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Debit Cards in the U.S., 2nd Edition


Attention: There is an updated edition available for this report.

As the market for consumer credit cards grows increasingly saturated and competitive, and as consumers in the U.S. begin to bring their stratospheric rates of credit card use under control, financial institutions are scrambling to make up for lost revenue with other consumer payment products. After years in the shadow of credit, debit cards have truly broken out—evolving from bare-bones tools to become the feature- and reward-laden payment method of choice for millions of Americans. Merchant acceptance of debit cards has grown at a rapid rate, making consumers increasingly willing and able to abandon paper checks, and even cash itself, for the convenience of debit. Yet for debit card issuers and other market players, profit and success can be harder to come by and to quantify than in the credit realm. A half-dozen variable fees change hands behind the scenes of every debit transaction; merchants have grown increasingly litigious over interchange and discount rates; and issuers are struggling to maintain profits in order to fund highly desirable rewards programs.

This Packaged Facts report focuses on the U.S. market for debit cards, which surged past $800 billion in signature- and PIN-based transaction volume in 2005 and is on track to exceed U.S. credit volume in the very near future. The report provides an overview of the major market players; a survey of recent and ongoing litigation and regulation of the market; data on online and offline debit transactions, including market growth since 2001 and projections through 2010; and market share of major issuers, as well as leading growth and marketing trends and an examination of their latest debit products and technology. Competitive profiles of the major card associations and top debit card issuers provide added insight into their recent activity and future plans, while data from Simmons Market Research Bureau paints a picture of both adult and teen card users, from demographics to opinions to card usage rates.

Report Methodology
The information in Debit Cards in the U.S. is based on both primary and secondary research. Primary research involved interviews with marketing, public relations and industry analysts within the banking, retail and credit card markets and consultants to the industry. Secondary research entailed data-gathering from relevant trade, business, and government sources, including company literature, annual reports and 10(k) filings, and data from databases such as CardSource.

What You’ll Get in this Report
Debit Cards in the U.S. makes important predictions and recommendations regarding the future of this market, and pinpoints ways current and prospective players can capitalize on current trends and spearhead new ones. No other market research report provides both the comprehensive analysis and extensive data that Debit Cards in the U.S. offers.

Plus, you’ll benefit from extensive data, presented in easy-to-read and practical charts, tables and graphs.

How You Will Benefit from this Report
If your company is already doing business in the debit market, or is considering making the leap, you will find this report invaluable, as it provides a comprehensive package of information and insight not offered in any other single source. You will gain a thorough understanding of the current market for debit cards, as well as projected markets and trends through 2010.

This report will help:

  • Marketing Managers identify market opportunities and develop targeted promotion plans for debit cards.
  • Research and development professionals stay on top of competitor initiatives and explore demand for debit cards.
  • Advertising agencies working with clients in the banking and retail industries understand the product buyer to develop messages and images that compel consumers to use debit cards.
  • Business development executives understand the dynamics of the market and identify possible partnerships.
  • Information and research center librarians provide market researchers, brand and product managers and other colleagues with the vital information they need to do their jobs more effectively.


