PULSE study: Surcharge-free access on the rise

HOUSTON (8/19/08)--Surcharge-free ATM access is becoming more popular among debit card issuers, according to the PULSE 2008 Debit Issuer Study.

Sixty-two financial institutions, including credit unions, participated in the study. The institutions issue a combined 74 million debit cards, or 28% of all U.S. debit cards.

About 56% of survey respondents said they participate in a surcharge-free ATM network. Also, 84% of credit union respondents offer surcharge-free service to their members for certain "off-us" transactions, or transactions conducted at ATMs owned by other organizations.

The study also indicated:

• ATM transaction activity is increasingly "on-us," which means that cardholders are using issuers' ATMs, limiting surcharges;

• Active debit cardholders conduct 3.4 transactions per month; and

• Heavy ATM users are also heavy debit card users, implying that cardholders do not use the "cash back" option often.

About 51% of respondents said they offer rewards programs, compared with 37% in 2006. Of those, 42% offer debit rewards programs, compared with 16% in 2006. Points-based rewards are the most common program type.

Prepaid cards are gaining popularity, the survey said. About 61% of respondents said they offer the cards, with 16% looking to offer the cards in the future.

The survey also addressed growth challenges, such as:

• Contactless cards--10% of respondents offer the cards, but only 24% of their cardholders use the technology. Key barriers to contactless adoption include merchant acceptance, unfavorable cost/benefit ratios and low demand;

• Mobile banking--15% of respondents support mobile banking, while 28% said they will offer it soon; and

• Mobile payments--56% of issuers said they are exploring the possibility of implementing this feature.

PULSE, an ATM/debit network, serves more than 4,500 financial institutions, including credit unions, nationwide.

Resource Links

RBS Lynk/CUNA Strategic Service