April 16, 2012 12:00 PM Eastern Daylight Time
New Research Shows Half of All Non-cash Payments for Gas is Debit
WASHINGTON--()--New data released today, by the Electronic Payments Coalition, finds that gas retailers are saving $1 billion annually at the expense of consumers, thanks to the so-called “Durbin amendment,” a provision of the Dodd-Frank legislation which capped what retailers pay to accept debit cards beginning in October 2011.
According to the U.S. Energy Information Administration, nearly 134 billion gallons of gas were sold in 2011, with approximately 48 billion gallons purchased using debit – the type of payment impacted by the Durbin amendment, which reduced interchange rates by about 70 percent for this category. However, there continues to be no evidence that retailers are passing along savings from this windfall – even at gas stations, where debit is the overwhelmingly most popular form of payment.
“For gas station purchases, consumer preference for debit cards has increased substantially over the past several years – at the expense of cash, checks, and credit cards”
According to new research by Phoenix Marketing International, half of all non-cash payments for fuel are made with a debit card (36 percent of all payments including cash), making it overwhelmingly the most popular payment choice at the pump. “For gas station purchases, consumer preference for debit cards has increased substantially over the past several years – at the expense of cash, checks, and credit cards,” explains Greg Weed of Phoenix Marketing International. The research among 5,166 consumers reporting on recent gas station purchases found that the debit card share of both transactions and dollars was higher than any other payment method. “Among households with an income of less than $50,000, debit card share of gas station transactions was twice that of credit cards.”
“Whenever Congress meddles in an industry debate over who pays what, consumers never win,” says Trish Wexler, spokeswoman for the Electronic Payments Coalition. “One side gets a leg up and keeps their windfall, while consumers end up footing the bill. No one is surprised to see that gas retailers are keeping billions of dollars for themselves, while their customers continue to be punished at the pump. Americans should go to their gas stations and demand what’s theirs – a discount for debit.”
Consumers can visit www.WheresMyDebitDiscount.com for a new online savings calculator to find out what consumers could save at the pump when paying with debit. For example, the average 16 gallon fill-up paid with a debit card at today’s gas prices could receive 4 - 5 cents per gallon as a discount.
Cash discounts are more prevalent in gas retailing, while discounts for debit are virtually non-existent – the very area where gas retailers received the Durbin subsidy. “Unlike a debit discount, cash discounts lure customers away from the convenience of the pump and into the convenience store, where they are lured into buying items with high mark-ups,” said Wexler.
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers and the media on the system’s role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.
New Research Shows Half of All Non-cash Payments for Gas is Debit
WASHINGTON--()--New data released today, by the Electronic Payments Coalition, finds that gas retailers are saving $1 billion annually at the expense of consumers, thanks to the so-called “Durbin amendment,” a provision of the Dodd-Frank legislation which capped what retailers pay to accept debit cards beginning in October 2011.
According to the U.S. Energy Information Administration, nearly 134 billion gallons of gas were sold in 2011, with approximately 48 billion gallons purchased using debit – the type of payment impacted by the Durbin amendment, which reduced interchange rates by about 70 percent for this category. However, there continues to be no evidence that retailers are passing along savings from this windfall – even at gas stations, where debit is the overwhelmingly most popular form of payment.
“For gas station purchases, consumer preference for debit cards has increased substantially over the past several years – at the expense of cash, checks, and credit cards”
According to new research by Phoenix Marketing International, half of all non-cash payments for fuel are made with a debit card (36 percent of all payments including cash), making it overwhelmingly the most popular payment choice at the pump. “For gas station purchases, consumer preference for debit cards has increased substantially over the past several years – at the expense of cash, checks, and credit cards,” explains Greg Weed of Phoenix Marketing International. The research among 5,166 consumers reporting on recent gas station purchases found that the debit card share of both transactions and dollars was higher than any other payment method. “Among households with an income of less than $50,000, debit card share of gas station transactions was twice that of credit cards.”
“Whenever Congress meddles in an industry debate over who pays what, consumers never win,” says Trish Wexler, spokeswoman for the Electronic Payments Coalition. “One side gets a leg up and keeps their windfall, while consumers end up footing the bill. No one is surprised to see that gas retailers are keeping billions of dollars for themselves, while their customers continue to be punished at the pump. Americans should go to their gas stations and demand what’s theirs – a discount for debit.”
Consumers can visit www.WheresMyDebitDiscount.com for a new online savings calculator to find out what consumers could save at the pump when paying with debit. For example, the average 16 gallon fill-up paid with a debit card at today’s gas prices could receive 4 - 5 cents per gallon as a discount.
Cash discounts are more prevalent in gas retailing, while discounts for debit are virtually non-existent – the very area where gas retailers received the Durbin subsidy. “Unlike a debit discount, cash discounts lure customers away from the convenience of the pump and into the convenience store, where they are lured into buying items with high mark-ups,” said Wexler.
About the Electronic Payments Coalition
The Electronic Payments Coalition (EPC) includes credit unions, banks, and payment card networks that move electronic payments quickly and securely between millions of merchants and millions of consumers across the globe. EPC’s goal is to protect the value, innovation, convenience and competition in today’s growing electronic payments system. EPC educates policymakers, consumers and the media on the system’s role in economic growth, and the importance of protecting consumer choice and stability for the continued growth of global commerce.
