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Today’s Merchants Find Debit Is Key to the Modern Consumer

Merchant accepting debit card payment

Everything consumers do has shifted over the past year—and payment preferences are no exception. Even before the pandemic, debit card usage was rising steadily, but it has exploded amid economic uncertainty and concerns about the future. Consumers of all ages from all over want to pay with their debit cards, and when they can’t, they take their business elsewhere.

As a result, merchants who don’t accept all debit card brands risk losing revenue not just in the short term, but in the form of lost lifetime opportunities.

A Merchant Opportunity—and Necessity

Consumers are using debit cards more today than they used to—and it’s easy to see why. Wary of current economic conditions, people are responding by keeping close tabs on what they spend.

Debit offers shoppers a real-time picture of their bank accounts with the convenience of plastic. No wonder it’s among the most popular payment methods. In fact, a 2020 survey conducted by 451 Research found that 9 in 10 people with a bank account use debit cards.1

For merchants, this development represents both an opportunity and a necessity. Consumers want to pay with their preferred method, and debit is clearly among those at the top of the list. But more than one in four (28 percent) respondents to the 2020 survey said they encountered a merchant over the past year that didn’t accept debit cards.1

Nurturing the Customer at Every Stage of the Journey

Of course, the negative customer perception associated with merchant non-acceptance is nothing new. In 2018, a survey found that 38 percent of customers who couldn’t pay with their debit card either spent less at that merchant or made their purchase elsewhere.2 Consumers are even more sensitive now, with 54 percent describing a similar outcome in a 2020 survey. Moreover, one in three consumers placed the blame on the merchants—not card networks, issuers, or payment processors—for not accepting debit cards.2

This fact likely contributed to another important finding: that 70 percent of respondents who encountered a merchant that didn’t accept debit cards said they were unlikely to return to that merchant, up from 55 percent in 2018.2 So, merchants who don’t accept debit aren’t just missing opportunities in the short term. They’re also losing their customers’ loyalty— and the future revenue that comes with it.

Fortunately, most merchants appreciate how important debit is for their business and actually prefer it over cash or check. Case in point: More than three in four merchants, or 77 percent, said they prefer when their customers use debit. 2 And preference for debit was strongest among businesses with 251-1,000 employees, where 82 percent of respondents said they preferred their customers use debit.2

The Trend Is Everywhere— but Geography Matters

Preference for debit has increased throughout the U.S. in the past two years, but the trend is even more pronounced in rural areas—despite the common perception that cash is often king.

In fact, debit is preferred nearly twice as much as cash in rural areas for everyday transactions. And consumers there prefer debit even more than those in urban or suburban areas: 46 percent of respondents from rural areas said they prefer debit for everyday spending, versus 43 percent of people from metropolitan areas.2

Why does this matter? Because the issuance of debit cards by financial institutions varies widely based on geography. Metropolitan consumers tend to have accounts with national banks, while many rural consumers use community or regional banks. In fact, 47 percent of survey respondents in rural areas are customers of these smaller banks compared with just 35 percent in metropolitan areas.2

That’s why it’s imperative that merchants accept all card brands. Regardless of location, broad acceptance is the only way for merchants to capture every potential transaction from all potential customers. Because checkout isn’t just the final bookend in the customer journey—it’s a make-or- break moment. And the consequences of a negative interaction are severe and long-lasting.

What’s more, with debit’s growing popularity among all demographics, there’s no reason to believe this phenomenon will change.

A Win-Win Situation

The pandemic has certainly contributed to the upswing in debit usage, as consumers have good reason to monitor their finances more carefully than before. But this isn’t just a fleeting trend. Increases in debit preference—including for contactless and card-not-present payments in-store and online—are expected to continue.

The opportunity for merchants is clear: Make the payment process as easy as possible by accepting all debit card brands, and advertise this fact clearly in-store and online. Sixty-nine percent of Discover Cardholders3 look for signage before deciding on a merchant, and 73 percent of Discover Cardholders3 look for signage before paying.4

What does this mean for merchants? An increased base of loyal, lifetime customers—and increased revenue, both now and in the future.

For more information on Discover® Debit and to test your terminal for Discover® card acceptance, click here.

To order free signage, click here.

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1451 Research, November 2020. Debit Cards Drive Commerce: 2020 Edition. Merchant and Consumer Insights on Debit Card Usage and Acceptance.

2 451 Research, November 2020. Debit Cards Drive Commerce: 2020 Edition. Merchant and Consumer Insights on Debit Card Usage and Acceptance.

3 Discover Cardholders who have traveled internationally in the past 24 months.

4 C+R Research Study of 1,200 Discover Cardholders, July 2020, commissioned by DFS Services LLC.

The information provided herein is sponsored by Discover® Global Network. It is intended for informational purposes, and is not intended as a substitute for professional advice.