View printer-friendly version HOUSTON-- BUSINESS WIRE -- The 2018 Debit Issuer Study found that consumer debit use continued to grow in 2017 contributing to improved overall debit performance while fraud losses per transaction declined for the second consecutive year On the mobile payments front the 13 th annual survey commissioned by PULSE one of the nations leading debit ATM networks and conducted by Oliver Wyman found that cardholder enrollment in mobile wallets doubled year-over-year while transactions per enrolled card remained flat Issuers also reported that the historical dichotomy of PIN and signature debit is largely obsolete PIN transactions used to be the sole domain of electronic funds transfer EFT networks while signature transactions were the card brand networks arena Now issuers increasingly track how the card is used by the cardholder in-store or online for example rather than the network through which the transaction is routed This change was driven in part by growth in transactions requiring no authentication and card-not-present purchases both of which are now offered by larger EFT debit networks such as PULSE The debit landscape continues to change dramatically said Steve Sievert Executive Vice President of Marketing and Brand Communications for PULSE Weve moved from the simple world of PIN or signature to an array of options including PINless and signature-less transactions at the point of sale and biometric authentication in digital commerce and mobile wallets Meanwhile advances in payments and a stronger overall economy are resulting in improvements in debits key performance indicators Debit Performance Strengthens Among the strong debit fundamentals highlighted by the issuers in the study Higher Penetration Rate Seventy-six percent of checking accounts had associated debit cards in 2017 compared to 75 percent in 2016 Increased Card Activation The percentage of debit cards used at least monthly grew to 66 percent from 65 percent Greater Use Among active consumer debit cardholders debit cards are used to make 237 purchases per month up from 229 last year and an all-time high in the history of the study Fraud Losses Decline for Second Year Based on fraud losses incurred by the study participants and extrapolated to the entire US debit industry issuers lost an estimated 850 million on point-of-sale debit transactions in 2017 a 55 percent decrease from 2016 This decline is likely due to the transition to chip-enabled debit cards which is now largely complete for issuers Surveyed issuers have converted 91 percent of their debit cards to chip cards Card-not-present transactions may be more vulnerable to fraud due to the lack of chip card authentication or in the vast majority of cases PIN protection Even though card-not-present transactions account for 21 percent of transaction volume they represent 44 percent of net fraud cases The average net fraud loss associated with these transactions was 123 per incident As the industry has moved to chip transactions fraud has migrated to transactions that dont require a physical card said Jim Lerdal Vice President of Fraud and Risk Management for PULSE Survey respondents reported that the costs of this fraud are high amounting to 105 cents for every card-not-present transaction of which issuers bear 17 cents on average The remaining 88 cents constitute losses borne by merchants and cardholder claims that are not charged back On average issuers in the survey authorized nearly 95 percent of all attempted debit transactions in 2017 The biggest reason for declined transactions among this group is not suspected fraud which impacted 04 percent of their debit transactions but insufficient funds which affected 18 percent of transactions Mobile Digital on the Move The survey revealed that 86 percent of responding issuers support at least one mobile payment option up from 74 percent in the previous study Mobile payments are defined in the study as the ability to use a smartphone to pay at a physical point of sale Cardholder enrollment in mobile programs doubled in the last year However transactions initiated with a mobile wallet represented only 06 percent of in-store debit card purchases in 2017 compared to 03 percent in 2016 Enhancing digital capabilities topped the list of 2018 priorities for survey respondents They want to give cardholders tools for greater control and flexibility in managing their debit card activity Issuers also want to communicate with cardholders for real-time verification and fraud management and even to automatically provision a digital card in a mobile wallet while awaiting the issuance of a plastic card for example We see a real opportunity for financial institutions to enhance their debit card offerings with new digital capabilities said Tony Hayes a partner at Oliver Wyman who co-led the study There is a clear link between greater cardholder engagement and overall customer loyalty and retention About the Study The 2018 Debit Issuer Study is the 13 th installment in the study series commissioned by PULSE and conducted by Oliver Wyman an independent management consulting firm The study provides an objective fact base on debit card issuer performance and financial institutions outlook for the debit card business Fifty-nine financial institutions including large banks credit unions and community banks participated in the study Collectively the participants issue approximately 148 million debit cards and represent 42 percent of the US debit market The sample is representative of the US debit market in terms of institution type geography and debit network participation About PULSE PULSE a Discover Financial Services NYSE DFS company is one of the nations leading debit ATM networks Financial institutions merchants processors and ATM deployers across the United States and around the world depend on PULSEs comprehensive suite of products and services and its commitment to providing exceptional client service flexibility security and superior economics PULSE also is a resource for debit education research and knowledge drawn from more than three decades of industry experience For more information visit pulsenetworkcom PULSE Anne Uwabor 832-214-0234 anneuwabor pulsenetworkcom or DPK Public Relations Dan Keeney 832-467-2904 dan dpkprcom Source PULSE