Credit, Debit and Prepaid Cards Industry Update:                A 2011 Study of Payment Trends                       and M...
Who We Are       • Comprehensive                                    • Leading U.S. PIN-                                   ...
How We Got HereNAFCU Services Preferred Partner –   Expertise and innovation in credit, debit, and prepaid solutions –   C...
High Gas Prices                                                                                                      High ...
Consumer Confidence Versus                        Food, Gas and Unemployment145135125115105 95 85 75                      ...
Today’s AgendaCredit Usage – Credit – Debit and Prepaid UsageConsumer and Member Interest – Mobile: Banking, Payments and ...
Credit Usage                                     7©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distr...
How Members Use Their Cards                                                                          Credit Union         ...
How Members Use Their Cards                                                                         Long term             ...
How Members Use Their Cards                                            Revolver -- Usually Pay                            ...
How Members Use Their Cards                                 I am Currently Paying Down a Balance                          ...
Polling Question                                          12     ©2011 DFS Services LLC Confidential and Proprietary Do No...
How Members Use Their Cards                                    Opened a New Credit Card Account                           ...
How Members Use Their Cards                                                                                               ...
How Members Use Their Cards                                                                                               ...
How Members Use Their Cards                                                                                    Grocery Spe...
How Members Use Their Cards                                                                                Gas Spend  46% ...
How Members Use Their Cards                                                            Dining Out Spend  45%  40%  35%  30...
How Members Use Their Cards                                                   Routine Household Purchases  50%  45%  40%  ...
How Members Use Their Cards                                                       Major Household Purchases 80% 70% 60% 50...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webina...
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Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webinar Slides

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What do the latest consumer card trends mean for your credit union? In this webinar we uncover the key findings from Discover’s second annual study on member card payment preferences and credit, debit and prepaid card market trends. Most importantly, we discuss how to use this valuable data to deliver well-executed programs, innovative tools and member-focused services that drive interest, adoption and usage within your member base. More info at http://www.nafcu.org/discover

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Credit, Debit and Prepaid Cards Industry Update: 2011 Study of Payment Trends and Member Preferences - Credit Union Webinar Slides

