U.S. Consumers and Credit: Potential Disruption to Issuers


Wary about credit card security, consumers want EMV cards but find using them frustrating

Mercator Advisory Group survey finds that 28% of EMV payment card users found use confusing or bothersome or avoid stores with EMV

Author: Karen Augustine
Published on: November 23, 2015

The most recent Insight Report from Mercator Advisory Group’s biannual CustomerMonitor Survey Series reveals that 29% of U.S. consumers own EMV-enabled chip cards, up from 10% who did in 2014, and 1 in 3 EMV card holders have used them in EMV readers in merchant terminals in the United States. Although many recognize they must dip the chip card in the checkout terminal rather than swiping it and are not bothered by the new process, 28% of EMV cardholders are bothered by it, consider it confusing, or try to avoid stores that force them to dip their chip card rather than swipe it. Young adults (52%) and mobile payers (58%) are especially likely to say so, suggesting some consumers may be likely to use mobile payments whenever they can to circumvent EMV cards. Mobile payments may potentially disrupt the credit card process by changing the way consumers choose “top of wallet” payment cards. Consumers must choose which payment cards to load in their mobile wallet and then choose the payment method for each purchase, a task more time-consuming, though less convenient than stuffing a few cards in a wallet.

U.S. Consumers and Credit: Potential Disruption to Issuers, the latest report from Mercator Advisory Group’s Primary Data Service, shows that there may be a wider variety of potential disruptors to credit card use for payments and borrowing on credit than just EMV and mobile payments. Marketplace lenders, usually found online, are offering consumers a way to obtain personal loans with faster turnarounds and potentially lower rates than offered by financial institutions by directly connecting investors with borrowers online through peer-to-peer lending sites.

Security issues are a concern among consumers given the frequent occurrence of data breaches. Most consumers appreciate the added security of chip-enabled payment cards. In fact, there is growing interest among consumers who do not yet have an EMV card, but want to obtain one, especially for debit cards, since more consumers have chip-enabled credit cards than debit cards. Enhanced security services such as card controls to reduce fraud are also of growing interest.

This study examines the demographic landscape of credit card use, use of co-branded credit or charge card programs by type, shift of credit card use to other payment types, 13 brands or types of financial institutions of credit or charge cards used, notice of and reaction to merchant steering practices, usage of marketplace lenders, consumer experience of changing fees, APRs, motivators to increase credit card borrowing and credit card spending, application channels used for general purpose credit cards and store credit cards, and consumers’ notice of and reaction to merchant rules for credit card use and interest in mobile-based account controls.

The report presents the findings from Mercator Advisory Group’s CustomerMonitor Survey Series online panel of 3,008 U.S. adult consumers surveyed in June 2015.

“Consumers are excited by the implied security enhancement of EMV and want to obtain EMV-enabled cards, but they don’t want to be bogged down by early implementation issues at the point of sale,” states Karen Augustine, manager of Primary Data Services including CustomerMonitor Survey Series at Mercator Advisory Group and author of the report.

The report is 71 pages long and contains 30 exhibits

Highlights of this report include:

  • Year-over-year trending of penetration of credit cards in the U.S. market, card holder behavior, and changes to features, credit limits, APRs, applications, and turn-downs 
  • Usage and interest in EMV chip cards by type and user experience in the U.S. and abroad 
  • Usage of co-branded credit cards by type 
  • Shifts in channels consumers used most recently to apply for general purpose and store credit cards 
  • Brands of financial institutions used, whether they are considered primary by the consumer, and whether the consumer has a credit or charge card at that institution 
  • General purpose reward card participation, type of rewards available, most valuable reward type 
  • Consumer perception and expected reaction to merchant rules restricting credit card use or steering customers to other payment forms 
  • Interest in mobile-based account controls for card holders to limit fraud by card type 
  • Usage of marketplace lending platforms and brand of marketplace lenders used



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