Time heals all wounds and that’s true for the debit card industry as well. The Durbin Amendment rocked the debit card industry, but financial institutions are finding their way back to the debit card. We know that debit is the primary way most United States consumers use to access their everyday spending funds and as business models have evolved, encouraging higher use equates to better economics for regulated financial institutions and increases the value of the industry as whole.
Because banks are earning less from debit cards, you might think that they’d want to steer customers away from using them. In fact, just the opposite is true. Banks are trying to make up for the decrease in the amount collected per fee with increased volume.
Consumers looking for added value are finding it from debit issuers who are leveraging more of the deposit account relationship to provide money management tools which are enhanced through using the card to transact – something particularly appealing to younger consumers who have been burned by the recession.
“A lot of the millennials have been influenced by painful recession issues with their parents,” Riley says. Plus, many already have a heavy debt load because of student loans and don’t want to add to that by running up credit card balances.
Click here to read more from Time.
