WASHINGTON (7/8/11)--A consumer survey has revealed that debit cards are the most popular form of payment at retail points of sale (POS), and checks are “largely a thing of the past” to most consumers, according to payment services firm TSYS. The TSYS survey questioned more than 1,000 debit card users on their card usage, payment preference, and interest in debit card account perks. The survey found that cash was the main fallback for consumers who did not use their debit cards, and the study found that consumers would “reduce or completely stop using their debit cards if they were charged fees.” However, consumers would be more interested in debit card services if they were offered “instant-issue” cards and increased online personal identification number (PIN) security. Adding or increasing debit account fees may be unavoidable for some credit unions when the Federal Reserve’s debit interchange rule comes into effect later this year. The Fed’s final interchange rule, which was approved by a 4 to 1 vote late last month, would cap large issuer debit interchange fees at 21 cents, to cover network connectivity, hardware, software and labor costs, as well as costs related to network processing and transaction monitoring. An additional five basis points per transaction may be charged to cover fraud losses. A separate interim final rule proposed would allow an additional penny to be charged if financial institutions are in compliance with Fed established fraud prevention standards. Debit card issuers with less than $10 billion in assets, prepaid cards, and government-issued cards are exempt from the cap provisions. The Fed will be required to report on the interchange cap’s impact on small-issuer interchange fee income and whether merchants are discriminating against small issuers that are still able to charge more for debit card purchases.