The Changing Face of Debit Cards Amid COVID-19
PaymentsSource, February 2021
PaymentsSource Senior Analyst Michael Moeser’s recent post noted COVID-19’s powerful impact is changing how consumers shop and pay for purchases. According to the PaymentsSource report, Why Consumers are Now Driving the Future of Money, debit cards have benefitted. It found that in September 2020, about 44% of consumers were using a debit card as their primary payment method for in-store transactions compared to 35% before the pandemic. The biggest growth in debit card payment preference was among millennials and Gen Z.
PULSE Perspective: Considering that the 2020 Debit Issuer Study, commissioned by PULSE, found that debit interchange represents roughly one quarter of net income for credit unions and community banks, these shifts in debit usage can provide a meaningful positive impact to your bottom line.
Digital Payments Here to Stay
Mobile Payments Today, January 2021
Over a quarter of respondents to Deloitte Digital's survey, captured in its HX in Uncertainty report, said they plan to use digital payment tools more often in the post-pandemic era. According to Mobile Payments Today, over 80% of consumers who depended on cash and checks as their primary forms of payment prior to the pandemic plan to use digital payment tools post-COVID-19. Meanwhile, PaymentsSource reports that Visa’s Back to Business Study 2021 Outlook, found 85% of respondents expect merchants to offer digital options when paying in stores. Some 62% expect to be able to make contactless card payments, while 41% expect to be able to pay via mobile app.
PULSE Perspective: Incumbents and internet banks need to meet consumers where they are, and provide a full range of account management features in-app.
Payment Trends to Watch in 2021
Mobile Payments Today, December 2020
Mobile Payments Today cited three trends to watch this year: cashless becoming more common; fintechs tackling the underbanked; and blockchain making it big. While cashless is predicted to become standard in many businesses and regions, concerns about the underbanked persist. That’s why fintechs focused on them can shine by offering no-fee accounts, microloans and tools for customers on government assistance. Blockchain will make an impact in cross-border payments.
PULSE Perspective: As digital laggards catch up and new payment habits stick, the pandemic is bound to have more radical and transformative long-term impacts on payments than some first imagined. Stakeholders who delayed tech investments thinking the changes were temporary could be left behind.