Technology may be changing the way people make payments, but debit remains a fundamental tool for both consumers and businesses in their day-to-day transactions. As fintech innovations such as digital wallets and person-to-person payments emerge, debit is poised to meet the challenge. And by embracing fintech instead of fighting it, your financial institution can leverage tech innovations to better engage debit cardholders.
Here are four reasons why debit is relevant to your institution amid the fintech evolution:
Consumers are using debit more often. Debit card payments have been on a steady climb since 2010 and usage rates are still rising. On average, consumers used their cards 17 times a month that year. In 2016, card use reached a record high of 23.6 transactions each month. The average consumer pays with a debit card 39 percent more often than consumers paid with debit in 2010, based on findings in the 2017 Debit Issuer Study, sponsored by PULSE.
Debit payments are faster, cheaper and a more secure way to transfer money than ACH. Debit allows businesses to send money to their customers instantly and more securely by using their debit cards. Whereas checks and ACH transfers can take days to get customers their money and carry high payment costs, Account Credit Transfers and P2P payments are completed within minutes and offer a low-cost option to moving funds. Customers also feel a greater sense of security providing their debit card numbers than they do offering up their account information. PULSE has a solution to help, PULSE Account Credit Transfers.
Debit enrollment in mobile wallets is up. As mobile wallets take hold and grow their market share, debit stands to the card of choice for many consumers. According to the 2017 Debit Issuer Study commissioned by PULSE, the rate of issuers supporting debit cards that can be loaded onto mobile wallets has more than doubled in two years. In 2015, it was nearly one in three issuers; in 2017, it was three out of four. Consumers are enrolling in larger numbers, too, and most are loading their cards onto Apple.
Debit penetrates the lion's share of the market. Three out of four account holders — consumer and business accounts combined — have a debit card. Their annual spending is increasing, too. In that same study, the 2017 Debit Issuer Study, consumers made an additional $548 in debit purchases in 2016, while businesses spent $380 more.
Fintech has the potential to strengthen the role of debit payments. Issuers just need to make sure they're part of the conversation in order to guarantee that happens. To learn more about account credit transfers, P2P payments or debit trends talk to your PULSE account representative or call us at 1-877-247-8573.