The news: US retail sales (excluding auto and gas) jumped 10.9% year over year (YoY) in July and increased 10.4% compared with July 2019, according to recent Mastercard SpendingPulse data.
Standout categories included jewelry (+82.6% YoY), apparel (+80% YoY), and restaurants (+61.4% YoY)—indicators that consumers spent more time and money outside their homes as COVID-19 restrictions eased and the vaccination campaign progressed.
Opportunities abound: Here are some moves that could benefit Mastercard and help it take advantage of the recent spending surge.
The challenge ahead: As consumer spending takes off, card networks may also face greater regulatory scrutiny regarding fees networks charge merchants for card transactions. In March, Visa and Mastercard delayed fee increases following comments from legislators, including Senate majority whip Dick Durbin.
And more recently, Mastercard CEO Michael Miebach pushed back against debit regulations that limit the fees networks can charge merchants on debit card transactions, including the decade-old 2010 Durbin Amendment. Miebach said data shows consumers have paid more and gotten less because of those laws—which could set the stage for ongoing industry concern about any proposed new regulations.