December 14, 2010

Consumers heavily favouring debit and credit cards

Ipsos study examines payment preferences

Consumers have more ways to pay than ever before, but how are they paying for their purchases? A new study from Ipsos looks into the subject.

The Ipsos Payment Methods Report is the result of a groundbreaking study exploring the factors and drivers influencing payment method choice, preferences exhibited by different market segments, and loyalty to card brands and issuers.

The study examines the way Canadian credit card holders use cash, debit and credit cards for over-the-counter purchases. Results from the study show that about one-in-three cardholders (34%) say they are heavy debit card users, using it more than cash and credit cards combined. One-in-four (25%) use credit cards more than the other methods of payment combined. Only one-in-ten prefer to pay with cash. The remainder (28%) use a more even mix of methods for personal spending.

Heavy credit card users use credit cards twice as much as the average cardholder, both in terms of frequency and dollar value. They tend to replace the debit card with the credit card, using it for a greater variety of purchases including grocery shopping and small purchases – categories that are traditionally associated with cash and debit.

“This indicates growth potential for credit card use,” says John Mohler, Associate Vice President with Ipsos in Toronto. “While many consumers have concerns about credit card use related to money management or spending control issues, a minority see credit cards as tools to manage spending and save money in the long run. As well, credit card issuers have not yet fully tapped the grocery spending segment – an area that is not necessarily impenetrable.”