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The value of debit card purchases may decrease "significantly" as the unemployment rate is this country creeps toward 7%, William H. McCracken, CEO of Atlanta-based Synergistics Research, tells CardLine sister publication ATM&Debit News. "Debit card penetration is 75% to 80% (in the United States), so you're seeing a lot of debit cards essentially being tucked away because if individuals are not earning, they are not going to be spending," he says. According to the latest statistics from the U.S. Department of Labor, the unemployment rate in November rose from 6.5% to 6.7%. December unemployment statistics will be released Friday. In 2007, the average unemployment rate was 4.6%. Debit card transaction volume may not decrease much as the recession continues, but the amount spent on necessities such as groceries will decline based on consumer behavior in past recessions, McCracken says. "Those kind of purchases are less affected by economic turmoil. However, it would be an error by the industry to believe that they are immune to economic fluctuations," he says. A $50 debit card purchase may become a $30 purchase if consumers choose generic grocery products to save on the final cost, McCracken says.
