Imposing a fee on debit cards would drive many consumers back to cash payments, according to a report released Thursday by Mercator Advisory Group.
The Coconut Creek, Fla., firm found that a $10 monthly fee for using debit cards would prompt "a majority" of consumers to stop using them. The result was even more pronounced among people earning more than $75,000 per year, with more than 75% indicating that they would probably shift to cash or other forms of payment.
"Debit cards are currently the preferred form of payment for many consumers at convenience, drug and grocery stores, but that preference is tenuous at best when even a modest fee is introduced into the mix," Patricia Hewitt, a Mercator director, said in a press release.
Mercator surveyed 1,000 U.S. adults online between July 21 and July 25.
It also found that consumers who drop their banks' debit cards because of fees would be interested in decoupled debit cards issued by other financial companies that did not have fees.
One-third of respondents said they would be interested in such a card, and 48% said that they would consider a decoupled debit card if it also included a rewards program.
"This study clearly demonstrates just how price-sensitive the consumer market is. Decoupled debit allows these consumers to avoid fees and obtain rewards, and at the same time help merchants regain control over payment choices," Joe Randazza, the president of the National Payment Card Association, said in the release.
