Debit better value than credit card
The value of payments made on debit cards is increasing at almost three times the rate for credit and charge cards, according to the latest Reserve Bank payment data.
Payment by debit card has grown from 31.4 per cent of total non-cash payments in 2006 to 34.7 per cent, according to the latest figures. Payment by credit card has fallen from 56.5 to 52.8 per cent of total non-cash payments during the same period. Payment by charge card has remained stable, rising slightly from 12.1 per cent of non-cash payments in 2006 to 12.5 per cent now.
Payment industry analyst Mike Ebstein of MWE Consulting said there were a number of reasons for the change. Credit cards have become more expensive since the Reserve Bank's regulation of interchange pricing earlier this decade and consumers recognise that there is less value in many reward programs.
Another factor is that banks have embraced scheme debit (debit cards issued by Visa and MasterCard), an offering previously limited to building societies and credit unions. Ebstein said: “Consumers like scheme debit because it gives them the functionality of credit cards, such as telephone and online transacting, without the downside of credit.”
Source: The Sheet