Credit Cards and Debit Cards Usage are Expected to Grow, Despite the Recession
Credit Card Processing and Why It's Important for Your Business
According to a survey done by Pulse, one of the nation’s leading ATM/debit networks, there was an 8% increase in debit card transactions in the second half of 2008 and predicted growth of 2009 by 7%, despite the current economy.
Consumers carry more than 1 billion Visa cards worldwide, more than 450 million of those cards are being used in the United States. That means 1 in every 3 consumers in the United States make purchases with a credit, debit or prepaid card. This clearly indicates that even in such a challenging economy, consumers are still willing to use their credit/debit cards, maybe even more so than cash.
Credit cards are no longer just for international travel
With the introduction of debit cards, credit cards are not confined to international travels. Even a couple of years ago, most credit cards were usually confined to mostly international travels only. But with the introduction, growth, and popularity of the debit cards to the American consumers over the years, they are increasingly choosing to take advantage of the convenience and security of their debit cards, making them greatly dependent on their cards to make everyday purchases. According to the Cuna Lending Council, debit card as a payment mechanism has experienced double-digit for more than a decade and remains the fastest growing consumer payment vehicle.
As most financial institutions automatically assign consumers a debit card with their personal and business accounts now a days, there is no wonder why consumers prefer their cards to cash–it’s convenient, faster and easier. There is no longer the hassle of going out of your way to drive to the bank to withdrawal cash anymore, almost all purchases can be done with your debit cards. 7 out of 10 consumer possess a debit card–that’s more than 53% of all consumers using their debit cards to make retail purchases on a monthly basis where on average, cardholders will use their debit cards 11.9 times each month.
Credit card companies offer sophisticated products and services
As credit card companies are continuously thinking of new ways to serve their consumers with more efficient, refined products and services based on credit/debit card transactions, cashless payment have grown with consumers acceptance, such as modern card payment system. Most financial institutions offers their customers electronic bill pay method that is convenient, easier and faster than sending off payments through snail mail with checks that could take a few days or weeks for companies to take the money from your account. Credit/debit card-based bill payments will slowly, but surely, grow exponentially in the coming years, which will not only boost bank deposits, but also increase stronger economic efficiencies and performances.
There is no longer the danger of fraud loss associated with debit cards
Consumers once associated using credit cards with fraud, more specifically identity theft–that using a credit/debit card was not safe and your money could be compromised. In fact, credit/debit card fraud is the No.1 fear of Americans in the mist of this Great Recession. But with services offered by credit card companies, such as identity theft protection, the fear has started to decline. As there is much hype on credit/debit card fraud, in actuality, trying to commit fraud is a lot harder than consumers might think. The use of information to committed fraud is not easily accessible.
In majority of the cases involving consumers, criminals do not have enough data to commit a crime because most cards are encrypted, password-protected that needs specific software to open. Credit/debit card fraud has not risen in the past 10 years. It dropped from 19 cents for every $100 in 1991 to 7 cents for every $100 by the year of 2006. That is no more than 2% of all credit/debit card accounts exposed in a security breach of unauthorized spending, roughly 1 in 1,020 people.
Consumers will continuously use their credit/debit cards, even with the economy the way it is at the moment. Business owners need to realize that credit/debit card is a big part of consumer spending. It will not go away and for those who have yet to set up a merchant account, would ultimately delay their businesses’ financial growth.
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