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September
5, 2006
Credit
Card Micropayments on the Rise, Especially Among the Young
Visa announced last week a 17% rise in card usage for purchases
of under $25, and a Visa survey suggested those numbers would
rise, especially among younger consumers. Visa reported that
its volume on purchases less than $25 totaled $27.3 billion
in the first six months of the year.
Visa's new survey found that 55% of the 1000+ respondents use
payments cards for small ticket items less than $25, with convenience
and ease of use being their leading reasons for doing so. The
survey suggests that an increasing number of these purchases
are being made with debit cards versus credit cards. For consumers
between the ages of 18 and 25, 44 percent of these purchases
were made with debit cards, versus 33 percent of such purchases
by shoppers over 45.
In
addition, the survey found that 70 percent of consumers ages
18-25 are willing to use payment cards for purchases less than
$2, compared to only 26 percent of consumers ages 45 and older.
Visa
is aggressively pushing the use of credit and debit cards for
small purchases. Key components of this strategy include waiving
the signature requirement for transactions under $25 and cutting
the credit and debit interchange rates that merchants pay for
transactions of $15 or less.
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