  1. 1. Credit, Debit and Prepaid Cards Industry Update: A 2011 Study of Payment Trends and Member Preferences Kevin O’Donnell, Vice President Discover Financial Services 1 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  2. 2. Who We Are • Comprehensive • Leading U.S. PIN- • Global brand known for payments solution based ATM/debit service, rewards, and including credit, debit network with 4,400+ cardholder benefits and prepaid participating financial • In over 185 • $103 billion in volume institutions countries/territories • 30+ Issuers • All top national PIN • Millions of premium debit retailers accept • Signed agreements with consumer and corporate PULSE 126+ merchant cardmembers acquirers representing • Over 780K ATMs and many who travel to U.S 98% of U.S. merchants cash access locations • $27 billion in volume worldwide • Enabled over 1 million • 50 franchises previous non-acceptors • $118 billion in volume 2Note: Volume based on the trailing four quarters ending 1Q11 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  3. 3. How We Got HereNAFCU Services Preferred Partner – Expertise and innovation in credit, debit, and prepaid solutions – Collaborative, flexible approach – Known for customer service, rewards, and loyalty – Commitment to your brand and your members financial healthInvited to share our findings to help you understand the market andgrow your member base 3 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  4. 4. High Gas Prices High Gas PricesAs of June 20, 2011, the national average for a gallon Impact Consumer Impact Consumerof gas is $3.65 – up more than $0.92 from last year.1 Spending // Spending Sentiment Sentiment Price Spike – Libyan rebellion stops 1.5 million Summer Blend daily exports of crude3 Increases Cost Gas prices could surpass Oil Speculators the 2008 record level of Push Up Price $4.11 per gallon.3 Unrest in Analysts estimate oil and gas prices Middle East won’t stabilize until summer.2 4 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  5. 5. Consumer Confidence Versus Food, Gas and Unemployment145135125115105 95 85 75 Se N D Ja Fe M Ap M Ju Ju Au O Ja Fe M Ap ov ec ar ay ct ar p- n- n- l-1 n- b- b- r- g- r- -1 -1 -1 - - 10 10 - 10 11 11 10 11 11 10 10 10 0 10 0 0 0 CPI:Food Avg Regular $/Gal Consumer Confidence Unemployment 5Source: U.S. Bureau of Labor Statistics, U.S. Department of Energy and The Confidence Board ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  6. 6. Today’s AgendaCredit Usage – Credit – Debit and Prepaid UsageConsumer and Member Interest – Mobile: Banking, Payments and Couponing – Merchant Funded RewardsSolutions for Credit Unions – Gen Y Targeting and OfferingsKey Takeaways 6 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  7. 7. Credit Usage 7©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  8. 8. How Members Use Their Cards Credit Union member year- I Have Used One or More of My Major over-year use Credit Cards in the Past Six Months is increasing 96% 95% 94% 93% 92% 91% 90% 89% 88% 87% 86% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 07 08 09 10 11 12 01 02 03 04 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period CU: Average Non-CU: Average CU Non-CU 8Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  9. 9. How Members Use Their Cards Long term trend: CU Transactor -- Always/Almost Always members less Pay the Entire Balance likely to be transactors 58% 56% 54% 52% 50% 48% 46% 44% 42% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 07 08 09 10 11 12 01 02 03 04 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period CU: Average Non-CU: Average CU Non-CU 9Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  10. 10. How Members Use Their Cards Revolver -- Usually Pay Less Than the Entire Balance 54% 52% 50% 48% 46% 44% 42% 40% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 07 08 09 10 11 12 01 02 03 04 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period CU: Average Non-CU: Average CU Non-CU 10Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  11. 11. How Members Use Their Cards I am Currently Paying Down a Balance on One or More of My Major Credit Cards 58% 56% 54% 52% 50% 48% 46% 44% 42% 40% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 07 08 09 10 11 12 01 02 03 04 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period CU: Average Non-CU: Average CU Non-CU 11Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  12. 12. Polling Question 12 ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  13. 13. How Members Use Their Cards Opened a New Credit Card Account Keep product in the Past 3 Months offerings current and competitive 14% 12% 10% 8% 6% 4% 2% 0% 11 12 01 02 07 08 10 09 02 03 04 05 06 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 1- 0- 0- 0- 1- 0- 0- 0- 0- 0- 0- 0- 02 10 01 03 04 12 05 09 11 04 06 07 08 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 1 0 1 0 0 1 1 0 0 0 0 0 0 3-Month Period CU: Average Non-CU: Average CU Non-CU 13Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  14. 14. How Members Use Their Cards Credit Union I am Concerned About My Credit Card members fear Interest Rate Rising Over Time rising rates 56% 54% 52% 50% 48% 46% 44% 42% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 08 09 10 11 01 02 03 04 07 12 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 1 1 1 1 0 0 3-Month Period CU: Average Non-CU: Average CU Non-CU 14Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  15. 15. How Members Use Their Cards Sell on your I Dont Trust Any Credit Card advantages but Company to Treat Me Fairly know your competition 35% 30% 25% 20% 15% 10% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 0- 1- 1- 04 05 06 08 09 10 11 01 02 03 04 07 12 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 1 1 1 1 0 0 3-Month Period CU: Average Non-CU: Average CU Non-CU 15Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  16. 16. How Members Use Their Cards Grocery Spend 60% 50% 40% 30% 20% 10% 0% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 0 0 1 1 -0 -0 -0 -1 -0 -0 -0 -0 -1 -1 -0 -0 -0 9 0 1 1 4 5 8 2 6 7 2 3 4 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period Debit Avg Credit Avg Debit Credit Members continue to prefer debit for grocery by 50% to 30% 16Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  17. 17. How Members Use Their Cards Gas Spend 46% 44% 42% 40% 38% 36% 34% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 0 0 1 1 -0 -0 -0 -0 -1 -0 -0 -1 -1 -0 -0 -0 -0 9 5 0 4 8 6 7 1 2 1 2 3 4 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period Debit Avg Credit Avg Debit Credit No significant shifts in debit vs.. credit usage, even with higher gas prices 17Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  18. 18. How Members Use Their Cards Dining Out Spend 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 02 03 04 05 06 07 08 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 0 0 1 1 -0 -0 -0 -1 -0 -0 -0 -1 -1 -0 -0 -0 -0 4 5 8 9 0 6 7 1 2 1 2 3 4 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period Debit Avg Credit Avg Debit Credit Even split between debit vs.. credit 18Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  19. 19. How Members Use Their Cards Routine Household Purchases 50% 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% 08 02 03 04 05 06 07 09 10 11 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 0 0 1 1 -1 -0 -0 -0 -0 -0 -0 -0 -1 -1 -0 -0 -0 9 0 1 4 5 6 7 8 1 2 2 3 4 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period Debit Avg Credit Avg Debit Credit Members have slight preference for debit vs.. credit at 37% 19Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute
  20. 20. How Members Use Their Cards Major Household Purchases 80% 70% 60% 50% 40% 30% 20% 10% 0% 02 03 04 08 11 05 06 07 09 10 12 01 02 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 0 0 1 1 -0 -0 -1 -0 -0 -0 -0 -0 -1 -1 -0 -0 -0 5 9 0 1 2 1 4 6 7 8 2 3 4 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 /1 0 0 0 0 0 0 0 0 0 1 1 1 1 3-Month Period Debit Avg Credit Avg Debit Credit Major household purchases have increased from 59% to 67% on credit 20Source: Millward Brown, 2011 Brand Tracking Study ©2011 DFS Services LLC Confidential and Proprietary Do Not Copy or Distribute

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