A recent study highlights a significant increase in the use of debit cards by U.S. consumers, highlighting the evolving preferences in payment methods. The 2024 PULSE Debit Issuer Study, commissioned by Discover Financial Services’ PULSE debit network and conducted by Banking & Payments Group, reveals that more Americans are opting for debit cards for everyday transactions, leading to a surge in both the number of transactions and the total annual spend per active card.
According to the study, the number of debit card transactions continues to outpace overall spending, with active cardholders completing an average of 34.6 transactions per month in 2023. Of these, 30.7 were point-of-sale (POS) transactions, 2 were account-to-account transfers, and 1.9 were ATM withdrawals. This consistent usage has positioned debit as a daily financial tool, with the average annual spend per active debit card reaching $17,274—a notable increase of 8.1% per year between 2018 and 2023.
Steve Sievert, Executive Vice President of Marketing and Brand Management at PULSE, attributes this growth to the inherent convenience of debit cards. “The ease and convenience of debit have made it a cornerstone of the retail banking customer experience,” Sievert stated. “With active cardholders now using debit for more than 400 transactions per year, a debit card serves as a daily reminder of the value of the relationship between a consumer and their financial institution.”
One of the most significant findings from the study is the increasing reliance on card-not-present (CNP) transactions, which accounted for 36% of all debit transactions and 45% of debit spending in 2023. This marks a 5.2% year-over-year increase, reflecting a growing consumer preference for online and mobile transactions. The average CNP transaction value also rose to $60.81, a 2.8% increase from the previous year.
The study also highlights a shift towards mobile and digital payment methods. In 2023, mobile devices were used for 7% of all debit transactions and 15% of in-store contactless payments. Despite all surveyed issuers supporting the integration of debit cards into digital wallets like Apple Pay and Google Pay, only 38% of debit cards were actually loaded into these wallets. However, Apple Pay remains the most popular among users.
Issuers reported an average of three digital wallet transactions per active card per month, with an average transaction value of $27.69. Although this is 40% lower than the overall average debit transaction value, it reflects the growing use of digital wallets for smaller, everyday purchases.
The study also outlines several challenges and trends facing debit card issuers. These include the potential reduction in Regulation II’s interchange cap for issuers with assets exceeding $10 billion, increasing competition from traditional and digital financial institutions, and the growing impact of real-time payments.
As issuers navigate these challenges, they have identified three key priorities for the remainder of 2024 and beyond: optimizing penetration, active usage rates, and enhancing fraud prevention efforts. Additionally, there is a strong focus on investing in new digital capabilities, such as instant digital issuance and improving cardholder visibility into recurring payments.
The 2024 PULSE Debit Issuer Study provides a comprehensive overview of the current state of debit card usage in the U.S., highlighting the growing dependence on digital and mobile payment methods. As consumers continue to embrace these technologies, issuers are likely to prioritize innovation and security to meet the evolving demands of their customers.
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