HOUSTON – Surcharge-free ATM access is gaining in popularity among debit card issuers, according to the 2008 Debit Issuer Study, commissioned by PULSE.
Financial institutions increasingly are offering debit rewards, the 2008 Debit Issuer Study, conducted by Oliver Wyman, found. Among the findings:
• ATMs: Among issuers surveyed, 56% have cards that participate in a surcharge-free ATM network, while 84% of credit union respondents offer surcharge-free ATM service to their members for certain “off-us” transactions. The survey found “on us” activity to be growing. Of the institutions that reimburse ATM surcharges, 45% limit total monthly per-cardholder reimbursements. In addition, “active” debit cardholders (most commonly defined by respondents as those that have made a signature debit transaction within the past 30 days) perform an average of 3.4 ATM transactions per month.
• Debit Rewards: PULSE said the availability of debit rewards has increased significantly since the previous PULSE study, with 51% of respondents now offering rewards, compared to 37% in 2006. An additional 23% of issuers surveyed say they are considering adding a rewards program. The increase in debit rewards is driven mainly by a growing interest in cash rewards, which are offered by 42% of respondents that have debit rewards programs, compared to 16% in 2006. Points-based rewards are the most common program type, offered by 58% of the institutions that have programs. Merchant-funded rewards programs are gaining in popularity and far out-pace other program types in terms of cardholder engagement (83%).
• Prepaid: Of survey respondents, 61% currently offer open-loop prepaid gift cards, and an additional 16% plan to enter the market. While many institutions sell gift cards, only 1% of consumers purchase prepaid gift cards from financial institutions.
