Card-not-present debit transactions surged 21% year-over-year in 2019, according to a new study commissioned by Discover Financial Services’ PULSE debit network and conducted by Oliver Wyman. The 2020 Debit Issuer Study found that one card-not-present transaction type – account-to-account (A2A) transfers using debit – is the fastest growing category of debit, doubling year-over-year and accounting for 40% of total debit growth.
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The 2020 Debit Issuer Study reports that card-not-present debit transactions surged 21% in 2019, while account-to-account transfers using debit is the fastest growing category of debit, doubling year-over-year and accounting for 40% of total debit growth.
These increases reflect growth in consumer use of debit to shop online, and to fund purchases and person-to-person transfers using apps such as PayPal, Venmo and Zelle. In addition, more business-to-consumer payments are being delivered via debit, including insurance payouts and payments to gig-economy workers such as drivers for ride-share services.
While the growth rate for card-present transactions was a more modest 2%, these transactions still represent 73% of all debit transactions.
“Debit is being used more often by more consumers, and in a greater variety of ways than ever before,” said Jennifer Schroeder, executive vice president of product management with PULSE. “This year’s Debit Issuer Study shows that, even before the COVID-19 pandemic, debit use was growing in digital-commerce channels. This growth was a key driving force behind the record 77.4 billion debit transactions that were made in the U.S. in 2019, up a very healthy 6.5% year-over-year.”
The study, based on a representative sample of U.S. debit issuers, determined that debit’s continued strength makes it more important than ever to financial institutions (FIs). Approximately 25% of non-interest income for community FIs now comes from debit interchange. Historically low interest rates, combined with debit’s resilience, makes non-interest income from their debit programs more important than ever.
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