MAYNARD, Mass. (5/1/15)--When asked "debit or credit," young consumers would be more inclined to say "debit" if a rewards program was attached to the action, according to recent research from Mercator Advisory Group.
Among consumers age 18 to 34, just over half responded they would be motivated or very motivated to use their debit cards because of a rewards program, said Sarah Grotta, director of Mercator's debit advisory service (Digital Transactions News April 10).
Millennials favor cash as a reward instead of points or miles, the report found. Financial institutions also are implementing mobile apps, mobile coupons and location-based rewards.
Smaller financial institutions, such as credit unions, have increased their debit-rewards offerings, the payments research firm reported. "Smaller institutions want to be competitive, and the industry is now seeing that the instance of debit rewards among smaller financial institutions is about on par with larger organizations," Grotta told Digital Transactions.
Mercator's report, "Top 50 U.S. Retail Banks and Credit Unions' Debit Rewards and Loyalty Programs: 2014 Annual Review," also noted that interest is growing in merchant-funded programs, which help keep card costs down.