The world of banking and finance continue to bounce back as the US recession comes into a halt. A recent study conducted by an ATM/Debit networks says that a large chunk of the Debit Card growth can be attributed to the mounting usage of debit cards even in small-ticket transactions.
ATM/Debit network PULSE released the 2010 Debit Card Issuer Study and asserts that consumers most likely resorted to cashless transactions for both big deal and ordinary expenses. PULSE Executive Vice-President Cindy Ballard said in an e-mail that one of the highlights of this year's Debit Issuer Study is the crucial role debit is playing in aiding the consumers to manage their finances. "As consumers lessened spending in the time of the recession, people used debit even more, usually for small-ticket buys under $20, as they showed a preference in using debit before cash," Ballard added in her statement.
The recession in the last two years had also brought the Americans to prefer debit cards to other forms of payment for their everyday expenses. Apart from the convenience of paying cashless, the study also pointed out that having a handy debit card is a safer option than bringing in bills. There is also a current trend in pay-as-you-go approach where consumers who do not have cash but are scaling down with their budget can smoothly pay for their purchases. In addition, the study pointed out that there is a growing number of merchants accepting small debit transactions. Ballard further stated that they are receiving a number of positive responses over the use of debit transactions upon payment. She said that the recession could have made the consumers wiser in handling their finances.
Reward programs related to debit transactions have also started to thrive which give consumers added benefits. Apart from this, finance experts are also reminding the consumers that using debit instead of credit card will help them rack up debt. Additional charges from using credit cards have grown exponentially leaving the consumers pay unnecessary interest fees.
The study also surveyed banks and card issuers and found out that debit transactions grew just about ten percent across the board. This result can be further highlighted by the difference in growth rate between 2008 and 2009 where debit transactions were powered up by small-ticket transactions. In addition, the survey underlined there is a budding preference of PIN-based transactions to signature debit purchases by the consumers.
However, although much of this is good news to both the consumers and the finance industry, reports on debit fraud have continued to increase. Still, finance experts remain positive about the rise of debit card industry from the economic fallback they have experienced over the last two years. In line with this, Tony Haynes, a comrade in management firm of Oliver Wyman, recommended that the current 'debit momentum' is likely to give birth to more reward programs for the consumers.