Debit Cards Are The New Plastic

With the economy in a slump, shoppers are turning to plastic to make purchases these days; however it is not the plastic seen in years gone by. According to the Nilson Report, debit card use is expected to climb 13%. The debit card is the new preferred type of payment America is reaching for.

Debit use was on the rise even before the economic slump, as the convenience factor of debit over checks is enormous. Combined with ATM use, the widespread availability of direct deposit and online bill payments, many consumers avoid cash and physical bank branches altogether. The debit card has changed from a check alternative to a must have item for younger consumers.

Some credit card companies have been lowering limits and raising interest fees across the board, and cardholders, who are already feeling the pinch, have become more conscious about overspending. Using debit accrues against an existing balance that is more likely to be budgeted for. Additionally, consumers who do not qualify for credit cards still may qualify for debit cards, and need to have a manner to use electronic payments in the American modernized marketplaces.

With consumers shifting spending patterns towards debit, merchants would do well to make sure they have been set up to process debit transactions. A pin-pad is critical equipment: if must be possible for the customer to enter their own pin number as a matter of Visa and MasterCard policy. Performing signature based debit transactions could be important as well, and in this case, purchasing a terminal that integrates a dynamic screen is required. Most recent terminals have the capability to process both pin based or signature based debit, either natively or though add on devices.

As consumer adoption of debit cards continues to rise, stores that do not take debit should consider the sales that they are missing out on. The added convenience of not carrying cash or having to visit an ATM can be the deciding factor in where purchases are made.