debit cards, are increasingly replacing cash and cheques The euro area total covers the EU Member States that had adopted the euro at the time to which the statistics relate

5 Cards, in particular debit cards, are increasingly replacing cash and cheques Source:

6 The Credit Card Purchase index series is a monthly indicator published by Israel Central Bureau of Statistics from 2002 Credit card purchases by private consumers in 2008 accounted for 37% of the total private consumption that year*. * Bank of Israel information on Israels banking system, Credit Card Purchases

7 NUMBER OF CREDIT CARDS USED IN ISRAEL (millions) Source: Bank of Israel

8 There are 3 companies who issue credit card in Israel, a small and crowded market and therefore Data are confidential. Publishing the aggregate market share is forbidden. ICBS publishes only indices (base year 2002 = 100) Isracard, Leumi Card, Cal

9 Indices in Constant Prices In order to generate indices in constant prices the accumulated purchases in each division are deflated by the relevant CPI item. Publishing of Data Indices of Credit Card Purchases at constant prices, seasonal adjusted and trend indices are published monthly, with a lag period of 20 days from the end of the month.

10 Credit card purchases - divisions According to Credit card companies reports, there are 4 type of Sectors, each sector is divided into sub-sectors (divisions): DivisionSector Including restaurantsFood and beverages Clothing, footwear, electrical and electronic equipment and furniture Manufacturing products Insurance, flight and tourism, leisure and entertainment, municipally and government services Services Fuel, electricity and gas, computer and software, transportation equipment and services, communication equipment and services, books, office equipment and advertising, medical services and drugs etc. Other goods and services

11 Israel statistics Credit card purchases in 2008, by division

12 Israel statistics Percentage of annual growth, 2008 original data, constant prices 3.7Total private consumption expenditure 6.0Total credit card purchases Credit card purchases by division: 0.6Food and beverages 5.6Manufacturing products 6.3Services 8.7Other goods and services

13 Israel statistics Percentage growth in Jan-June 2009 ( compared to the same period the previous year ) Seasonally adjusted data, constant prices 4.4Total credit card purchases Credit card purchases by division: 2.9Food and beverages 6.0Manufacturing products 5.3Services 4.0Other goods and services

14 Israel statistics Credit card Purchases index Jan-June 2009 Seasonally adjusted data, constant prices The highest increase for a sub-sector was 22% in computer and software index, compared to the same period in 2008 The largest decrease for a sub-sector was 3% in flight and tourism index, compared to the same period in 2008 The largest increase for a sector was in Manufacturing products with a 6% increase in the Credit card purchase index, compared with the same period in 2008.

15 Israel statistics Credit Card Purchases vs. Chain stores goods Sales Credit card purchases include services such as: Insurance, flight and tourism, leisure and entertainment, municipally and government services while Chain stores sales relates to goods only Food sales includes restaurants in credit card statistics but not in chain stores statistics Chain stores includes only big stores while Credit card includes all kind of stores.

16 Israel statistics Credit card Purchases VS. Chain stores goods Sales Seasonally Adjusted, Total Sales Value Indices of Chain Stores and Credit Card at Constant price Base: 2002=100.0

17 Israel statistics Credit card Purchases VS. Chain stores goods Sales Seasonally Adjusted, Food Sales Value Indices of Chain Stores and Credit Card at Constant Prices Base: 2002=100.0

18 Israel statistics Credit card Purchases VS. Private consumption Seasonally Adjusted, at Constant Prices Base: 2002=100.0

19 Issues in Credit Card Expenditures (why the numbers may differ) Credit cards are now being used for many secured payments thru the web Payments with installments Increase of credit cards issuances per capita Services and not just goods Including dining All outlets vs. chain stores

20 Issues in Credit Card Expenditures (why the numbers may differ) Therefore we see a higher increase in the credit card index than the chain store index and private consumption index. Latest reports by the cc companies show that while the average amount per transaction has gone down, the increase in number of transactions compensated for this and total consumption increased.