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12/10/2009 -
Canadian businesses may soon see more credit card processing activity as consumers and businesses have begun to dig themselves out of debt, the Office of the Superintendent of Bankruptcy Canada reported.Business insolvencies in August were at the lowest level since January of 1987, declining by 11.4 percent since July and 18.8 percent since August of last year.
Consumer insolvencies also eased, posting an 8.1 percent decline from July's number. The August figure remains above historical averages, however, and is 36.9 percent higher than the number of insolvencies in August 2008.
Although some economists believe this trend will not be long-lasting, noting that August tends to be a low-filing month in general, some cite the improved unemployment numbers as evidence that the trend may stick.
"This fits into our view that the recession likely ended in the summer and given the job gains, I would think consumer bankruptcies will continue to flatten out and decline in coming months," Sal Guatieri, a senior economist with BMO Nesbitt Burns, told the Globe and Mail.
As consumers and businesses improve their finances and become more confident about their debt levels, their credit card spending will likely rebound, making credit card processing capabilities even more crucial for Canadian merchants.
