Debit and credit card transactions continue to lead the way in payments transactions over digital payments alternatives, according to recent research published by J.D. Power. Across all age groups of U.S. consumers in the last three months, 32% turned to their debit card most frequently to pay and 28% used their debit card. Trailing behind cards were ATM withdrawals (12%), cash (11%), check (6%), a mobile wallet (2%). Other alternatives, such as P2P payment apps, prepaid or gift cards, “buy now pay later” or cryptocurrencies were each used by only 1% of consumers in that same three-month period, according to the survey.
When asked about their reasons for using credit cards, earning rewards topped the ability to pay over time for both young and older customers: 61% of consumers over age 45 and 36% of consumers age 18 to 44 said it was their primary reason for using their card. Older consumers were more likely than younger consumers to pay off their credit card statement in full each month and earn rewards and benefits, but slightly less likely to report using more than one credit card. Both younger and older consumers said they used their credit card for multiple transactions per week.
Turning to debit card behavior, 55% of young consumers said they used their credit card multiple times per week, compared to 48% of older consumers. Younger consumers also reported being more likely to use a debit card for both small and large recurring expenses like bills, car payments, rent payments or insurance than their older counterparts.
When it came to understanding payments overall, the survey identified a gap between young consumers’ understanding of various payment methods; 72% of those 45 and older said they have a full understanding of payments methods, while just 57% of consumers age 18-44 did. Despite a lack of knowledge, however, younger customers reported a level of satisfaction with alternative payment methods that was on par with their satisfaction toward traditional cards. Among 18 to 44 year olds, credit and debit cards earned satisfaction scores of 4.4 and 4.2, respectively, on a six-point scale. BNPL options had a satisfaction score of 4.4 among this demographic, while digital offerings (including mobile wallets or P2P payments) had a satisfaction score of four.
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July 06, 2022 at 04:50AM
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JD Power: Debit, credit card use still outpacing alternative payment methods | ABA Banking Journal - ABA Banking Journal
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