Consumers globally tend to move along a continuum of debit card adoption, beginning with cash-only usage, moving to ATM usage, and finally progressing to heavy debit card usage.

Issuers, acquirers, and merchants can enhance long-term profitability by making changes in operations and marketing to support the migration of transactions from cash to debit at the point of sale (POS).

Because markets across the globe are in different phases of maturity, the migration process requires varied approaches designed to move consumers from one stage to the next. Adding incentives and removing barriers to debit use at the point of sale should improve long-term profitability for all parties in the payments ecosystem.

But the stakes for issuers go beyond immediate revenue gain. Adoption of mobile as the form factor of choice is taking hold in many parts of the world. Only by positioning bank networks as an integral part of this system will banks maintain their share of payments transactions.

1. McKinsey, Global Payments Map, 2007; MasterCard analysis.