In our last blog, we discussed how credit cards provide consumers with peace of mind. They offer warranties and purchase protection, can be replaced if lost or stolen and help to build your credit history. Arguably, debit cards are just as popular as credit cards. In Canada, we popularly refer to our debit cards as “Interac cards” after the company that provides them.
“The 6.5 billion Interac Debit transactions in 2023 was an increase over 6.2 billion in 2022 and the 5.86 billion completed in 2021,” reports Interac’s website, “And the service is evolving along with Canadians’ shifts in technological and spending habits. Interac Debit contactless payments made at a point of sale in Canada using a mobile device, such as a smartphone or wearable, reached a total of just over one billion transactions during the 12 months ending July 2023.”
What makes debit card use so popular?
They help consumers to avoid debt.
As you’re aware, credit cards allow shoppers to borrow money. The purchases they make are effectively paid for by their credit card companies. Cardholders are then required to pay the providers at a later date. That’s the way credit works. You’re spending money you may not necessarily have at the moment. If you overspend, you can put yourself in debt. This can be avoided with a debit card as a user can only spend up to the amount of money in his or her bank account.
“A debit card draws on money that the user already has, eliminating the danger of racking up debt,” explains Mark P. Cussen of Investopedia, “People typically spend more when using plastic than if they were paying cash.4 By using debit cards, impulsive spenders can avoid the temptation of credit and stick to their budget. This can help keep you out of high-interest debt.”
They charge no annual fee.
There are numerous credit cards on the market. The card most suitable for each consumer depends on his or her spending style and/or interests in perks and bonuses. Many of these cards have annual fees. Depending on the usage of the card, the annual fee can be considered well worth the expense. In some cases, however, shoppers much prefer to use cards that have no annual fee. Debit cards fall into that category.
“Though many credit cards charge an annual fee, debit cards don’t,” informs Cussen, “There’s also no fee for withdrawing cash using your debit card at your bank’s ATM. Credit cards, on the other hand, can charge a cash advance fee plus a steep interest rate for that convenience. However, you may pay other fees to maintain your checking account.”
They offer fraud protection.
As we noted in our last blog, many credit cards offer protection against fraud as well as other warranties. Debit cards offer similar benefits. As Cussen points out, “in the past, credit cards offered far greater fraud protection than debit cards. Some debit cards - particularly those issued by payment processors, such as Visa or Mastercard - are starting to offer more of the protections enjoyed by credit card users.”
Do you accept debit cards at your business?
At Unity Payments, we proudly offer Canadian merchants a variety of high-quality payment terminals to enable them to accept credit cards and debit cards. They include the Poynt Newland 910, the Ingenico Desk/5000, the Ingenico Move/5000 and the Poynt C Smart Terminal. To learn all about your options, please don’t hesitate to call us at 1-800-661-3761. You may also email us at info@unitypayments.ca.
