Cyber Security

Debit use increases despite growing threat of data breaches

Cyber SecurityA recent study commissioned by the PULSE EFT Network showed that despite recent and well-publicized data breaches at major retailers, the performance of debit card programs improved in 2013.

According to the study, consumers have increasingly turned to electronic payments—the number of transactions per card increased to 20 from approximately 19 in 2012.

Debit card use increased last year, despite an uptick in cybercrime. The study found that 14 percent of all debit cards were exposed to data breaches last year.

As a result of security concerns, many issuers have since opted to implement EMV, a standard that is considered more secure than traditional magnetic stripe cards. According to the study, 86 percent of financial institutions said they plan to issue EMV cards within the next two years—compared to 50 percent in 2012.

Additionally, PULSE said that as consumers move away from cash payments to electronic payments, ATM use will decline. Last year, the study showed, ATM withdrawals fell to a study-wide low of 2.3 per card per month. While large banks expect ATM transactions to continue to decline, smaller institutions expect increased ATM transaction volume as they push traffic from branches to ATMs.

The study, which was conducted by Oliver Wyman, is the ninth installment in the study series. Seventy-one financial institutions, of which 29 have at least $10 billion in assets and are subject to the interchange cap, participated in the study.

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