  • Executive Summary
    • Scope and Methodology
      • Scope of Report
      • Report Methodology
    • Introduction
      • A Fast-Growing Market
      • Terms and Players
      • Online vs. Offline Debit
      • The Interchange Wars
    • The Market
      • Debit Closes in on Credit Volume
      • More Than 22 Billion Transactions in 2005
      • Convenience In-Store and Online
      • Increased Penetration Among Young Consumers
      • Debit Popular for Largest and Smallest Transactions
      • New Technology Wins Debit Converts
      • Projected Market Growth
    • Competitive Overview
      • Bank of America Conquers Debit Arena
      • Slow Growth for Smaller Issuers in Signature
      • Interlink Pulls Ahead in EFT
      • Discover Breaks Into Signature Debit
      • Innovation in Rewards Programs
      • Convincing Cardholders to Sign on the Line…
    • The Consumer
      • Half of U.S. Adults Have a Debit Card
      • Two-Thirds of Debit Cardholders Are Age 25-54
      • Attitudes Suggest Lack of Fiscal Confidence Among MasterCard, Visa Owners
    • Looking Ahead
      • Rewards the Next Big Frontier
      • Prepaid Debit Poised to Break Out
      • Are Consumers Ready to Swipe Their Cell Phones?
      • More Flexibility for the Consumer
      • Behind the Scenes: Trends in Fees and Processing
  • Chapter Introduction - Highlights
  • Introduction
    • Products and Players
      • A Fast-Growing Market
      • Terms and Players
    • Behind the Scenes
      • Debit Cards and Profitability
      • Online vs. Offline Debit
      • The Interchange Wars
      • EFT, Acquirers, and Consolidation
      • Investigating Phishing and Data Theft
  • Chapter The Market - Highlights
  • The Market
    • Market Size and Growth
      • Note on Methodology
      • Debit Closes in on Credit Volume
        • Table U.S. Market for Debit Cards, 2001-2005 (in billions of dollars)
        • Table Offline vs. Online Transaction Volume, 2001-2005 (in billions of dollars)
        • Table Value of Electronic Credit and Debit Payments, 2000 and 2003 (in millions)
      • More Than 22 Billion Transactions in 2005
        • Table U.S. Debit Card Transactions by Category, 2001-2005 (in billions of transactions)
      • Debit Is Preferred by Majority of Consumers
        • Table Estimated Number of Debit Cards in Circulation, 2001- 2005 (in millions)
    • Factors to Market Growth
      • Convenience In-Store and Online
      • Increased Penetration Among Young Consumers
      • Debit Popular for Largest and Smallest Transactions
      • New Technology Wins Debit Converts
    • Projected Market Growth
      • A New World: Debit Outpaces Credit
        • Table Projected U.S. Market for Debit Cards by Category, 2005-2010 (in billions of dollars)
      • Debit Defines Purchasing in America
        • Table Projected U.S. Debit Card Transactions by Category, 2005-2010 (in billions of transactions)
  • Chapter Competitive Overview - Highlights
  • Competitive Overview
    • Market Leaders and Consolidation
      • Bank of America Conquers Debit Arena
        • Table Leading Debit Card Issuers: Estimated Number of Cards, Transaction Volume, and Market Share, 2001
        • Table Leading Debit Card Issuers: Estimated Number of Cards, Transaction Volume, and Market Share, 2005
      • Slow Growth for Smaller Issuers in Signature
      • Interlink Pulls Ahead in EFT
        • Table Leading U.S. Merchant Acquirers by Transactions Processed, 2005 (in millions)
        • Table Leading U.S. EFT Networks by Point-of-Sale Transactions, 2005 (in millions)
    • Marketing and New Product Trends
      • Cross-Pollination Between Debit and Credit Markets
      • Innovation in Rewards Programs
      • Convincing Cardholders to Sign on the Line…
      • …But Allowing Them to Punch In a PIN
      • The Evolution of Debit: Payroll, Travel, Tax Cards
      • High-Tech, But Low Penetration?
        • Table Selected Debit Card Issuers and Debit Card Products and Programs, 2004-05
  • Chapter Competitor Profiles - Highlights
  • Competitor Profiles
    • Competitor Profile: Visa
      • Debit Originator and Innovator
      • More Than Credit in the 21st Century
      • Increasing Control Over Debit at all Levels
      • Advances in Authorization
      • Entering the Booming HSA Market
    • Competitor Profile: MasterCard
      • Debit Outpacing Credit
      • Surcharge-Free ATMs
      • Core Debit Card Lineup
    • Competitor Profile: Discover
      • Discover Breaks Into Tight Market
      • Entering Health Care Card Market
      • An About-Face on Fees
    • Competitor Profile: Bank of America
      • Overview
      • Letting Consumers "Keep the Change"
      • SafeSend Drops the Cards
    • Competitor Profile: Wells Fargo Bank
      • Number Two in Debit Market
    • Competitor Profile: Wachovia Bank
      • Overview
      • Cross-Marketing: Debit/Student ID Hybrids
    • Competitor Profile: Washington Mutual Bank
      • Overview
      • New Debit Rebate Program and Movement to MasterCard
    • Competitor Profile: J.P. Morgan Chase & Co.
      • Overview
      • Pushing New Products: Payroll and Tax Refund Cards
      • Short-Lived Deal for Katrina Survivors
    • Competitor Profile: U.S. Bank
      • Overview
      • Pioneering Health Savings Account Debit Cards
      • New Service Campaign in 2006
    • Competitor Profile: Citibank
      • Credit Giant Lags Behind in Debit
      • Dealing with First Data
      • ThankYou Network Sets the Standard
      • Massive PayPass Expansion
    • Competitor Profile: Fifth Third Bank
      • Overview
      • Processing Solutions Division Acquires CMC
  • Chapter The Consumer - Highlights
  • The Debit Card Consumer
    • Adult Demographics and Opinions
      • Methodology
      • Half of U.S. Adults Have a Debit Card
      • Two-Thirds of Debit Cardholders Are Age 25-54
      • Hispanics Low in Ownership, Usage Rates
      • Pacific Is Top Region by Overall Penetration
      • Ownership Tendency Higher Among the Better Educated
      • Upward Skew by Household Income
      • Ownership/Usage Patterns by Household Type: Kids Signal Heavier Usage
      • Attitudes Suggest Lack of Fiscal Confidence Among MasterCard, Visa Owners
        • Table Debit Card Ownership Rates by Selected Demographic Characteristics, 2005 (U.S. adults)
        • Table Debit Card Ownership Indices by Selected Demographic Characteristics, 2005 (U.S. adults)
        • Table Debit Card Monthly Usage Rates by Selected Demographic Characteristics: MasterCard vs. Visa, 2005 (U.S. adults)
        • Table Debit Card Monthly Usage Indices by Selected Demographic Characteristics: MasterCard vs. Visa, 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I read the financial pages of my newspaper," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I shop for the best deal for financial services," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I'm no good at saving money," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I tend to spend money without thinking," 2005 (U.S. adults)
        • Table Indices by Credit Card Classification for Agreement with Statement: "I don't like the idea of being in debt," 2005 (U.S. adults)
    • Teen Demographics and Opinions
      • ATM Card Usage and Attitudes About Money
        • Table Teen Opinions Regarding Finances: Overall vs. ATM Card Owners, 2005 (percent of U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "I am good at saving money," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "I spend money without thinking," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "I am very careful with my money," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "I like to save my money at home," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "I don't like the idea of being in debt," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "Credit cards are a way of getting into debt," 2005 (U.S. teens)
        • Table Indices by ATM Card Ownership and Usage for Agreement with Statement: "Credit cards make shopping easier," 2005 (U.S. teens)
  • Chapter Looking Ahead - Highlights
  • Looking Ahead
    • Trends and Opportunities
      • Rewards the Next Big Frontier
      • Prepaid Debit Poised to Break Out
      • Are Consumers Ready to Swipe Their Cell Phones?
      • More Flexibility for the Consumer
      • Behind the Scenes: Trends in Fees and Processing
  • Addresses of Selected Marketers

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