Boston Fed: Target Breach Triggered No Change in Debit Card Use

by Sarah Grotta 0

ABA Banking Journal highlighted a study conducted by the Boston Fed that surveyed debit card cardholders before and after the significant retailer data breaches that occurred in 2013. For those interested in reading the full report, check here.

Debit users perception of the security of their personal information on their debit card dropped dramatically, but their buying habits didn’t change:

After the Target breach, 23 percent of consumers said their personal information would be “secure” or “very secure” while using a debit card — down from 37 percent before. Debit cards fell 11.3 percent compared to other payment choices in terms of how secure consumers considered them, while credit cards fell by 4.2 percent.

At the same time, consumers did not change their payment behaviors, as surveys conducted in 2014 showed no statistically significant variations in how consumers reported paying. The date of the breach — which was disclosed in December of 2013 — provided a good opportunity to evaluate perceptions and behaviors in 2013 and 2014 surveys, the researchers said.

Debit users may not have changed their buying habits despite feeling less secure as they were not willing to go back to cash or other less convenient payment types and because few consumers experience any financial loss, although they were certainly inconvenienced.

It will be interesting to see as more security measures are added to cards like EMV, card alerts and controls, biometrics and others, if cardholders will change their purchasing habits when they feel more secure.

Overview by Sarah Grotta, Director, Debit Advisory Service at Mercator Advisory Group

Read the full story here

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