Debit card usage did not decline as a result of last year’s data breaches. Consumers and businesses actually used their debit cards more in 2013 than they did the year before, according to a new study.
Even with security issues fresh in consumers’ minds, the Debit Issuer Study by Pulse found that consumers actually increased their usage with the number of transactions per card increasing from 19.4 per month in 2012 to 20.1 in 2013.
Debit Cards are in style
In response to the Target breach and others, many issuers have put increased security in place and are now preparing to start using EMV debit technology.
According to the report, 84% of institutions reissued cards that were exposed to possible fraud, which is a steep increase when compared to previous incidents when just 29% reissued cards.
Target breach creates a tipping point
Every financial institution in the study reported that the Target breach affected their business. With fraud loss rates increasing, and causing them to take a harder look at their security protocols. In 2013, 14% of debit cards were put at risk in data breaches, which is up 7% from 2012, when just 5% were exposed.
Before last year’s security failures, many financial institutions were not on board with changing from pin-based debit technology to chip technology because of issues around regulation and the willingness of merchants to adopt the new technology.
However, after the Target breach came to light they pulled the trigger on using EMV technology, with many preparing to start issuing cards as early as 2015.
In addition to security measures, issuers are also looking at ways to make their cards more attractive to consumers, by offering reward programs. Currently 48% offer cardholders access to debit reward programs.
The 2014 Debit Issuer Study was first conducted in 2007 by Pulse, a division of Discover. It looks at data from 71 financial institutions, including credit unions, large banks and community banks.
