Ring em up! You won’t believe how many times debit cards are used for purchases

Shoppers turned to their debit cards for billions of transactions in 2023

In a payment universe where credit cards get all the attention for their rewards, fees and promotional offers, one payment type is quietly inspiring billions of swipes a year.

Debit cards, which are linked to checking accounts and typically don’t earn rewards, were used for 100.7 billion payments and generated $4.7 trillion in transactions in 2023, according to the Federal Reserve’s most recent report on debit card transactions. Compared to 2020 and 2021, transaction volume and dollar amounts grew more than 4 percent but lagged behind previous years’ growth.

“Total debit card transaction volume and value both grew at an average rate of 4.6 percent per year from 2021 to 2023, significantly slower than the average annual growth rates from 2009 to 2021 (7.8 percent by volume and 9.5 percent by value),” the report from last week stated.

The report reviewed transaction data from 13 debit card networks, such as Visa, and 166 card issuers.

Consumers used debit cards to make more than $4 trillion in transactions in 2023, according to a recent report from a branch of the Federal Reserve. (Getty Images)

Physical card use is still popular

The Fed’s study looked at various data, such as how much people spent when they used their debit cards virtually [“card-not-present” or “CNP”] versus with a physical card [”card present” or “CP”], and how many times consumers used the credit option at checkout versus the debit option when paying with their debit card.

Consumers used their physical card for 65.6 percent of their purchases and a virtual version of their card 34.4 percent of the time.

The outsized total dollars spent with debit cards is due to the higher spend consumers have - around double - when using the virtual version of their cards versus the physical version. The gap in purchase amounts is closing, though, as e-commerce companies adapt their selling practices.

“In 2023, the average transaction value of CNP transactions was once again higher than that of CP transactions, at $63.96 and $36.99, respectively,” The Fed reported. “However, as e-commerce has grown in popularity over the years and expanded to include smaller value purchases, the average transaction value of CNP transactions has decreased.”

Credit or debit?

It’s likely that most consumers who use their debit card at a local grocery store or gas station have faced the following question while swiping their card for payment: credit [i.e. “dual-message”] or debit [i.e“single-message”]?

Turns out shoppers have a clear favorite, according to The Fed.

“Dual-message networks, which traditionally processed mainly signature-authenticated transactions, accounted for 71.4 and 72.9 percent of the total by volume and value, respectively, in 2023,” the report said. “Single-message networks, which traditionally processed PIN-authenticated transactions, accounted for the rest.”