Magazine article American Banker

MasterCard, Pulse Report Wider Use of Debit Cards

Magazine article American Banker

MasterCard, Pulse Report Wider Use of Debit Cards

Article excerpt

MasterCard International and Pulse EFT Association surveys agree that consumers are using debit cards more often and for a wider array of purchases.

In MasterCard's survey, 85% of responding debit card holders reported using their cards for monthly purchases, up from 74% in 2001. There was only a modest increase in the number of consumers who own a debit card: 66% of checking account customers, up from 61% three years ago.

But usage was up, and debit made particular inroads in "micropayments" -- purchases under $20. MasterCard said debit accounted for about one-third of all micropayments, a 61% increase over 2001. Meanwhile, cash micropayments dropped by 11 percentage points, to 64%.

MasterCard's survey was conducted in December; Pulse's, administered by Analytica Inc. of Houston, in January and February. Reports on both were issued last week.

Pulse said debit transactions, mostly those authorized by personal identification numbers, were the most popular form of payment across three merchant categories: grocery, gas, and major box retailers.

Over all, 28% of those surveyed said they prefer cash or check, 54.3% debit cards, and 17.8% credit cards.

Stan Paur, Pulse's president and chief executive officer, said check users were the least happy with their payment method.

MasterCard, of Purchase, N.Y., and Pulse, of Houston, came to different conclusions about the relative popularity of PIN and signature transactions.

MasterCard, which processes nearly all signature transactions for its U. …

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