Cardholders are using ATM cards for POS and ATM transactions an average of 15.4 times per month, three times more per month than 1996, according to the STAR ATM network.  Much of this increased use can be attributed to the growth in POS usage, which jumped form an average of 4.2 times per month to 6.6 times per month in 1997.  According to the November 1997 survey of nearly 3,100 households in nine Western states the survey revealed:  POS users reported spending on average 24 percent more when they use POS than when using other payment methods.  This is an increase from the 1996 survey, which reported POS users spending on average 15 percent more when using POS; and almost two-thirds of the cardholders surveyed believed there were differences between making a PIN-based POS transaction and making a signature-based POS transaction.  When cardholders were directly asked which of  the methods they preferred, 67 percent believed the PIN-based provides more security and user control, and thus is the most preferred payment method.  Use of the POS cashback option increased form 2.3 times per month to 2.5 times per month (women are more likely than men to use the cash-back feature and to use it more frequently)  The majority of cardholders refer to their cards as “ATM” cards (61 %) vs. “debit” cards (9 %)  Nearly 70 percent of cardholders recalled using their ATM card within one week of receiving it.

The ATM/debit card market continues to grow by leaps and bounds! Cardholders are using ATM cards for point-of-sale (POS) and ATM transactions an average of 15.4 times per month, three times more per month than 1996.
    Much of this increased use can be attributed to the growth in POS usage, which jumped from an average of 4.2 times per month to 6.6 times per month in 1997. Hot places for cardholders to use ATM/debit cards for purchasing seem to be anywhere they can, with predominant use at supermarkets and gas stations.
    This information is the result of a recent survey conducted by Star System Inc., operator of the STAR ATM network, the largest regional ATM network in the United States, and the STAR POS service, which processes more than 70 million transactions per month throughout the western United States.
    "More consumers than ever before are aware that they can use their ATM/debit card for a variety of daily conveniences including: paying for goods and services at participating merchants, getting cash, transferring funds, checking balances and even paying bills over the telephone or computer," said Ron Congemi, president and CEO of Star System.
    "Our survey showed significant gains in ATM card use were made in all of the Western states."
    California led the country in overall card use, with 86 percent of cardholders reporting use of their ATM cards.

Key Findings

    According to the November 1997 survey of nearly 3,100 households in nine Western states (California, Arizona, Nevada, Hawaii, Idaho, Utah, Colorado, Oregon and Washington), the survey revealed:

    -- ATM card use increased significantly from 12.2 times per month in 1996 to 15.4 times per month in 1997.
    -- The western U.S. continues to lead the national average with 82 percent of consumers owning an ATM card and of these, 84 percent reported using their card in the 30 days prior to the survey
    -- In Washington, consumers reported the highest ATM card usage for 1997, surpassing Arizona which was the 1996 leader; Washington ATM card users use their cards 18 times per month on average compared to 17.3 times per month in 1996.
    -- POS usage jumped from an average of 4.2 times per month in 1996 to 6.6 times per month last year.
    -- POS users reported spending on average 24 percent more when they use POS than when using other payment methods. This is an increase from the 1996 survey, which reported POS users spending on average 15 percent more when using POS.
    -- Almost two-thirds of the cardholders surveyed believed there were differences between making a PIN-based POS transaction and making a signature-based POS transaction. When cardholders were directly asked which of the methods they preferred, 67 percent believed the PIN-based method provides more security and user control, and thus is the most preferred payment method.
    -- Use of the POS cash-back option increased from 2.3 times per month to 2.5 times per month (women are more likely than men to use the cash-back feature and to use it more frequently).
    -- STAR POS use frequency increased substantially in Arizona, from 5 times per month in 1996 to 10 times per month in 1997.
    -- The majority of cardholders refer to their cards as "ATM" cards (61 percent) vs. "debit" cards (nine percent).
    -- Nearly 70 percent of cardholders recalled using their ATM card within one week of receiving it.

Gender Differences:

    -- Appeal and use of ATMs did not vary by gender. Both men and women use the service equally.
    -- The survey results show that women use POS more often than men. In 1997, women used POS 7.3 times in the month prior to the survey, compared with only 5.9 times for men.
    -- Men were more likely to use POS at gas stations and women were more likely to use POS at grocery stores.

    -- On average, women utilized the cash-back option nearly three times per month compared with two times per month for men.

A Look at Usage by Age:

    -- Consumers who used ATM cards the most were between the ages of 18 and 20 and conducted 19.4 ATM and POS transactions each month.
    -- The greatest jump in usage of "foreign" ATMs (locations where cardholders obtain cash other than the financial institution that issued their card) was for respondents aged 18-20 years who reportedly use foreign ATMs five times per month, an increase of 2.5 times from the 1996 study.

