The furor over debit card fees left many consumers with the impression that regulation of debit card interchange flowing from the Durbin amendment actually helped, not hurt, bank debit card issuers, according to a recent study.
The study, “Evolution in Consumer Payments Behavior,” published by Javelin Strategy and Research found that 70% of consumers survey reported they thought the interchange regulation would benefit banks while only 30% thought the new rules would benefit merchants.
The firm cited the way large banks had handled the issue, adding fees to debit cards, for the perception along with their inability to frame the issue for consumers.
“In the events surrounding the implementation of the Durbin Amendment, banks lost any potential PR advantage by implementing actions that seemed punitive to consumers, failed to educate, and failed to provide detailed information needed for accurate understanding and decision-making, the firm said.
It also documented other consumer attitudes of interest to credit unions and debit card issuers, including that far more debit users will simply start using cash more or change banks, rather than use more credit cards, if debit card fees rose too much.
It also found that cash was steadily becoming the medium of exchange for lower-income consumers and those without banking relationships.
Roughly 72% of consumers without banking relationships surveyed said they most frequently use cash for any sort of purchase while 66% of consumers with a banking relationship have at least a debit card (67% have a credit card.)
Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.
Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
- Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
Already have an account? Sign In Now
© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
