The US Consumer – After the Storm [ATM, Debit & Prepaid Forum 2009]

by guest on October 19, 2009

in Conferences & Meetings, Debit Cards, Jacqueline Chilton, Prepaid

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Kicking off the ATM, Debit & Prepaid Forum 2009 was the keynote address from Tim Murphy, Group Executive Core Products, Global Debit & Prepaid, MasterCard Worldwide.  He predicts that great companies will emerge from the economic downturn’s storm by showing true leadership in supporting the changing customer needs.

Of particular interest are behavioral changes by the US consumer.  MasterCard’s Spending Pulse data shows consumer spending on discretionary items has been hit much harder than necessities and what consumers define as “necessities” may have changed – online shopping for example has not been nearly as affected as full-service restaurants.  Tim talked about research that identifies budgeting, control, savings and value as new priorities for the US consumer.   Savings rates are higher and customers have moved from a “Friday night out” to a “Friday night in” mentality with game nights or movie rentals.  Each of these changes present opportunities for banks to support customers in achieving these goals.

Some key points:

  • Research is showing that debit card rewards are very important to consumers.  46% of debit cardholders become dissatisfied based on limited or no debit card rewards.
  • Prepaid cards have reached the tipping point and are no longer a niche product.  Prepaid cards are a way to meet evolving consumer needs and target new customer segments like the underbanked.  Consumers are not the only ones using prepaid.  The government is moving benefits programs to prepaid cards and businesses (e.g. Wal-Mart) are removing checks from payroll with payroll cards.

Interestingly he dodged the question when asked if CHIP & PIN would come to the US. (See Payments Views blogs on CHIP & PIN challenges for travelers).  Beyond the fraud considerations that might encourage, but do not justify, changes at the point of sale to CHIP and PIN, there are currently interoperability considerations as other countries move to a new standard leaving US magnetic swipe technology behind.

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