The debit card has rung up enormous gains over the last decade in capturing a bigger share of consumers' wallets, according to a new study by debit and ATM network PULSE.
In particular, cardholders are using their debit cards more frequently and for more kinds of purchases. The typical debit card is now used 21.2 times per month at the point of sale – a 32% increase since 2005, according to the study – and the annual spend per active debit card is up 19% to $9,291 per year.
Average ticket size is down $3 to $37 compared to $40 in 2005, but Tony Hayes, a partner at management consulting firm Oliver Wyman, who co-led the study, said that shows consumers are actually embracing debit cards even more.
"Debit has steadily gained wallet share as consumers shift their spending to this payment type," he said. "The use of debit for small ticket purchases is particularly noteworthy, where one-third of all debit transactions are for less than $10 – purchases that historically would have been made with cash or not at all."
PULSE EVP of Marketing and Communications Steve Sievert added, "The past decade saw a major shift in consumer preference to paying with debit cards, which accelerated after the 2008-2009 recession. We believe there is still opportunity for debit growth, considering that consumer use of debit for smaller purchases is rising, and the average active debit card is used about five times per week."
The growth is generating more noninterest income for issuers as well, even with the introduction of Regulation II in the fourth quarter of 2011, the study said.
In 2014, regulated financial institutions earned a weighted average of $0.24 per debit transaction, and exempt financial institutions earned $0.40, according to the study. In 2008, the first year the study began reporting on debit revenue, debit issuers earned an average of $81 in annual interchange income per active consumer debit card; that's now $112 for exempt issuers but $59 for regulated issuers, according to the study.
Debit card use did take a notable dip at ATMs. Back in 2005, consumers used their debit cards for ATM withdrawals an average of 3.4 times a month, but by 2014, that had fallen by 41% to just two times per month, the study said.
The study is the 10th in a series and was conducted by management consulting firm Oliver Wyman, which is based in New York. It surveyed 70 financial institutions, including credit unions, community banks and large banks. The respondents issue approximately 147 million debit cards, representing about 47% of all U.S. debit transactions, it said.
The U.S. banking industry issues 165 million new debit cards per year, largely driven by mass reissuance for data breaches and cards for new customers, the study noted. Approximately one in five U.S. accountholders switches financial institutions each year, it added.
© 2025 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.
