U.S. Visa debit volume exceeds credit

Visa Inc. has announced that spending on Visa debit cards in the U.S. has surpassed credit for the first time in the company's history. For the period ending December 31, 2008, debit payments volume was $206 billion, compared with credit payments volume of $203 billion. Debit transactions were nearly 70% of U.S. transactions for the same time period, representing an increasingly larger portion of Visa's U.S. transactions. Consumers are increasingly turning to debit cards for non-discretionary purchases, or everyday spending. As of March 2009, approximately 52 % of debit volume was for non-discretionary items like food and clothing in the U.S. Among the top categories for Visa debit usage include bill payment, gas, groceries and quick service restaurants. Moreover, according to Visa research, consumers have a growing preference for using debit in new merchant categories where cash and check were once the preferred way to pay - like dry cleaners, gas/service stations, movie theaters and convenience stores. Within the U.S. marketplace, Visa's debit strategy has been to simplify card issuance and transaction processing for financial institution and merchant clients. Security enhancements like Zero Liability3 which protect consumers from unauthorized use, and merchant programs like no-signature required have also helped to increase the products' popularity among cardholders who have embraced this pay-now alternative. Bill Sheedy, President, North America, Visa, Inc. said: “In today's challenging economic environment, debit is an ideal way for consumers to access their own funds and focus on smarter spending, budgeting and control. The increased popularity of debit also provides our financial institution clients with an important tool that allows them to build strong and lasting relationships with their customers, while providing greater choice, security and convenience over less efficient forms of payment."