Many Consumers Are Losing Interest in Debit Cards
Certain groups of consumers in the United States are losing interest in using debit cards, according to a new study from Mercator Advisory Group. Debit card use among young adults and high-income earners (people with incomes over $100,000 per year) has dropped to a seven-year low, with young adults at 56% and high-income households at 52%. The national average, by comparison, is 59%.
Why are these consumers losing interest in debit cards? Fraud risk may be playing a factor. The study showed young adults and high-income earners were more likely than other consumers to have noticed fraudulent activities on their debit cards, or to have had their cards lost or stolen.
In many cases, debit card fraud is more costly than credit card fraud because of the way banks handle liability for unauthorized transactions. With credit cards, the consumer simply calls the issuer, has the card reissued, and gets reimbursed for the fraudulent transactions. With debit cards, the money comes out of your bank account, causing you to jump through some hoops to get your funds back.
42% of all consumers reported an interest in mobile-based debit card controls to prevent fraud and monitor account finances. 55% of young adults showed interest in this feature, up from 48% last year. 51% of debit cardholders who choose not to use their cards showed interest in mobile account controls, compared to 43% of cardholders who do use their cards.