Survey Finds U.S. Consumers' Interest in Debit Card Controls Strong
The latest Insight Summary Report from Mercator Advisory Group’s CustomerMonitor Survey Series reveals that while overall debit card usage in the United States is holding steady, young adults and high-income earners are shifting away from debit card use.
Usage by both demographic segments declined to a seven-year low in 2015, 52% of households earning $100,000 or more a year and 56% of young adults, which is less than the average (59%). Young adults and high income earners are also more likely than average to have noted potential or actual fraudulent activities on their debit cards or their card was lost or stolen. Titled Consumers and Debit in the U.S.: Heightened Security Concerns, the report, presents the findings of an online survey of 3,008 U.S. adults conducted in June 2015.
The survey finds 42% of all consumers expressing an interest in mobile-based account controls for debit cards to avoid fraud and control their spending (a finding with little change since our 2014 survey). Young adults are especially interested in this mobile feature (55%, up from 48% in 2014), even more showing interest this year. Notably, people who have debit cards but choose not to use them (51%) are more likely than debit card users (43%) to be interested in this feature. This represents an opportunity for debit card issuers to increase card activation and stimulate greater debit card transaction volume by enhancing perceived security of debit cards.
“Consumers are expressing more security concerns about using debit cards at online retailers and are consistently demonstrating stronger interest in enhanced security services. Concerns about security, particularly online, as well as lack of rewards are potential inhibitors to greater debit card use,” states Karen Augustine, author of the report and manager of Primary Data Services at Mercator Advisory Group, which includes the CustomerMonitor Survey Series.
When asked about value-added services for debit cards, 3 in 5 consumers expressed interest in valuable debit card rewards and enhanced security with identification protection, found to be the two most desirable services for debit cards of the eight the survey question listed. Over half of respondents interested in enhanced security would be willing to pay for this service.
Debit card owners who choose not to use debit cards are just as interested in enhanced security and identification protection as in debit card rewards and slightly more likely than average to be interested in both. Debit card users are more likely than average and more likely than debit card owners who do not use the cards to want more valuable rewards and enhanced security, and significantly more interested in enhanced security than in the next most desirable value-added service.
Consumers express security concerns about using debit cards at online retailers and are demonstrating stronger interest in enhanced security services. Concerns about security as well as lack of rewards are potential inhibitors to greater debit card use.
The study also examines the topics highlighted below.
Highlights of this report include:
- Year-over-year trending of payment type used in households, including debit card use in the U.S. and the ways that consumers use debit cards
- Ownership and interest in obtaining EMV-enabled debit cards
- Comparison of debit card ownership to debit card use
- Preferred payments for online purchases and reasons for not using debit cards at online retailers
- A shift in demographics of debit cardholders
- Use of person-to-person payments and online payment services by brand and primary reasons for using online payment services including awareness and use of Bitcoin
- Comparison of use of financial institutions of specific payment services with use of alternative services initiated in supermarkets, discount stores, and other outlets
- Types of fees paid for use of checking account
- Cash spending and reasons for cash use
- Debit card rewards, type of rewards and motivation to use card more often
- Interest in mobile-based account controls for debit cards
- Interest, use and willingness to pay for 8 value-added debit card services
The report is 73 pages long and contains 35 exhibits
Companies mentioned in the report include: Amazon, American Express, BillMeLater, Discover, Dwolla, Google, Facebook, MasterCard, MoneyGram, PayPal, PopMoney, Square, Venmo, Visa, Walmart, and Western Union.
Members of Mercator Advisory Group CustomerMonitor Survey Series Service have access to this report as well as the upcoming research for the year ahead, presentations, analyst access, and other membership benefits.
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Mercator Advisory Group is the leading, independent research and advisory services firm exclusively focused on the payments and banking industries. We deliver pragmatic and timely research and advice designed to help our clients uncover the most lucrative opportunities to maximize revenue growth and contain costs. Our clients range from the world's largest payment issuers, acquirers, processors, merchants and associations to leading technology providers and investors. Mercator Advisory Group is also the publisher of the online payments and banking news and information portal PaymentsJournal.com.