Four in Five Consumers Won’t Tolerate a Monthly Debit Card Fee

What's Next In Payments®
1:34 PM EDT December 7th, 2011

December 7, 2011

Consumers are quickly becoming fed up with banking fees. If your financial institution began charging $2/month for the convenience of having a debit card with your checking account, what would you do? Recent research from Mintel Comperemedia found that only 19% of consumers would pay the fee and continue to use the card, while 56% said they would use another payment method instead.

Not surprisingly, consumer sentiment about bank fees doesn’t seem to be subsiding. Almost a quarter of those surveyed (24%) reported that they would switch banks over a $2/month fee. Moreover, 29% of individuals surveyed for a separate study said they had heard of Bank Transfer Day that took place November 5th, 13% actually transferred banks and 8% planned to do so.

“Banks moved customers into new services like debit cards and online banking because they were cheaper and more profitable than cash and checks,” says Susan Wolfe, vice president of financial services at Mintel Comperemedia. “They can’t now backtrack and charge consumers for things they’ve been offering for years at no additional cost.”

It seems banks aren’t getting the hint, as the incidence of free checking accounts has plummeted in recent years. In Q3 2007, 75% of checking acquisition offers mentioned free checking. For the same period in 2011, that number dropped to 29%.

“It’s clearly been a tough year for banks, but the answer doesn’t lie in charging customers for things that the bank wants them to do anyway—like using their debit card,” adds Susan Wolfe. “A better idea would be offering new products and services they wouldn’t mind paying extra for: personal financial management tools, coupons and discounts offered through the online banking system, these are untapped markets that customers would respond to, and wouldn’t mind being charged for.”

Hear more from Susan Wolfe on this topic here.

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