2010 Debit Issuer Study Indicates Financial Institutions Are Employing New Tactics to Increase Debit Card Use
10 Agosto 2010 - 3:00PM
Business Wire
Additional findings from the 2010 Debit Issuer Study,
commissioned by PULSE, reveal new tactics financial institutions
are using to encourage greater use of debit cards.
According to the fifth-annual study, 72 percent of issuers view
improving the performance of their debit portfolios by increasing
penetration, activation and usage as a top priority this year. One
of the key tactics issuers are using to accomplish this objective
is the deployment of instant issuance technology. With instant
issuance, cardholders receive a debit card at the branch as part of
the process of opening a demand deposit account, rather than
receiving their card in the mail.
In 2009, 35 percent of issuers offered instant issuance in
either some or all of their branches, up from 28 percent in 2008.
Those institutions considering implementation of instant issuance
increased to 36 percent in 2009, from 26 percent a year
earlier.
“Although instant issuance can result in higher issuing costs,
financial institutions offering instant issuance can benefit from
increased profitability, greater customer satisfaction and better
security,” said Cindy Ballard, executive vice president of PULSE,
which released initial findings from the Debit Issuer Study in
June.
In addition to instant issuance, the study found that issuers
are adopting a “back-to-basics” approach in response to the
recession. Many financial institutions are focused on acquiring new
account holders and encouraging current customers to use their
cards for small-ticket transactions, such as coffee and
quick-service restaurants. Issuers also are exploring several
approaches to engage debit cardholders through targeted marketing
campaigns, offering incentives and emphasizing the benefits of
debit over alternative payment methods.
Expanding Debit to Business Customers
To expand their debit portfolios, the study found that many
issuers plan to either introduce a new business debit card program
or offer debit products to current business account holders. In
support of these efforts, some issuers surveyed plan to conduct
direct mail campaigns targeted at small business owners.
“Although 70 percent of financial institutions issue business
debit cards, this segment comprises only six percent of the total
debit card market,” said Tony Hayes, partner at Oliver Wyman, which
conducted the study for PULSE. “Many issuers are recognizing the
untapped potential in the business debit market. Some 30 percent of
survey participants named business debit as one of their top growth
areas this year.”
Enhancing Rewards Programs
The Debit Issuer Study also found that debit card rewards
programs are an area of focus for financial institutions this year.
The survey showed that 58 percent of financial institutions
currently offer a rewards program, up from 53 percent in 2008.
Although the number of issuers offering rewards increased, only 17
percent are considering launching a rewards program this year,
compared to 24 percent that contemplated initiating a program in
2008.
Even with interest in rewards seemingly waning, 36 percent of
issuers identified rewards programs as a growth opportunity in
2010. Some issuers surveyed believe that rewards programs increase
overall debit volume, create a competitive differentiation and
strengthen relationships with cardholders.
“Uncertainty about the economics of the debit card business
post-Regulation E revisions and the Durbin Amendment has increased
concerns about the cost and self-sustainability of rewards
programs,” said Hayes, “but many issuers are placing more emphasis
on checking-account-based and relationship programs that could
potentially bring more benefit for issuers beyond just spend
associated with debit cards.”
About the Study
The 2010 Debit Issuer Study is the fifth installment in the
study series. The series provides an objective fact base on debit
card issuer performance and financial institutions’ outlook for the
debit card business. Sixty-four financial institutions – including
large banks, credit unions and community banks – participated in
the 2010 study, which was conducted by Oliver Wyman. Collectively,
the participants issue 78.7 million debit cards and operate 42,063
ATMs. The sample is representative of the U.S. debit market in
terms of institution type, location and debit network
participation.
About PULSE
PULSE, a Discover Financial Services (NYSE: DFS) company, is a
leading ATM/debit network, serving more than 4,400 banks, credit
unions and savings institutions across the United States. The
network links cardholders with ATMs and POS terminals at retail
locations nationwide. Through its global ATM network, PULSE
provides worldwide cash access for Diners Club and Discover
cardholders through hundreds of thousands of ATM locations. The
company is also a source of electronic payments research and is
committed to providing its participants with education on emerging
products, services and trends in the payments industry. For more
information, visit www.pulsenetwork.com.
Grafico Azioni Discover Financial Servi... (NYSE:DFS)
Storico
Da Giu 2024 a Lug 2024
Grafico Azioni Discover Financial Servi... (NYSE:DFS)
Storico
Da Lug 2023 a Lug 2024