Safety and Security:

    -- Safety concerns continued to decrease with more than half of consumers (54 percent) reporting that ATMs were "very safe" or "fairly safe." This may be attributed to the increasing installation of many terminals in retail locations.
    -- More than 50 percent of consumers still receive checks with their monthly statements.

Fees are OK:

    -- Consumer sensitivity to fees for ATM use has declined for the second consecutive year, with only 30 percent responding that ATM fees were unreasonable.
    -- Nearly three-fourths (74 percent) reported using a foreign ATM where they had been surcharged, an increase of 10 percent from last year's study.
    -- Most consumers were willing to pay reasonable fees for using a foreign ATM in general and slightly more for making a deposit at a foreign ATM.
    -- Many cardholders (over two-thirds) were not even aware of the POS transactions fees levied by their financial institutions or charged by the retailers. And of those that were, fees were felt to be reasonable and equitable.

Home Banking and Telephone Banking Most Popular:

    -- In the area of new technology services, respondents ranked the most appealing service was the ability to do banking transactions, transfer funds and review banking statements from a home computer and secondly by telephone. In addition, more than half of the consumers (58 percent) indicated that they had a personal computer located in their home.
    -- The next two most popular services were conducting banking transactions from an automated self-service banking center or terminal, and paying bills through a service offered from the financial institution.
    -- Cardholders rated the appeal of Smart Card technology (an ATM card with an imbedded micro-processing computer chip that is used to pay for small purchases without a personal identification number) as having some interest, particularly with younger individuals. The majority (54 percent) of the respondents said they would be willing to store more money on the card if a PIN code was used to protect the funds.

Home Computer Access and New Technology Interests:

    -- More than half of consumers indicated that they had a personal computer located in their home, and of these, 76 percent have modem access and capabilities, an increase of 11 percent from 1996. Of these consumers with home PCs, 11 percent reported they currently use bill-paying services via the telephone or computer, a two percent increase from last year.

    Star System, with headquarters in San Diego, is the nation's largest not-for-profit electronic funds transfer network open to financial institutions in the West and operates the STAR ATM network (formerly STAR SYSTEM, begun in 1984) and the STAR POS service (formerly EXPLORE, begun in 1987).
    This is the eighth year that Star System has conducted an Awareness, Trial and Usage Study of ATM and POS services. The 1997 study encompassed nine states and was conducted by Los Angeles-based Applied Management & Planning Group.

                 Star System Inc. 1997 Consumer Survey
                          ATM Card Activation
                    (Used ATM Card in Past 30 Days)

                   1994       1995              1996         1997

(Sample Size)     n=1555     n=1663            n=2507       n=2299
Systemwide (a)      80%        84%               83%          84%

(Sample Size)     n=790      n=629             n=736        n=687
California           83%        86%               85%         86%

(Sample Size)     n=388      n=305             n=368        n=339
Arizona              78%        83%               82%          85%

(Sample Size)     n=377      n=327             n=400        n=343
Nevada               77%        81%               81%          76%

(Sample Size)     N/A        n=135             n=177        n=143
Hawaii            N/A           73%               79%          77%

(Sample Size)     N/A        n=107             n=118        n=124
Idaho             N/A           73%               68%          75%

(Sample Size)     N/A        n=116             n=159        n=141
Utah              N/A           63%               76%          76%

(Sample Size)     N/A        N/A               n=152        n=140
Colorado          N/A        N/A                  77%          78%

(Sample Size)     N/A        N/A               n=167        n=169
Oregon            N/A        N/A                  84%          83%

(Sample Size)     N/A        N/A               n=166        n=148
Washington        N/A        N/A                  80%          80%

-0-
                         ATM Card Penetration
                    (Used ATM Card in Past 30 Days)

                   1994       1995             1996           1997

(Sample Size)    n=1705      n=2324            n=3381        n=3041
Systemwide (a)     90%         78%               80%           82%

(Sample Size)    n=853       n=863             n=948         n=871
California          92%         79%               83%          85%

(Sample Size)    n=432       n=415             n=490         n=439
Arizona             81%         78%               85%           82%

(Sample Size)    n=420       n=430             n=514         n=447
Nevada              80%         81%               85%           86%

(Sample Size)    N/A         n=201             n=257         n=205
Hawaii           N/A            72%               75%           79%

(Sample Size)    N/A         n=208             n=218         n=219
Idaho            N/A            59%               67%           71%

(Sample Size)    N/A         n=207             n=249         n=211
Utah             N/A            65%               70%           74%

(Sample Size)    N/A           N/A              n=231         n=220
Colorado         N/A           N/A                 71%           71%

(Sample Size)    N/A           N/A              n=230         n=217
Oregon           N/A           N/A                 84%           85%

(Sample Size)    N/A           N/A              n=244         n=210
Washington       N/A           N/A                 75%           74%


(a) Weighted sample based on the relative population sizes of
California, Arizona, Nevada, Hawaii, Idaho, Utah, Colorado, Oregon and
Washington.