MasterCard Survey: Rejecting Debit Could Hurt Sales

Just weeks after Wal-Mart Stores Inc. informed MasterCard International Inc. that the chain would stop accepting MasterCard debit cards effective next month, the bank card company has released a consumer survey showing that merchants who reject debit cards risk losing sales. Sponsored by MasterCard and conducted by Harris Interactive, best known for its Harris Poll, the survey showed that 63% of respondents would form a lower opinion of a retailer that stopped taking debit cards, and 51% would think about leaving a store without buying if debit cards were not accepted. At the same time, 82% of debit card users cited convenience and security as important advantages of the cards when compared to cash; 77% cited the cards' transaction speed at checkout; 79% said the cards are easier to use than writing a check; and 84% of the card users who also shop online said it is important to them that the cards be accepted at Internet sites. The survey did not distinguish between debit cards requiring a personal identification number and those on which cardholders provide a signature. The survey results underscore recent statistics showing the rapid gains made by debit cards at the point of sale. A recent Dove Consulting research study done in conjunction with the American Bankers Association, for example, revealed that debit cards are almost single-handedly propelling the conversion of retail transactions from cash and checks to electronic alternatives. These results, released last month, showed that the share of in-store payments claimed by debit cards had climbed to 31% from 21% four years ago, while the share of payments on credit cards had remained constant and that on cash and checks had plunged from 57% to 47%. The MasterCard/Harris survey also serves as a note of caution to merchants who may be weighing whether to continue accepting debit cards now that last year's settlement of a major anti-trust lawsuit has given them leeway to accept Visa and MasterCard credit cards without also taking the bank networks' debit products. The first retailer to take advantage of this freedom was Wal-Mart, which last month announced it would cease acceptance of MasterCard's signature-based debit cards effective Feb. 1 because of their transaction costs. Wal-Mart had been a lead plaintiff in the lawsuit against Visa and MasterCard over their longstanding requirement tying together credit and debit acceptance. The MasterCard/Harris survey was conducted Dec. 3-5 and included a sample of 2,465 adults scattered across the country; of these, 1,476 were debit card users. Harris says the results were “weighted to be representative of the total U.S. adult population.”