WASHINGTON – A study conducted by the American BankersAssociation and Dove Consulting has documented that debit cards arebecoming the clear winner in the ongoing war over what type ofpayment consumers prefer. ACI Worldwide, a leading internationalprovider of solutions for consumer and wholesale payments andapplication infrastructure, CitiGroup, The Clearing House PaymentsCompany and Mastercard sponsored the research. “Across all paymentvenues, debit is emerging as the clear winner,” says Tony Hayes,vice president at Dove Consulting. “Debit is now tied with cash forthe highest share of consumers' in-store purchases, and a third ofall consumers report that debit is the payment method they use mostfrequently in stores. Consumer use of debit for online purchasesand bill payments is also increasing-particularly if they receiverewards.” The shift from paper to electronic payment methods willlikely continue over the next few years as new electronic paymentmethods with unique benefits, for example new forms of cardtransactions enter the mix, the survey predicted. The 2005/2006Study of Consumer Payment Preferences found that each monthconsumers make 58 individual payment choices, whether by buyingthings in stores or over the Internet, or paying bills. The surveyalso found that cash and checks now account for only 45% ofconsumers' monthly payments-down from 57% in 2001, and 49% in 2003.“The consumer switch to electronic payments is increasing acrossthe board -albeit at different rates,” said Jane Yao, ABA'smanaging director of benchmarking and survey research. “We all knowthat consumer use of electronic payments for in-store purchases hasincreased steadily for years and much of the `easy' migration hasalready occurred. This year's survey results show that electronicbill pay is quickly catching up.” Consumers' migration toelectronic payments for in-store payments has been driven largelyby the increasingly popularity of debit, which achieved significantgrowth at the expense of checks. Six years ago, debit representedonly 21% of in-store transactions; today consumers report thatone-third (33%) of in-store purchases are made with debit cards. Asother surveys have indicated, the fastest growing recent productsare gift cards. Gift cards now account for 4% of all in-storepurchases, up from 2% in 2003. The percent of consumers whoindicate using gift/prepaid cards to make at least one purchase permonth in stores has increased from 12% in 2003, to 32% in 2005.Moreover, this growth looks likely to continue with 12% ofconsumers planning to increase their use of gift/prepaid cards overthe next two years. Also continuing the current trend, checks arestill losing ground as more and more consumers turn to automaticbill payment and online bill payment. Today, 52% of consumers useautomatic payment to pay at least one bill per month, and 39% ofconsumers use online bill payment, including using these methods topay multiple bills. Checks now account for less than half ofconsumers' monthly bill payments-only 49%- down from 72% in 2001,and 60% in 2003. [email protected]