Consumers Embrace Debit Amid Ongoing Uncertainty

When the chips are down, consumers love and trust their debit cards.

Among clear COVID-era trends is the embrace of debit for managing and mastering new realities. “Debit cards remain the payment method of choice among U.S. consumers, regardless of whether they are shopping online or in stores, according to recent reports,” notes PYMNTS October Next-Gen Debit Tracker® done in collaboration with PULSE, A Discover Company.

Numbers tell the tale. “One large debit network reported that debit purchases over its network hit $52.9 billion in value in Q2 2020, up from the $47.4 billion spent in Q2 2019,” the Tracker states, “driven both by increased online shopping and the growing adoption of contactless payment methods among touch-wary customers shopping in stores.”

Merchants online and off are maximizing the debit wave with often creative strategies that take into account how the consumer mindset had profoundly shifted since the start of 2020.

The Resilience Factor

With the idea of “resilience” dominating much post-pandemic analysis, the workhorse debit card has proven to be exactly that — resilient — in the face of economic chaos.

“Consumers have clung to debit even as the rest of their shopping behaviors have changed. Many U.S. consumers adopted contactless payment methods for their in-store purchases while others stuck with debit as the main means for their mobile or eCommerce transactions,” according to PYMNTS October Next-Gen Debit Tracker®.

Debit card form factors are changing with the times we’re living through, bringing contactless capabilities to bear on this perennially popular payment option. That’s bringing card-tot-present (CNP) security issues to the surface, and platform solutions to the rescue.

Noting, “Consumers have been expanding their online debit use — a trend that began even before the pandemic,” the Tracker states that “One recent study from debit network PULSE showed that CNP debit transactions grew by 21 percent year-over-year in 2019,” adding that “account-to-account transfers … are now one of the most popular ways customers are making debit transactions,” making up for 40 percent of all debit growth.”

Touchless Debit, Meet Cybercrooks

With the demand for touchless payments showing no signs of easing, the new Tracker notes that “Eighty-seven percent of debit cards are expected to have contactless capabilities by the end of 2022 due to this demand.”

It’s all sunny news for debit brands and users, but there’s a caveat: it’s fraud. With the proliferation of debit comes inevitable attempts to target debit cards.

According to the October Next-Gen Debit Tracker®, “One recent study found that the number of active phishing sites in the U.S. climbed to more than 500,000 by mid-March, up from 149,000 reported in January. Other scams are targeting consumers’ payment information — including their debit card data.”

“Card network Visa and other entities warned eCommerce players about emerging skimming attacks that can swipe consumers’ debit or credit information for fraud or identity theft.”