HOUSTON– A new survey reveals to what degree consumer demand for digital experiences, mobile self-service capabilities and fraud management is commanding the attention of financial institutions.
The findings were released as part of the 2023 PULSE Debit Issuer Study, commissioned by Discover Financial Services’ PULSE debit network and conducted by West Monroe.
PULSE reported that following the volatility experienced during the pandemic, issuers reported slight growth in the total number of debit transactions, up 1% year-over-year (YoY) in 2022, while dollar volume increased 3%.
Among the findings:
Payment Trends that Surged Have Endured
Nearly 80% of issuers reported seeing increased use of mobile wallets in 2022, and mobile wallet transactions at the point-of-sale rose more than 87% YoY, according to PULSE.
“Increased mobile wallet use is being fueled by greater consumer awareness and merchant adoption of NFC-enabled payment terminals. Meanwhile, the sharp growth over the past two years in account-to-account (A2A) transactions, which include peer-to-peer payments, business-to-consumer disbursements and gig-economy wage payments, moderated in 2022 with a 6% YoY increase,” the company said.
Meeting Consumer Demand for Mobile Capabilities
With consumers favoring seamless digital experiences and mobile capabilities, PULSE said issuers are seeking to keep pace by prioritizing customer experience.
“More than one-third of respondents (35%) reported accelerating the rollout of new digital capabilities in 2022, with an emphasis on self-service features,” the company said. “Many issuers are investing in a broad range of mobile-app capabilities that allow consumers to perform functions such as ordering, activating, freezing or unfreezing a debit card.”
Fraud Management is Top Concern
When asked about trends impacting their debit programs, key focus areas and priority investments, fraud management emerged as issuers’ top concern in 2022, PULSE reported.
“Nearly 90% of issuers reported increased attention on fraud issues, and nearly 45% said fraud initiatives were high-impact,” The company said. “Three-quarters of respondents (76%) reported they enhanced their fraud models to reduce fraud losses and false positives, which negatively impact cardholders. Four out of 10 said they are working to improve the cardholder-dispute experience.”
Steady Year-Over-Year Performance
The 2023 Debit Issuer Study found modest improvement in debit key performance indicators from 2021 to 2022, according to PULSE.
“Debit usage per active card remained flat YoY, at more than 29 transactions per month,” PULSE reported. “Debit penetration rates rose marginally to 84.5% of accounts (up 0.2%), and the active rate (the percentage of issuers’ debit cards used regularly) increased slightly to 68.6% (up 1.2%). The average debit ticket increased 2.4% to $48.49 per transaction, likely due to inflation.”
For additional info: PULSE Debit Issuer Study
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