Report: Debit Card Usage Wanes Due to Security Fears Posted by Association of Vermont Credit Unions on 2:09 PM

Consumer fears about security are leading to a drop in debit-card use, according to a new report from TSYS. Despite the drop, debit cards remain the most popular form of payment, according to the study. Forty-three percent of respondents preferred debit as their overall payment type, while 35% indicated their preferred payment type was credit. There are roughly 51 million debit cards and 15 million credit cards issued by credit unions.

"Consumers, concerned about the security of their cards and payments, are both demanding and accepting of market changes," the study said. "Consumers have a heightened awareness of security, due to both the media and their own experiences. We found that consumers are interested in tools such as transaction authorization controls, instantly viewable transactions and text message alerts to help them protect their accounts."

Consumers are interested in new card security features, but are familiar with some features more than others, according to the study. About 48% of respondents said they have heard of chip cards, and 14% indicated that they have already received a card with a chip. Tokenization is also gaining interest as a fraud- and risk-protection tool.

Only 47% of businesses expect to have their payment terminals updated with EMV chip technology by the end of next year, according to the Payments Security Task Force.