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A new study from the Financial Services Group at Lightspeed Research shows that the majority of U.S. consumers are not in favor of the payment choice limitations that could ultimately result from Senator Durbin’s amendment to the proposed financial reform bill. The research results further indicate that these consumers would alter their shopping behavior based on merchants’ payment acceptance policies.
Senator Durbin’s amendment (SA 3989) to the proposed Restoring American Financial Stability Act of 2010 would give the Federal Reserve Board the authority to establish rules and regulations related to the interchange fees that issuers and payment card networks could charge with respect to debit card transactions. It would also reduce payment card networks’ oversight of merchants’ card acceptance policies, allowing merchants to offer discounts for non-card purchases, and to set minimum/maximum transaction values for card purchases.
The new study from Lightspeed Research, titled “U.S. Consumer Card Spending: The Potential Impact of the Durbin Amendment,” evaluates the possible ways in which Senator Durbin’s amendment could change consumers’ use of card-based payment products. Key findings from the study include:
• More than two-thirds of U.S. consumers oppose the idea of not being able to use a debit or credit card for small-dollar purchases and 53% indicate that they would not shop as often at stores that imposed these limitations.
• The use of debit cards for transactions under $20 has steadily increased during the past few years, and now accounts for 56% of all debit transactions.
• For purchases in the sub-$10 range, fully one-third of all consumers prefer using plastic to cash.
• 88% of consumers oppose the idea of being charged a higher price for using credit or debit for a purchase, while only 44% are in favor of receiving a discount for using cash.
About This Research
Between May 24 and June 1, 2010, Lightspeed Research surveyed a nationally representative sample of 4,898 U.S. consumers. The survey included questions about consumers’ current usage of payment products (cash, checks, debit cards, and credit cards), as well as a series of scenario-based questions related to the changes that could come about due to Senator Durbin’s amendment (e.g., minimum purchases for card products, incentives for using non-card products for payment, etc.). Lightspeed Research also incorporated analysis of transactional data from its Behavioral Tracking Panel, through which panelists agree to allow Lightspeed Research to passively track their usage of credit and debit.
About Lightspeed Research
Lightspeed Research delivers valuable data to help clients make informed business decisions. With proprietary online panels throughout the world, our verified, engaged, and deeply profiled survey respondents can support research studies that vary in scope and complexity. Lightspeed Research’s expert Client Operations Team offers data collection services including survey design, sample management, programming, and reporting. The company has offices throughout the United States, Europe, and Asia Pacific. Lightspeed Research is part of Kantar, the information insight and consultancy division of WPP. For more information, please visit www.lightspeedresearch.com.
About The Financial Services Group at Lightspeed Research
The Financial Services Group at Lightspeed Research provides its clients with comprehensive and accurate perspectives on consumers’ shifting usage of payment products by integrating passively collected credit and debit transactional data, attitudinal insights and industry expertise. The Financial Services Group also produces a series of competitive intelligence studies that provide timely visibility into the types of communications that credit card issuers and retail banks are sending to their customers.