HOUSTON – The overall trend away from cash and checks and toward cards as ways to pay for things continues to gain momentum as a recent survey found that Americans increasingly turning to debit cards as their preferred payment method across retail channels. The survey, conducted on behalf of the PULSE EFT Association, found that Americans now strongly favor debit cards as a means of payment and that credit cards, checks and cash are left to fight for biggest slice of the remaining payment pie. The survey found that 54.3% of Americans surveyed prefer to use their debit cards for most purchases, with 17.8% preferring to use credit cards, 15.4% preferring to pay with cash and 12.6% preferring to use checks. Among the survey's key findings was that the majority of consumers choose one payment method and stick with it across the grocery, gas and large retailer markets rather than vary their payment type. This made it possible to segment the payment type according to consumer preference, PULSE said. Previous research had suggested that consumers vary their payment preferences widely depending on where they shopped. The six preference groups came to be identified as people who choose their debit cards and prefer to enter a personal identification number (23.5%); people who prefer debit cards and prefer to sign their receipts (17.0%); people who prefer debit cards and don't care whether they use a PIN or signature in the transaction (13.8%). Consumers who prefer to use their credit cards (17.8%), checks (12.3%) and cash (15.4%) made up the balance of the six categories. The survey found interesting sub-categories to the six as well. For example, while people who prefer to sign a debit receipt were 17% of the survey's respondents, their percentage doubled if they didn't have a credit card. "Thus it is pretty clear there are consumers who may not qualify for a credit card and a debit card is the only way they can play with plastic," the report on the survey said. "Discontinuing acceptance of the debit card would completely disenfranchise such a person from being able to pay with plastic," the report added. The survey also found that people who write checks are the least happy with their payment method and maybe the most susceptible to being converted to debit card users. What If Merchants Stopped Taking The Cards? As part of the card associations' settlement of a court battle with retailers, VISA and MasterCard no longer force merchants to take the debit card if they accept the credit card. But almost all merchants have continued take the cards – and would face an extremely angry consuming public if they did not, according to the survey. The report found that 81.4% of consumers said they would be "clearly very unhappy" if a merchant which had taken the card stopped taking it. "I would be angry and frustrated," wrote one consumer who shared their opinion with researchers. "I thought that was the direction we were moving in." "I would be very upset," another wrote. "I would have to leave my items at the store and walk away unhappy and would probably not visit the store again." Of the consumers who said they would switch to another payment method, 39.4% said they would switch to a credit card, a method which actually costs most merchants more money, the report observed. Eighty percent of consumers also said they would be very unhappy if merchants started charging a fee to accept their debit cards. The survey also found that consumers chose debit because they believed, no matter how they validated their transactions, that debit cards are faster and easier. They also wanted to avoid the credit balances and finance charges that credit cards bring, the survey said. Significantly, rewards like cash back, sweepstakes and promotions were found not to drive much consumer choice of one payment method over another. -

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