U.S. consumers are increasingly relying on debit cards for more transactions and higher spending, according to the 2024 PULSE Debit Issuer Study. This study, commissioned by Discover® Financial Services’ PULSE debit network and conducted by Banking & Payments Group, highlights significant growth in the total number of debit cards, transactions, and annual spending per active card in 2023.
“The ease and convenience of debit has made it a cornerstone of the retail banking customer experience,” said Steve Sievert, executive vice president of Marketing and Brand Management at PULSE. “With active cardholders now using debit for over 400 transactions per year, a debit card serves as a daily reminder of the value of the relationship between a consumer and their financial institution.”
Daily Debit Use on the Rise
The study shows that debit transactions are growing at a faster pace than overall spending. In 2023, active cardholders averaged 34.6 transactions per month, including 30.7 point-of-sale (POS) transactions, 2 account-to-account transfers, and 1.9 ATM transactions. POS usage grew at an average annual rate of 4.4% from 2018 to 2023. The average debit transaction size was $46.89 in 2023, reflecting an average annual increase of 3.4% over the same period. The annual spending per active card reached $17,274, growing at an average rate of 8.1% per year from 2018 to 2023.
Debit card penetration (the percentage of accounts with an associated debit card) was reported at 80.5%, improving by an average of 0.6% per year from 2018 to 2023. However, debit card active rates (the percentage of debit cards used regularly) slightly declined by 0.2% annually, reaching 66.3% in 2023.
Growth in Card-Not-Present (CNP) Transactions
The adoption of card-not-present (CNP) transactions continues to grow, with issuers reporting that CNP accounted for 36% of debit transactions and 45% of debit spending in 2023. This represents a 5.2% year-over-year (YOY) increase. The average CNP transaction size rose by 2.8% YOY, reaching $60.81.
Trends in Mobile and Digital Payments
Mobile devices were responsible for 7% of all debit transactions and 15% of in-store contactless payments in 2023. While all surveyed issuers support provisioning debit cards into digital wallets like Apple Pay and Google Pay, only 38% of debit cards are actually loaded into digital wallets, with Apple Pay being the most popular.
On average, active cardholders completed three digital wallet transactions per month in 2023, with an average transaction value of $27.69. This is about 40% lower than the overall average debit transaction size, reflecting a mix of small-ticket in-person payments and in-app purchases.
Digital issuance—where an institution pushes debit card credentials directly to a digital wallet before the physical card is issued—is the top new capability issuers plan to introduce. Half of the issuers reported plans to add digital instant-issuance capabilities, which offer superior convenience, immediate usability, and significant cost savings for institutions.
Adapting to Evolving Debit Dynamics
As debit usage continues to grow, issuers are adapting to three key macro trends impacting the industry:
- A pending reduction in Regulation II’s interchange cap for covered issuers (those with $10 billion or more in assets).
- Increased competition from traditional institutions and digital challengers.
- Potential impacts from the growth of real-time payments.
In response to these trends, issuers have identified three key priorities for the remainder of 2024 and into 2025:
- Optimizing penetration, active, and usage rates.
- Strengthening fraud prevention efforts.
- Investing in new digital capabilities, such as instant digital issuance and cardholder visibility into recurring payments.
For more details, visit the PULSE Debit Issuer Study resource center.
About the Study
The 2024 Debit Issuer Study, the 19th in the series, was commissioned by PULSE and conducted by Banking & Payments Group, an independent management consulting firm specializing in the retail payments market. The study provides objective data on debit issuer performance and financial institutions’ outlook for the debit business. Respondents included large banks, credit unions, and community banks, representing the U.S. debit market in terms of institution type, geography, and debit network participation.
About PULSE
PULSE is a leader in debit payments, global cash access, and account transfers, providing exceptional value, choice, and convenience to clients across the payments ecosystem. Through the PULSE Network, the Discover® Debit program, an advanced fraud-detection platform, and partner-support services, PULSE enables reliable and secure digital money movement for a wide variety of debit card programs. As a Discover (NYSE: DFS) company and part of the Discover Global Network, PULSE is committed to continuous improvement, innovation, and addressing the unique business needs of its clients. For more information, visit PulseNetwork.com.
