Nilson Reports 20-Year First: Credit Tops Debit
The Nilson Report, a noted payments industry newsletter, has reported that debit cards lost purchase volume and transactions to credit cards in 2012.
This seemingly small shift, if accurately calculated, would reverse a 20-year trend which has seen debit cards continue to take purchase volume and transactions away from credit cards, along with checks and cash.
The Carpinteria, Calif., firm, did not cite the source for the data it reported in its statement on Monday.
According to the company, credit cards accounted for 52.82% of spending in 2012 compared to 47.18% for debit cards, while in 2011 credit cards accounted for 52.63% and debit cards accounted for 47.37% of $4.301 trillion in purchase volume.
The firm also forecast the trend continuing, suggesting that by 2017, 54.72% of transaction volume would go to credit cards and 45.28% to debit cards.
“There is a finite amount of money in deposit accounts owned by consumers,” said David Robertson, publisher of The Nilson Report, offering a reason for the shift. “Credit cards are different. Because they can borrow money and pay it back over time, they can spend more on credit than they have in their own accounts.”