Banks Plan to Issue More
Debit and Stored Value Cards

The latest survey by the American Bankers Association reveals that banks are responding rapidly to the dynamic financial market. We provide a very brief summary.

Debit cards. Banks of all sizes and categories plan to expand their issuance of debit cards (in spite of the reduction in expected debit card revenue from merchants as a result of the bank card association's loss in the Wal Mart lawsuit. See previous article) and invest in the skills and equipment needed to compete successfully in that market. Small issuers expect to persuade 51 percent of demand deposit account holders to adopt POS-debit cards, while large issuers believe that they will achieve a 72 percent adoption rate.

Payroll cards are gradually becoming more popular. Whereas none of the large banks issued them last year, 10 percent are doing so in 2003.

Stored-value cards. One-fifth of responding banks plan to issue stored-value cards in 2003, up from eight percent last year. The offering of stored-value cards was most common among large banks.