Debit cards were used for 100.7 billion payments in 2023, generating $4.7 trillion in transactions, according to a new report from the Federal Reserve. The figures highlight the continued dominance of debit cards in the US payments landscape, even as growth slowed compared to previous years.
The Fed's study, which analysed data from 13 debit card networks and 166 card issuers, found that transaction volume and value both grew at an average rate of 4.6 per cent per year from 2021 to 2023. This is significantly slower than the 7.8 per cent volume growth and 9.5 per cent value growth recorded between 2009 and 2021.
Consumers used physical cards for 65.6 per cent of purchases, while virtual (card-not-present) transactions accounted for 34.4 per cent. The average virtual transaction was worth $63.96, nearly double the $36.99 average for physical card payments, though the gap is narrowing as e-commerce expands to include smaller purchases.
The report also examined consumer preference for authentication methods. Dual-message networks, which typically process signature-authenticated (credit) transactions, handled 71.4 per cent of volume and 72.9 per cent of value in 2023. Single-message networks, which process PIN-authenticated (debit) transactions, accounted for the remainder.
The findings underscore the scale of debit card usage, despite credit cards often garnering more attention for rewards and promotional offers. Debit cards, linked directly to checking accounts, remain a staple for everyday spending.
