MasterCard research[1] shows that heavy debit card users in emerging markets also tend to be heavy users of cash. Take Colombia for example, where heavy debit users—defined as those who use debit cards more than once per week—spend about a quarter of their monthly expenses on debit cards. These consumers spend an equal amount in cash. In Colombia and other markets where debit usage is nascent, focusing marketing efforts on heavy debit users may sound counterintuitive, but, in fact, it may be the most effective way to go.

CASH USAGE DROPS AS DEBIT USAGE RISES

Monthly Spending Mix in Colombia

Consumers generally progress along a payments continuum from cash to ATM to debit cards; moving them along this continuum takes time. So motivating early adopters, such as heavy debit users, to use their cards in categories where they typically use cash, makes sense. There is no learning curve, they already know how to use the product, and they have an affinity for using debit cards in other categories. In the MasterCard study, 97% of heavy debit users said they would use debit cards more often if they received discounts and rewards. Offering incentives that increase debit use among this segment may also create a buzz that influences the behavior of those who are not as far along the adoption curve..

[1] MasterCard, Cash to Debit at Point of Sale Study, December 2009.

Also appears on The Heart of Commerce Blog.

Topics: Debit