By : Andy Brown
Security remains one of the biggest priorities for US consumers as far as
payments are concerned. People also like to know that they have control over
These are two of the key findings in the TSYS 2016 US Consumer Payment Study, which surveyed more than 1,000 people spanning various
demographics. The research provided some eye-opening insights into what
really matters to customers and how financial institutions (FIs) might be able
to improve their payment services.
Security over rewards
Asked to name their top priorities when shopping for a new payment card,
nearly three-quarters (74 percent) of respondents to the TSYS survey said
security and fraud protection and 26 percent preferred rewards. Regardless of the
fact that most cards offer the same level of protection, the study authors said this big disparity in preferences shows just how important
security is to consumers.
The report also revealed that people value features that give them more control over their finances, such as
mobile functions to stop payments, view transactions and turn cards on and off.
There have been some big developments on the security front in recent years, particularly in the US, where EMV
chip cards were rolled out nationwide in October 2015. EMV chips create a unique transaction code for every
payment, making them much more secure than the magnetic stripes on traditional credit and debit cards.
The TSYS report said: "The good news for consumers is that issuers take great care to ensure the cards they issue
have many security features and that transactions are encrypted and safe. The US payments industry has moved
to chip cards to eliminate the ability for fraudsters to successfully counterfeit cards.
"In the end, consumers do not need to choose security over rewards. However, the responses to the question we
posed reflect consumers' focus on security."
The fact there has been encouraging progress on the security front doesn't mean card issuers and payment firms
can take anything for granted. Risks of fraud from non-EMV card not present transactions remains a major
concern. A recent study conducted at Newcastle University in the UK found that it's possible to generate valid Visa
credit or debit card in as little as six seconds. Researchers essentially used a process of elimination to identify card
details, taking advantage of the fact that it's possible to make multiple, invalid attempts to submit card data
without being detected.
Cash keeps its appeal
Cards are the leading consumer payment method in the US, according to the TSYS findings, but cash still has an
extremely important part to play, particularly with security in mind.
Nearly a third (32 percent) of the people surveyed identified cash as the safest way to make in-store purchases,
putting it just behind credit cards (35 percent) and significantly ahead of debit cards (18 percent). PayPal (two
percent), prepaid or gift cards (two percent) and checks (one percent) were a long way behind.
When consumers who hold both credit and debit cards were asked to name their preferred payment type, 40
percent said credit card and 35 percent opted for debit card. Cash (11 percent) was in third place and enjoyed a
level of support that was fairly consistent with recent years.
Sarah Hartman, senior director of consumer issuing at TSYS, told PYMNTS.com: "The strength in cash as a
preferred method of payment continued to surprise us given the increase in all the different electronic payment
methods and, of course, all of the push there's been over the years to become a cashless society." However, as
would be expected there are significant differences in preference based on household income with lower income
households much more likely to favor cash. Surprisingly the oldest age group (65 and older) preferred credit cards
to cash while the 55 to 64 year olds had a much higher preference for cash.
Cash continues to be an important mechanism of the payment mix but consumers do prefer cards for most of