GREENWOOD VILLAGE, Colo. -- 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 [image-nocss] in this study, along with other independent research, consumers have made it clear they prefer businessesfrom their doctor's office to the movie theaterto offer a variety of electronic payment options, said Ron Congemi, senior vice president of strategic industry relations for Greenwood Village, Colo.-based 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% 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% to 33%. Security was the leading response for choosing PIN debit as reported by 48% of respondents. Additionally, 57% of PIN-secured debit users reported that having the choice to receive cash back at the POS resulted in more usage of their cards.
Other key findings:
62% of ATM/debit cardholders reported using their ATM/debit cards at the POS in the 30 days prior to the survey. Over the past five years, consumers' average POS debit activity has grown from less than eight transactions a month to more than 11. Among all card users, 45% of consumers report using both PIN and signature methods, an increase from last year's 39%. The number of respondents using both is significantly greater than those who report using a single method. Using both methods has a major effect on transaction volume: Those who use both PIN and signature debit account for 75% of all debit POS transactions made. Consumers utilizing both methods conduct an average of 23 transactions a month versus 14 for those who solely use signature and 10 for those using only PIN. The expanding number of locations accepting debit, particularly for small-ticket purchases, underscores the value of promoting both PIN and signature debit to consumers. Among respondents, PIN debit is the preferred debit option at discount stores, convenience stores, drug stores and do-it-yourself stores, while signature debit leads in food categories and specialty retail locations. The average cardholder surveyed conducts 58% more transactions per month when given the option to use both signature and debit. Additionally, 57% of PIN-secured debit users reported that having the choice to receive cash back at the POS results in more usage of their cards. Convenience and security are top reasons cited by respondents for using ATM/debit cards rather than another payment method. Other reasons consumers gave for preferring ATM/debit over other options were, I do not like to carry cash, easier/simpler and faster/quicker. Although PIN and signature debit have demonstrated transaction growth, preference of PIN debit over signature debit was 45% to 33%. Security was the leading response for choosing PIN debit as reported by 48% of respondents. Although grocery stores and gas stations continue to be popular venues for debit POS users surveyed, other merchant categories are generating interest and activity as more retailers and professionals, such as doctor's offices and high-end retailers, offer debit as a payment option. Consumers age 25-34 report the highest usage of PIN and signature debit at close to 16 total transactions per month overall. Yet, all ages demonstrate an affinity for debit, with the typical consumer conducting numerous transactions on a monthly basis. All age groups report higher average POS usage in 2005 versus 2004, with statistically significant increases in the 25-34 and 45-54 age groups. All groups report using PIN more than signature debit, with PIN-secured debit used in approximately 3 out of every 5 debit POS transactions overall. Debit POS usage is embraced by all income levels and is highest among those with household incomes of $40,000 and above. Those in the $80,000 to $100,000 income level report transacting with debit at POS most often, at 14 times per 30 days. In this group, debit volume nearly equals cash activity.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.