Although the economics of debit may once again shift, debit cards continue to be the preferred payment type for everyday purchases, with credit being a close second according to the TSYS 2013 Consumer Payment Choice Study. Nearly half of respondents preferred debit as their overall payment type; 35% preferred credit.
Here are some of the study’s key findings:
Payment preferences vary by type of merchant and location, with credit being the preferred payment type (41%) for online purchases
Consumers are actively using their mobile devices for overall financial activity, in particular for alerts and balance information. Mobile payment usage, while still in the early adoption phase, is rapidly evolving
Rewards and discounts remain the primary means of influencing consumer behavior. This is especially important to consider as the economics of debit appear to be under pressure again. Encouraging consumers to switch to credit has limitations because a large group of consumers definitely prefers debit’s “pay-now” and other features. Merchants themselves can still tailor rewards and discounts to their customers in powerful ways with their own proprietary payment instruments (e.g. Starbucks or Target)
While the appeal of mobile payments and mobile wallets is illusory to many consumers, the ability to use their smartphones to monitor transaction activity, prevent fraud, and manage their finances is very valuable
Consumers continue to be focused on the security, ease of use, control and speed at check-out associated with their method of payment, and incorporating these features into new or expanded offerings will likely result in greater consumer adoption.
The 2013 Consumer Payment Choice Study consisted of an online survey and in-person focus groups — both of which were conducted to gauge current and potential future consumer payment preferences.
The nationwide primary consumer research study uses both quantitative and qualitative data to highlight how consumers are making payments today and how that may change in the future. The results are meant to provide helpful information for use in developing and confirming payment strategies and initiatives.
More than 1,000 consumers who have and use both a debit card and a credit card were surveyed on payment choice, what they value most, what might influence them to change how they pay, and their opinions on select new payment offerings.
“TSYS remains committed to providing our clients and other payments industry participants with insights into current and evolving payment trends,” Sarah Hartman, senior director, TSYS, said in a press release. “Our research once again confirms the enduring strength of traditional debit and credit products, while also revealing that consumers are increasingly aware of and interested in emerging payment options.”