Security Issues Lead Young Adults And High Earners to Look Askance at Debit Cards

Young adults and high earners have something in common. Both consumer groups are less likely than consumers overall to use debit cards, according to a report released Tuesday by Mercator Advisory Group Inc.

The report, “Consumers and Debit in the U.S.: Heightened Security Concerns,” canvassed more than 3,000 U.S. adults about their debit card use and concerns. It found that debit card use among households earning more than $100,000 annually is 52%; among young adults, it is 56%. Both usage rates are less than the overall average of 59%.

“Young adults have shied away from debit cards,” Karen Augustine, manager of primary data services at Maynard, Mass.-based Mercator, tells Digital Transactions News. “They’ve demonstrated much greater interest in security issues.”

While 42% of all consumers were interested in mobile account controls for their debit cards, that spiked to 55% for the 18-to-34-year-old segment. That’s an increase from 48% in 2014. Such controls enable consumers to suspend transaction activity on their debit cards for a specified period of time in cases where the card is lost or stolen.

That may be, in part, because of young consumers’ greater use of mobile devices and online commerce, Augustine says. “Young adults, especially, are focused on using their phones for shopping and using their phones for payments more and more,” she says.

Debit card issuers offering such services might get more consumers to activate and use their cards, Augustine says. Consumers who have debit cards but choose not to use them—comprising 51% of survey respondents—are more likely than debit card users to be attracted to such mobile-based account controls. Enhancing the perceived security of debit cards could boost non-user activations, the report concludes.

Security concerns regarding debit card use have increased lately, Augustine says. “It used to be not as important,” Augustine says. But consumers are contending with breaches as well as much more fraud being recognized and seen online, she says. “They’re far more interested in security issues and they’re even willing to pay for it,” Augustine notes.

Indeed, more than half of respondents would be willing to pay for enhanced security features, the survey found.