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Debit Users Are Key to Bank Profitability in Colombia

BY NITIN SUMANGALI AND CHRISTINA SOMMER

Electronic payments provide Colombian consumers with two very desirable assets: a safe and convenient way to spend as well as a means to manage their spending behavior.

Banks that identify and implement strategies to improve and enhance the consumer experience of using debit cards will be able to realize the enormous potential that the Colombian debit card market holds.

Debit cards can be a key source of revenue for banks because they drive net interest income in the form of higher deposits and, more directly, because they provide interchange and consumer fees.

By focusing efforts on heavy debit users and the merchant categories where heavy debit users still spend cash, issuing banks can convert cash spend to debit card spend and drive sustainable, long-term revenue growth.

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

Cash usage drops as debit usage rises
Monthly Spending Mix

Source: MasterCard, Cash to Debit at Point of Sale Study, December 2009.