First Data Study Re-Confirms Debit as the Fastest Growing Payment Method

Having the option to make payments via PIN or signature debit increases the number of transactions consumers make monthly, according to a recent survey released by First Data Corp.. The STAR® Consumer Payments Usage Study, conducted by an independent research firm, found that consumers who use both PIN and signature debit at the point-of-sale (POS) conduct an average of nearly 23 transactions per month versus 14 for those who solely use signature and 10 for those using only PIN. “By the responses provided in this study, along with other independent research, consumers have made it clear they prefer businesses — from their doctor’s office to the movie theater — to offer a variety of electronic payment options,” said Ron Congemi, senior vice president, Strategic Industry Relations, First Data. “It’s important for retailers to promote consumer choice and for financial institutions to provide consumers with the features and products to meet their preferences. Doing so will help attract new customers, increase revenue and enhance customer retention.”

The 2005/2006 survey data also points to the continued growth of debit activity at the POS. Over the past five years, consumers’ average POS debit activity has grown from less than eight transactions a month to more than 11. The average total number of debit POS transactions made monthly has increased 21 percent in the last year, from 15 to 18 transactions per month.

Although PIN and signature debit both demonstrated transaction growth, preference of PIN debit over signature debit was 45 percent to 33 percent. Security was the leading response for choosing PIN debit as reported by 48 percent of respondents. Additionally, 57 percent of PIN-secured debit users reported that having the choice to receive cash back at the POS resulted in more usage of their cards.

“Based on the results of this study, STAR is addressing consumers’ payment preferences by working with merchants and financial institutions to enable and promote debit payments effectively to their customers,” added Congemi. “Our collective understanding of consumer payments needs and preferences allows us to offer our customers the tools and support they need to be successful.”