When it comes to payments, debit has been stealing credit’s “thunder” for the past few years. However, credit isn’t going away anytime soon, meaning that credit card payment and payment processing trends merit merchants’ attention. Among these trends:
Debit may be the preferred way to pay, but many consumers continue to use credit anyway
Forty-six percent of credit union members and 42 percent of credit union non-members queried for PSCU’s recent Eye on Payments study deemed debit their favorite payment method. But according to PSCU’s most recent monthly Payments Index, there is an emerging discrepancy between what members consider to be their preferred payment method and the method they are actually using. When asked which payment method they will most likely use in the next six months, nearly the same percentage of individuals queried cited credit rather than debit (76 percent and 80 percent, respectively).
Moreover, some demographic groups still have a very high propensity for credit. Data from the Federal Reserve Bank of Boston indicates that consumers aged 55 to 64 are the most likely to use a credit card (78.1 percent), while consumers aged 45 to 54 use it 70.5 percent of the time. Individuals aged 35 to 44 have a lower propensity for credit, as do those ages 25 to 34. Consumers in both group utilize credit around 69 percent of the time. By contrast, fewer than half of consumers under 25 years old do the same.
Contactless credit card payments have entered the mainstream
U.S. merchants clearly recognize the importance of accepting contactless credit card payments, as more than 95 percent can now accept them. That’s a good thing: A study by Mastercard found that nearly eight out of 10 cardholders want to use, and do use, contactless payment options. Nearly three-quarters (74 percent) of respondents to the study said they will continue to utilize contactless cards when the pandemic is over (or has become an endemic).
Figures from the PSCU Eye on Payments study also demonstrate that contactless credit cards have attained mainstream status. Specifically, PSCU’s research shows, the number of consumers who use a contactless credit card “a few times a week” has increased by 53 percent since 2020.
QR card payments are also a “thing”
The pandemic has increased the popularity of in-person credit card payment via QR codes, at venues that range from retail establishments of all kinds to healthcare providers’ offices. A heightened desire for virtual credit card payment convenience has also made QR code scanning a popular remote payment option—for instance, scanning a QR code on a paper bill to remit payment via a credit card.
Not surprisingly, 58 percent of respondents to a survey by MobileIron, a mobile security platform, expressed a desire to see QR codes used more broadly in the future. Some 43 percent noted plans to utilize a QR code as a payment method in the near future.
Masked credit cards are emerging as a viable virtual payment option
Many online services now offer consumers a means of creating a “virtual burner credit card” (or “virtual burner debit card”) to be used in conjunction with their regular card. In this scenario, individuals engage a digital service to obtain a unique card number, expiration date, and security code they can use to pay for goods and services online.
These “details,” according to MoneyWise, “lead to a dummy account that will, in turn, charge (consumers’) real credit card or bank account” when a transaction is executed. If the merchant experiences a data breach, account information belonging to users of masked cards remains safe.
Businesses are also adopting masked credit cards. Like consumers, they are doing so as a security measure.
E-Complish’s payment processing solutions support credit card payment acceptance—and much more. Click here for details or to schedule a consultation.