Debit "Companion Card Account" Key to Seeing Debit Transaction Growth

By Susan Abbott, Managing Director

Debit card preference, after winning the day in the first decade of the century for driving bank revenue, is now losing ground.  Why?  Because concern over shopping online, the fastest growing area of retail sales, and in-store purchases, the largest area of retail sales, are considered risky places to use the debit card. Finally, Millennials like using cards to better budget and plan, with those making over $100k the heaviest users of prepaid debit, according to research by the FRB Philadelphia.  These trends, along with the expansion of alternative payment methods like PayPal that settle to our industry accounts as “no revenue” debit ACH, has bankers scrambling for ways to stop the revenue leakage as shown by TSYS 2015 Debit Preference Research.

                                                    Source:  TSYS 2015 US Consumer Payment Choice Study

Enter the “companion” debit card in use by a growing number of banks.  Users of prepaid cards (70% or more are “banked” customers) and alternative methods (think PayPal, Target Red Card and others) use these methods to segment their spending.  The companion debit card solution, a second debit-only checking accounts, offers consumers transaction segmentation methods and spending control, and revenue protection for the bank.  The customer simply “loads” and unloads the card checking account through online banking.  When not in use, funds are not at risk if the card is compromised. Best of all, getting funds back from the card accounts is far easier that using prepaid or PayPal.  And, it is simply a checking account on your system with a monthly fee that helps grow your transaction revenue by keeping more transactions.

There is no time to lose – Google predicts the holiday season this year will be the most connected holiday shopping season ever.   Check out our PaySound Payment Card solution today!