When it comes to payment cards, what US bank customers are being
encouraged to use and what they want are two different things,
according to Avivah Litan, an analyst at research and advisory
company Gartner. Her conclusion is based on a consumer survey of
payment card preferences when buying groceries conducted in late
2007.
“Despite significant marketing campaigns by banks and card
issuers to steer consumers towards using debit cards with a
signature, ostensibly so that the banks can earn more interchange
revenue, consumers prefer entering their PIN to pay for groceries
with their debit card over all types of signature-based card
payments, whether credit or debit,” said Litan.
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Gartner found that consumers believe a PIN increases the
security of a transaction and they prefer debit card payments that
require entry of a PIN, despite the fact that only debit and credit
card payments with physically signed receipts typically earn them
reward points.
Advising merchants, Litan said: “Bricks-and-mortar businesses
who accept electronic consumer payments should promote use of
PIN-based debit card payments by steering consumers to them through
payment terminal programs and/or by offering store-based incentive
programs. Businesses pay less to banks for PIN-based payments and
since consumers prefer them anyway, this is a win-win strategy for
all parties except credit card issuers and banks.”
Gartner’s survey also revealed that contactless cards are the
least-favoured payment type when shopping for groceries. There is a
similarly small interest in using mobile phones for making
payments, noted Gartner.
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