Credit, ATM and membership cards top the list of Americans' most widely
used plastic cards, with debit and other types of prepaid cards poised
for major growth, according to results from Standard Register's National
Consumer Survey of Plastic Card Usage. The research found the following
percentages of adult usage: credit cards, 89 percent; ATM cards, 61
percent; membership cards, 59 percent; debit cards, 37 percent; prepaid
cards, 33 percent; prepaid phone cards, 29 percent; loyalty cards, 25
percent; and smart cards, 5 percent.
Standard Register commissioned the telephone survey of 1,202 randomly
selected adults to determine consumers' awareness, opinions and usage
of plastic cards. The survey was conducted in conjunction with Card
Marketing.
"The survey reinforces our expectation that usage of debit cards
(linked to bank accounts), gift and other types of prepaid cards will
increase significantly over the next two years," says Susan Kraus,
marketing manager, Imaging Services Group, Standard Register. "With
results showing the number of people aware of debit and prepaid cards
is more than double the percentage of those actually using them, there's
tremendous potential to increase usage by educating consumers about
the financial benefits, ease of use and other advantages of debit and
prepaid cards."
Half of the adults (50 percent) reported regularly carrying one to
three plastic cards on a regular basis, while 30 percent say they usually
carry four to six. However, the survey indicated that the number of
cards people actually have used is significantly higher.
"Consumers reporting that they carry such small numbers of cards
was a key finding of the survey," says Kraus. "It points out
that people think only of those cards they use on a regular basis, such
as credit and ATM, which indicates that other types of cards are being
underutilized. Card issuers can increase their overall effectiveness
and consumer awareness by linking more benefits directly to card usage."
Prepaid and Debit Cards
Prepaid phone cards rank number one among cards for prepaid services
and have been used by 29 percent of Americans. Slightly more than one-half
(52 percent) of people who use prepaid phone cards report using them
while traveling. Compared to a three-minute call made via payphone,
traditional calling card, collect or person-to-person, prepaid cards
can save travelers between a dollar and as much as five dollars per
minute on long-distance calls. Other situations cited by prepaid phone
cards users include placing long distance calls from home (20 percent)
and making calls from a payphone (16 percent).
"As the survey makes clear, prepaid phone cards offer tremendous
potential for consumer growth and acceptance," says Kraus. "By
2002, approximately ten years after prepaid phone cards were introduced
domestically, we expect consumer usage to be above 50 percent. Retailers
and promotional marketers will drive growth by issuing prepaid cards
for promotional giveaways, sales incentives, survey tools and a host
of other special purposes."
Other services for which people use prepaid cards include gasoline,
cellular service and Internet services. Approximately a quarter of consumers
reported giving or receiving a prepaid card as a gift (25 and 29 percent,
respectively), with prepaid phone cards cited as the most frequently
given or received card. "Gift cards issued by retailers represent
another opportunity for growth of prepaid cards," says Kraus.
"Gift cards are convenient alternatives to paper gift certificates.
They can be used more than once, which means the recipient can shop
at a store until the specified dollar amount has been spent. Retailers
appreciate that all of the money on a card is spent in their store,
and we look for the number of retailers issuing gift cards to increase
significantly in 1999."
Debit cards tied to checking accounts, introduced by banks over the
last two years, are used by 37 percent of adults. Debit functions are
available as stand-alone cards or included on an ATM card. Forty percent
of consumers who own debit cards use them more frequently than their
ATM card, 33 percent use debit cards less often than ATM cards, and
21 percent use the two types of cards about the same.
Smart Cards
Smart cards, or plastic cards embedded with a microprocessor chip for
multi-functions, continue to have low levels of usage (5 percent) and
awareness (25 percent) among consumers, the survey shows. Even after
consumers were given an explanation, only 28 percent reported having
heard of smart cards.
The survey revealed one of the key reasons smart cards haven't caught
on in the U.S. - 64 percent of consumers reported having no interest
in a card that combined frequent flyer or other loyalty benefits, credit
and debit functions, medical information or other features on one card.
Of those who would be interested in such a card, medical alert information
was given as the most important service feature (29 percent).
Loyalty Cards
Used by 25 percent of Americans, 36 percent of loyalty cards owners
report shopping more often at stores where they participate in a loyalty
program. In addition, the influence of a loyalty card on shopping preference
was most evident with younger consumers.
Methodology
A total of 1,202 telephone interviews with consumers throughout the
U.S. were conducted during the first two weeks of March, 1999. The interviews
were collected using a "National Probability Sample," which
allowed the results to be projected at the 95 percent confidence level
with an error of only plus or minus 3 percent.
The interviews were introduced as public opinion polls about plastic
cards that many people carry. Respondents were asked a series of questions
on plastic card awareness and usage. In the course of the interviews,
Standard Register was not identified as the sponsor of the study. For
more information on the survey and detailed results, go to www.standardregister.com/products/cardsurvey.