Although debit cards are still the most popular form of payment in the U.S., that popularity is sharply dropping, according to a new report from TSYS, which attributed the drop to card security fears.
“Forty-three percent of respondents preferred debit as their overall payment type and 35 percent indicated their preferred payment type was credit. These percentages represent a decrease in respondents who preferred debit from our 2013 study, where 49 percent indicated they preferred debit. Credit-preferred respondents were unchanged at 35 percent,” the report said. “Credit card preference is likely attributable to the fraud and risk concerns of consumers. Eighty-nine percent of respondents felt that it was safe to use their credit card, while that number dropped to 83 percent for debit cards.”
That continued preference for debit—although shrinking—exists overall. But when only looking at online purchases, that advantage doesn’t exist, with 48 percent of respondents preferring credit cards when shopping online.
“This represents an increase of 7 percent over our 2013 study responses. Twelve percent of consumers in our study said they prefer PayPal as their online payment method, a decrease of 10 percent from our 2013 study. Debit, while showing decreases in other payment areas, actually increased as the preferred method of payment online, with 30 percent of respondents indicating they preferred using debit when making online purchases,” the report said.
The report also explored how shoppers feel about using payments while in mobile environments. “Fraud prevention and risk reduction tools are the most important features to consumers when they consider incorporating mobile into their payments process. When asked about the use of smartphones in conducting different types of payment transactions, we saw that consumers were very interested in taking part in protecting their accounts by using mobile tools to monitor and track payments. We did not see quite as much interest from the respondents in actually using their smartphones to make payments,” the report found. “We asked our respondents whether, if they were able to use a smartphone to make a payment, they would prefer to scan, tap or push a button on their screen. For now, the most-preferred method of paying appears to be through scanning (bar code, QR code, etc.) with a smartphone or other mobile device, with 21 percent of respondents indicating this as their preference.”
TSYS said that it surveyed more than 1,000 consumers who owned a debit card and a credit card. Primary credit card relationships were mainly with banks (76 percent) followed by credit unions (14 percent). Consumers also had primary credit card relationships with retailers (3 percent) and airlines (2 percent).