Faulkner & Gray, a division of Thomson
DEBIT CARD NEWS
April 27, 1998
LENGTH: 878 words
HEADLINE: As Debit Evolves, So Do The Words That Consumers Use To Name It
CORE TERMS: debit, Atm, Visa, offline, check, Mastermoney, Mastercard, plastic, suggest, online, POS, Katen, respondents, issuer, consumer survey, vice president, U.S.A, Bankboston, Pin, accustomed, promoting, deducted, describe, becoming, cited
BODY: Visa U.S.A. concluded in 1993 that many consumers associated the term "debit" with "debt," and changed the name of its offline debit product from Visa Debit to Visa check. MasterCard International came to a similar conclusion a year later, and replaced MasterCard Debit with MasterMoney.
But many consumers have become accustomed to using offline debit cards in the intervening years, as offline debit point-of-sale transactions increased nearly seven-fold from 279 million transactions in 1993 to 1.94 billion transactions in 1997.
And, regardless of how debit cards are marketed, many consumers now use the term "debit card," according to a recent survey for MasterCard.
But a new consumer survey by the San Diego-based Star electronic funds transfer network suggests that most consumers-at least in Star's core market of nine Western states-still prefer the term "ATM card" for the plastic that they use at automated teller machines and at the point of sale, with funds deducted from their bank accounts. The Star survey also suggests that, at least out West, the security of offline debit cards remains a major concern, a finding that appears to contradict national surveys.
The Star survey found that 61% of respondents call the card an ATM card, 9% a debit card, 5% a Visa check card and 1% a MasterMoney card, with others offering no response. Star surveyed consumers in California, Arizona, Nevada, Hawaii, Idaho, Utah, Colorado, Oregon and Washington in November 1997.
Those results suggest that issuers promoting debit cards should call the plastic "an ATM card with enhanced features," says Nikki Waters, Star executive vice president. "Don't try to rename it."
But not all agree. Irene Katen, a MasterCard vice president, points to a nationwide survey conducted for MasterCard Feb. 13-15, 1998, in which 37% of consumers used the term "debit card" to describe a card they can use at an ATM or for purchases, with money deducted from a bank account. The four other terms mentioned most often were check card 16%, ATM card 10%, bank card 6% and cash card 3%.
Other results in that survey point to a change in how cardholders think of the plastic, Katen says. She notes that when asked what term "completely" describes such a card, ATM card dropped from 43% in 1997 to 39% in 1998, while debit card jumped from 33% last year to 46% in 1998.
"Debit is becoming a household term," says Katen, who attributes that change to consumers using debit cards more often and seeing the term on POS terminals and in the media.
With that in mind, MasterCard increasingly uses the term "debit" in its promotional materials, along with such terms as "ATM card" and "MasterMoney card." "We use one or two descriptions in each communication," Katen says. "Using the term 'ATM card' is helpful in getting people in a checking account frame of mind.'"
Visa executives acknowledge that consumers understand the term "debit" now better than they did a few years ago, but continue to emphasize that the plastic is an ATM card with a Visa logo. "We use ATM card as a descriptor, and it seems to be working out for us," says Matthew B. Biespiel, director of advertising for Visa U.S.A.
The debate over terminology may be moot for many financial institutions that use a bank brand when promoting debit cards. Columbus, Ohio-based Banc One Corp calls its Visa check card "The One Card" and BankBoston, a MasterMoney issuer, calls its card "The BankBoston card."
Before its acquisition this year by Charlotte, N.C.-based NationsBank, Barnett Banks called its Visa check card "the SuperCard," its ATMs "Super Tellers" and planned to launch a "SuperNet" Internet banking product. "The 'Super' name was becoming a family of electronic services," says a bank executive.
Besides differing with national polls in terms of what consumers call debit cards, the Star survey also indicates a far greater concern over the safety of offline debit cards.
Star found that respondents use online debit cards, which require entry of a personal identification number, twice as often as offline cards at the point of sale, 4.4 times per month for online to 2.2 for offline. That is quite different than the national picture, where the 1.94 billion transactions initiated with offline Visa check and MasterMoney cards in 1997 outpaced the approximately 1.5 billion online POS transactions.
Sixty-two percent of Star's respondents said they preferred PIN-based to signature-based debit, with fraud protection cited as the most common benefit. By contrast, a national consumer survey by Tampa, Fla.-based PSI Global does not turn up security among the 13 most commonly cited reasons for not using POS debit.
Survey results can hinge on how questions are asked. But some California issuers say they, too, find that security is on the minds of their customers, some of whom suggest that PINs be added to credit cards, says Eric W. Bell, vice president, Irwindale, Calif.-based Home Savings of America.
"Online debit was going like gangbusters out West for five to seven years before most other parts of the country picked up on it," Bell says. "So people got accustomed to using their PIN."
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