The total dollar volume of purchases made with Visa debit cards at the end of 2008 was larger than the amount spent on credit card purchases -- the first time debit purchases surpassed credit. Visa's 2008 fourth-quarter debit card transactions made up more than 50 percent of Visa's volume."The reality is that the vast majority of consumers want to pay as they go," said Stacey Pinkerd in a press release. Pinkerd oversees Visa's debit-card business.
Visa's growth in its debit card segment far exceeded analyst's predictions. (Editor's Note: Not the analyst I know. See Debit is King, Replaces Cash on Throne So that I'm on the record for future developments when they occur:
- PIN Debit will increase it's margin on signature debit,
- eCommerce will "eventually" overtake Brick and Mortar
- Hackers will continue to outsmart and their attacks will continue to breach software applications, until we finally realize that:
- Hardware is the only tried and true method to conduct secure online transactions, (and a 2FA 3DES E2EE PCI 2.0 PED that encrypts Track 2 data and utilizes DUKPT does it best).
- Analysts will realize and start writing that Software PIN Debit is not really True PIN Debit especially when:
- Online Merchants Start Demanding Card Present and TRUE PIN Debit Interchange Rates which they cannot derive from a software based POS solution.
- True PIN Debit will become ubiquitous on the web by 2014.
MasterCard also witnessed a major shift toward debit cards, reporting its debit card transactions rose 13 percent last year while credit card purchases dropped more than 2 percent.
Payment cards have long been the preferred purchase method for American consumers, with credit and debit card purchases for retail goods and services outmatching cash and check payments since 2003. Debit cards have slowly approached the levels of credit card use in the 21st century, according to a release by the Nilson Report.
The switch in payment cards is reflected in debt levels and types of accounts nationwide, with the U.S. government reporting in March that personal saving rates rose to 5 percent in January, the highest in 14 years. Meanwhile, revolving debt from credit cards plummeted more than 9 percent, said the Federal Reserve.
However, the Nilson Report projected debit cards will also eventually be reined in, with the buildup in both credit and debit spending slowing to single digits after five consecutive years of double-digit growth.
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