by Hans Eisenbeis
- In May 2009, Visa announced that debit transactions had surpassed credit billings for the first time in company history. One year later, Mastercard announced that their cardholders had also debited more than they’d charged for the first time (ABCNews.com 5.6.10).
- In the first quarter of 2010, MasterCard users spent $118 billion with their debit cards, more than was charged on credit accounts.
- Analysts believe that many younger consumers are embracing debit cards in increasing numbers because they enjoy their convenience, they’re managing their money better, and they don’t have access to as much credit as older generations.
WHAT THIS MEANS TO BUSINESS
- Despite the ups and downs of a sluggish recovery, long-term changes in spending behavior are here to stay. The nationwide shift to debit cards and away from credit will continue long into the future.
- Consumers are eager to see more companies honor this shift by, for example, offering rewards programs connected to debit, providing greater security, or allowing more customization and flexibility in debit products.