2018 Debit Issuer Study Finds Improved Issuer Performance, Lower Fraud Losses
13 Settembre 2018 - 3:00PM
Business Wire
The 2018 Debit Issuer Study found that consumer debit use
continued to grow in 2017, contributing to improved overall debit
performance, while fraud losses per transaction declined for the
second consecutive year. On the mobile payments front, the 13th
annual survey – commissioned by PULSE®, one of the nation’s leading
debit/ATM networks, and conducted by Oliver Wyman – found that
cardholder enrollment in mobile wallets doubled year-over-year
while transactions per enrolled card remained flat.
Issuers also reported that the historical dichotomy of PIN and
signature debit is largely obsolete. PIN transactions used to be
the sole domain of electronic funds transfer (EFT) networks, while
signature transactions were the card brand networks’ arena. Now,
issuers increasingly track how the card is used by the cardholder
(in-store or online, for example) rather than the network through
which the transaction is routed. This change was driven in part by
growth in transactions requiring no authentication and
card-not-present purchases, both of which are now offered by larger
EFT debit networks such as PULSE.
“The debit landscape continues to change dramatically,” said
Steve Sievert, Executive Vice President of Marketing and Brand
Communications for PULSE. “We’ve moved from the simple world of
‘PIN or signature’ to an array of options, including PINless and
signature-less transactions at the point of sale and biometric
authentication in digital commerce and mobile wallets. Meanwhile,
advances in payments and a stronger overall economy are resulting
in improvements in debit’s key performance indicators.”
Debit Performance Strengthens
Among the strong debit fundamentals highlighted by the issuers
in the study:
- Higher Penetration Rate:
Seventy-six percent of checking accounts had associated debit cards
in 2017, compared to 75 percent in 2016.
- Increased Card Activation: The
percentage of debit cards used at least monthly grew to 66 percent
from 65 percent.
- Greater Use: Among active
consumer debit cardholders, debit cards are used to make 23.7
purchases per month, up from 22.9 last year, and an all-time high
in the history of the study.
Fraud Losses Decline for Second Year
Based on fraud losses incurred by the study participants and
extrapolated to the entire U.S. debit industry, issuers lost an
estimated $850 million on point-of-sale debit transactions in 2017,
a 5.5 percent decrease from 2016. This decline is likely due to the
transition to chip-enabled debit cards, which is now largely
complete for issuers. Surveyed issuers have converted 91 percent of
their debit cards to chip cards.
Card-not-present transactions may be more vulnerable to fraud
due to the lack of chip card authentication or, in the vast
majority of cases, PIN protection. Even though card-not-present
transactions account for 21 percent of transaction volume, they
represent 44 percent of net fraud cases. The average net fraud loss
associated with these transactions was $123 per incident.
“As the industry has moved to chip transactions, fraud has
migrated to transactions that don’t require a physical card,” said
Jim Lerdal, Vice President of Fraud and Risk Management for PULSE.
“Survey respondents reported that the costs of this fraud are high,
amounting to 10.5 cents for every card-not-present transaction, of
which issuers bear 1.7 cents, on average. The remaining 8.8 cents
constitute losses borne by merchants and cardholder claims that are
not charged back.”
On average, issuers in the survey authorized nearly 95 percent
of all attempted debit transactions in 2017. The biggest reason for
declined transactions among this group is not suspected fraud,
which impacted 0.4 percent of their debit transactions, but
insufficient funds, which affected 1.8 percent of transactions.
Mobile, Digital on the Move
The survey revealed that 86 percent of responding issuers
support at least one mobile payment option, up from 74 percent in
the previous study. Mobile payments are defined in the study as the
ability to use a smartphone to pay at a physical point of sale.
Cardholder enrollment in mobile programs doubled in the last year.
However, transactions initiated with a mobile wallet represented
only 0.6 percent of in-store debit card purchases in 2017, compared
to 0.3 percent in 2016.
Enhancing digital capabilities topped the list of 2018
priorities for survey respondents. They want to give cardholders
tools for greater control and flexibility in managing their debit
card activity. Issuers also want to communicate with cardholders
for real-time verification and fraud management, and even to
automatically provision a digital card in a mobile wallet while
awaiting the issuance of a plastic card, for example.
“We see a real opportunity for financial institutions to enhance
their debit card offerings with new digital capabilities,” said
Tony Hayes, a partner at Oliver Wyman who co-led the study. “There
is a clear link between greater cardholder engagement and overall
customer loyalty and retention.”
About the Study
The 2018 Debit Issuer Study is the 13th installment in the study
series, commissioned by PULSE and conducted by Oliver Wyman, an
independent management consulting firm. The study provides an
objective fact base on debit card issuer performance and financial
institutions’ outlook for the debit card business. Fifty-nine
financial institutions – including large banks, credit unions and
community banks – participated in the study. Collectively, the
participants issue approximately 148 million debit cards and
represent 42 percent of the U.S. debit market. The sample is
representative of the U.S. debit market in terms of institution
type, geography and debit network participation.
About PULSE
PULSE, a Discover Financial Services (NYSE: DFS) company, is one
of the nation’s leading debit/ATM networks. Financial institutions,
merchants, processors and ATM deployers across the United States
and around the world depend on PULSE’s comprehensive suite of
products and services and its commitment to providing exceptional
client service, flexibility, security and superior economics. PULSE
also is a resource for debit education, research and knowledge
drawn from more than three decades of industry experience. For more
information, visit pulsenetwork.com.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180913005028/en/
PULSEAnne Uwabor, 832-214-0234anneuwabor@pulsenetwork.comorDPK
Public RelationsDan Keeney, 832-467-2904dan@dpkpr.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