New Report Finds Third of Cardholders Open to Decoupled Debit Cards
BOSTON -- A report from the Aite Group LLC, a noted financial services consulting firm said that 33% of cardholders surveyed would be open to so-called "decoupled" debit cards.
Decoupled debit cards are issued by third-party vendors and debit the deposit accounts of cardholders via ACH transactions. Merchants and other non-financial institution issuers would favor them because they would benefit from card interchange while the financial institutions that hold the deposit accounts would have to pay the ACH fees.
The survey found that the cards would be most popular with what it called "reward addicts," tech-savvy and socially active consumers.
"These consumers are reward addicts with a tendency toward impulsive shopping and a propensity to use debit cards as a method of payment regular, monthly bills," the report said.
Aite surveyed 500 consumers in the wake of the news in 2007 that Capital One had plans to roll out a decoupled debit card option to their existing card base and then to the public at large.
Significantly, the higher percentage of consumers interested in the decoupled cards reported that the primary financial institutions were banks and not credit unions, Aite reported.
"The primary financial institution of interested consumers tends to be a large national bank more often than a credit union," Aite said. "Consumers interested in high reward decoupled debit cards are more often national bank customers and less often credit union customers than those not interested."
Additionally, the survey did not ask cardholders any conditional questions based on some of the problems critics have said are likely to occur with decoupled cards. The online questions did not include, for example, any questions about whether cardholders would still be interested in the decoupled cards if they knew that they would not have the same access to dispute resolution or ease of checking transactions that their financial institutions' cards offer.
A spokesman for Aite said the firm anticipated following up the survey with another that might include more detailed questions.