The key to debit card growth is changing member behavior and shifting volume from cash and check to debit.
Connie Davis, FIS product manager, EFT services
It’s about getting cash and check users to understand the benefits of debit, and to shift transactions in a way that benefits both credit unions and their members, says Connie Davis, FIS product manager, EFT services.
One-third of consumers are heavy users of debit (using their cards more than 10 times per month), one-third are light users (using their cards one to nine times), and one-third don’t use their cards at all, according to Davis.
Debit card users appreciate these benefits of debit cards, according to FIS research:
62% say debit cards help them spend within their means;
56% like the control debit cards offer over when funds are extracted from their accounts; and
24% like the loyalty points often associated with debit cards.
Davis recommends using reward programs and overdraft protection to motivate cash and check users to move to debit. But John Focht, FIS senior vice president, EFT services, says demographic data might make that more difficult than it sounds.
The average age of a check writer is between 55 and 60 with average annual income of $50,000 to $60,000. It might be more difficult to convince check writers to move to debit than members who use primarily cash.
John Focht, FIS senior vice president, EFT services
Cash users have a similar average income, but their average age of 45 to 50 is lower than the check writers.
“It’s possible that you’ve already converted all the check writers you’ll be able to convert,” says Focht. “At this point, you might want to concentrate all your efforts on getting cash users to use more debit.”
Most cash users are already using some debit, Davis notes, the challenge is to get them using more debit, she says.
To download the FIS research report, “The Case for Promoting Debit Cards: Why They are Still a Growth Product,” visit fisglobal.com/insightspapers.
CUNA’s Final Rule Analysis of the Consumer Financial Protection Bureau’s short-term, small-dollar loan rule is now available, to help credit unions figure out how it will affect small-dollar lending at their institution.