A report recently released has shown that debit cards are set to become the most popular form of payment by the end of the year, as it protects consumers accumulating debt.
Consumers are steering clear of using credit cards whenever possible due to massive surcharges and the fear of going further into debt during these tough times.
Banking research firm East and Partners found in a research recently conducted that 28.9 per cent of all merchant sales were paid with a debit card in the six months to June, up from around 24 per cent in the previous six months.
Zoran Knezevic financial market analyst with East and Partners stated that after a gradual shift towards debit cards over the past few years the velocity has increased over the last six months.
Mr. Knezevic also felt that debit cards would become the most popular form of payment by the end of the year should the pace be maintained. Debit cards are already the most popular form of payment in the United Kingdom.
Rising unemployment and the global recession has made Australian consumers more conscious of the need to reduce debt.
Debit cards have also become extremely popular for online purchases for consumers. The use of debit cards also eliminates the charges that credit card users face when making purchases.
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