Bank of America Corp. should expect to lose some consumers in the Lone Star state over its new debit card fee if a recent survey from a Dallas-based regional-payments association is any indication of growing angst with financial institutions.
Some 62% of Texas consumers said they would switch providers if their current financial institution charged a $5 monthly debit card fee, the survey suggests. Overall, 93% of respondents said they would either use an alternative payment method such as cash, check or credit or just switch providers.
Swacha surveyed 600 Texans online in August, almost two months before BofA announced it would charge a $5 monthly fee to many of its customers to use a debit card.
The results are part of the Swacha’s Consumer Insights Survey and it plans to release further data soon, an association spokesperson says.
Whether those consumers actually leave their institutions remains to be seen, Dennis Simmons, the association’s president and CEO, tells PaymentsSource.
“It’s one of those emotional reactions,” Simmons says. “But perhaps, when they stop and think about having to change bank accounts, ordering new checks and a card, they might react differently.”
Simmons advises consumers to first check with their current banks to see if they offer a variety of checking account options. Most banks waive fees if accountholders maintain a certain balance, have direct deposit and do online bill-pay, among other actions.
Simmons also advises consumers engage in comparison shopping before closing their current accounts. “You might be trading one set of fees for another,” he says.
Some 21% of respondents said they would pay with credit cards instead of debit while 20% would use cash. Sixteen percent said they would write checks.
Simmons notes all three options are undesirable for merchants.
“If you think about that, that’s not really what the merchants wanted [after the Durbin amendment was enacted]” Simmons says.
Credit card have higher interchange rates, checkout lines do not flow when consumers write checks and cash is expensive for merchants to handle, he notes.
What do you think about this? Send us your feedback.
