DENVER - The 2006/2007 Consumer Payments Usage and Segmentation Study, released by First Data's Star Network, includes a segmentation analysis of specific market groups based on their payment tendencies at the point of sale. The six segments found in the research include the signature-debit, PIN-debit, cash/PIN debit, cash, check and credit card segments.
According to the study, the segments - determined by an analysis of payment behavior, demographics, attitudinal characteristics, payment preference and value-based characteristics - provide a new way to look at the point of sale payments landscape. "Segmentation is the key to capitalizing on different customer needs. Each customer segment is driven by distinct, identifiable tendencies, and an understanding of these behaviors can help financial institutions develop more effective strategies to maximize the value of customer relationships by converting cash and check payments to electronic form," said Todd Strubbe, president of First Data's debit business. "The segments also exhibit different product and communications preferences, which can be used to make targeted product packaging and marketing activities more efficient and effective." When asked the reasons behind choosing one form of payment over another, consumers rated security as the most important attribute for any payment method, followed by control over money, fee avoidance, and ease of use. The survey data also points to the continued growth of debit activity at the point of sale. Over the past five years, consumers' average PIN-secured debit point-of-sale activity has grown from nine transactions per month to 11. The average total number of signature debit point of sale transactions made monthly has increased 38 percent in the last year, from 13 to 18 transactions per month. The majority of debit cardholders tend to use both PIN-secured and signature debit, rather than one method exclusively. Providing the option to make payments using both PIN-secured and signature debit increases the number of potential transactions those consumers make monthly, according to the survey.
The survey also found that the debit card has the second-highest preference for smaller purchases, with preference rising steeply and making it the most preferred payment method for purchases between $25 and $50.
Overall findings
- 88 percent of consumers have checking accounts
- 72 percent have ATM/debit cards
- 85 percent used their ATM/debit cards at an ATM or at the point of sale in the 30 days prior to the survey 70 percent reported using their debit cards to pay for goods and services in the 30 days prior to the survey
The survey, conducted by TNS Custom Research Inc., includes responses from more than 3,500 consumers in all census.
