INTERAC . . . CLOSING THE GAP ON CASH

By Jodie Mirosovsky, Home Economist
TEAM Resources

What form of payment do you use to make purchases? Personally, I have found myself using INTERAC more this year. It simply seems safer than racking up my Visa bill. Studies have shown that many Canadian consumers are following this trend.

Since 1994, when INTERAC Direct Payment (IDP) was first introduced across Canada, use among consumers has grown steadily and confidence in the service has remained high. Results from a study conducted by The Strategic Counsel, of Toronto, show that use in 1998 more than met expectations. In fact, IDP is quickly closing the gap on cash.

In 1995, 58 per cent of cardholders said they use cash most often compared with 10 per cent who said they use IDP. In 1998, the percentage of people who state cash is their primary payment method dropped to 45 per cent while IDP climbed to 31 per cent - a dramatic shift. And, for the past three years, IDP preference has surpassed credit cards and cheques.

IDP is presently the preferred way to pay in department stores and is edging-out cash at supermarkets/grocery stores.

There is a clear trend that Canadians - especially women - are moving towards a society where cash is used less," says Jim Kenney, Vice President, Marketing, INTERAC Association. "For reasons of safety and convenience it just makes sense.

The growth in INTERAC Direct Payment confirms that Canadians love the service and are satisfied with the benefits."

Since IDP's inception, women have been committed users of the service.

The 1998 study shows 79 per cent of women cardholders have used the debit payment and the majority - 54 per cent - are very frequent users. This is a jump from 1996 when use among women was 68 per cent.

In the age demographic, 18 -24 year-olds continue to be the group who have most likely tried IDP at 96 per cent, up 11 per cent from two years ago.

But IDP is quickly becoming familiar to everybody. People over 45 are catching up. Compared with 1996 when 42 per cent of those over 45 said they had tried IDP, 1998 shows a 20 per cent improvement with 63 per cent saying they have tried it.

"Young people are early adopters of new technology, but, at the other end of the spectrum, people over 55 are seeing the benefits of using INTERAC Direct Payment," says Kenney. "The growth in acceptance of the service is a testament to its simplicity, reliability and security."

Most Frequently Asked Consumer Questions

• Where can I use the INTERAC services?

INTERAC services are available wherever you see the familiar INTERAC logo.

• What is a debit card?

A debit card, also known as a banking card, is issued by a financial institution, which allows its customers to access their deposit accounts electronically. For instance, the card can be used at an ABM or ATM to withdraw cash or can be used to pay for purchases at participating retailers using the INTERAC Direct Payment service.

• How do I get a card that I can use for the INTERAC services? Where do I sign up?

In most cases, your regular banking card can be used to access INTERAC services without having to "sign up" anywhere. For further information simply ask a customer service representative at the financial institution where your account is held.

• What are the rules for using it? How old do I have to be? How much money do I have to have in my account?

The INTERAC services can be used by anyone who has a deposit account with one of INTERAC Association's participating member financial institutions, as well as a card and associated PIN that can be used to access this account. Some financial institutions may have age restrictions on the issuing of such banking cards, but these policies are set by the individual institutions. As long as you have a card from a participating financial institution, which can access your account, and sufficient money to cover your purchase or withdrawal, you can use the INTERAC Shared Cash Dispensing service and/or the INTERAC Direct Payment service.

• Why do users of the service have to pay a service charge for INTERAC services?

The charges relate to the cost of accessing your account, using the network, terminal installation, and the processing. Each member sets and collects its own service charges for using the INTERAC services.

• Why won't my card work?

Consumers who encounter problems accessing either the INTERAC Shared Cash Dispensing service (dispensers that will accept INTERAC, Cirrus Maestro) or the INTERAC Direct Payment service are urged to contact their financial institution. Problems could be caused by something as simple as dirt on the card's magnetic strip, or a phone-line failure at the retailer level. All financial institutions and/or retailers who use the INTERAC services are aware that problems may arise and have procedures in place to detect and correct them.

For more information, please contact: Carolyn Evans, Hill and Knowlton (416) 413-4648.