A Study on Customer Satisfation Level in Using Debit Cards in Banks
CHAPTER 1
INTRODUCTION
1. INTRODUCTION
Like the ATM side of the industry, the debit-card side has also seen important changes, especially in transaction volume and industry structure. After a long gestation period in which debit transactions grew slowly, debit transaction volume began to grow very rapidly in the mid- 2000s in India. Paralleling developments in the ATM industry, the number of online debit networks has declined and industry concentration has increased. Perhaps the most dramatic development in the industry has been the race between online and offline debit. Important underlying elements in this competition are the fee structures associated with debit card payments and rules that compel merchants to accept offline debit cards. This section reviews these changes. The section also reviews authorization, fee, and settlement arrangements for debit transactions. In addition, emerging products that use debit cards for making payments are surveyed.
Although debit cards were in use during the 1980s, transaction volume was negligible. In the early 1990s, growth was sufficient to make debit card volume more noticeable, but by 1995 it still represented only 2 percent of retail noncash payments.68 Strong growth in more recent years, however, pushed the percentage to 11.6 percent in 2000.69 As seen in Chart 10, online and offline debit transactions showed similar growth patterns from 1990 to 1995, and by 1995 each had roughly the same number of transactions. However, after 1995, the growth of offline transactions outpaced online, so that by 2000 the number of offline transactions was 63 percent higher than online transactions.70 As a consequence, online debit’s share of total debit transactions has fallen .Online debit represented about 60 percent of debit transactions in the early 1990s, but in the last few years its share has been closer to 40 percent. Online debit’s share has increased the last
INTRODUCTION
1. INTRODUCTION
Like the ATM side of the industry, the debit-card side has also seen important changes, especially in transaction volume and industry structure. After a long gestation period in which debit transactions grew slowly, debit transaction volume began to grow very rapidly in the mid- 2000s in India. Paralleling developments in the ATM industry, the number of online debit networks has declined and industry concentration has increased. Perhaps the most dramatic development in the industry has been the race between online and offline debit. Important underlying elements in this competition are the fee structures associated with debit card payments and rules that compel merchants to accept offline debit cards. This section reviews these changes. The section also reviews authorization, fee, and settlement arrangements for debit transactions. In addition, emerging products that use debit cards for making payments are surveyed.
Although debit cards were in use during the 1980s, transaction volume was negligible. In the early 1990s, growth was sufficient to make debit card volume more noticeable, but by 1995 it still represented only 2 percent of retail noncash payments.68 Strong growth in more recent years, however, pushed the percentage to 11.6 percent in 2000.69 As seen in Chart 10, online and offline debit transactions showed similar growth patterns from 1990 to 1995, and by 1995 each had roughly the same number of transactions. However, after 1995, the growth of offline transactions outpaced online, so that by 2000 the number of offline transactions was 63 percent higher than online transactions.70 As a consequence, online debit’s share of total debit transactions has fallen .Online debit represented about 60 percent of debit transactions in the early 1990s, but in the last few years its share has been closer to 40 percent. Online debit’s share has increased the last
References: • D. Power & Associates1999 Investor’s Business Daily, July 9, 1999 • Berry, Brodeur 1998 ten domains of satisfaction, 1990 to 1998 • Buchanan, R. and Gilles, C. 1990Value managed relationship: The key to customer retention and profitability", European Management Journal, vol 8, no 4, and 1990. • Buckinx W., Geert Verstraeten, and Dirk Van den Poel 2007 Predicting customer loyalty using the internal transactional database," Expert Systems with Applications, 32 (1). • Carrol, P. and Reichheld, F. 1992, the fallacy of customer retention", Journal of Retail Banking, vol 13, no 4, 1992. • Dawkins, P. and Reichheld, F 1990 "Customer retention as a competitive weapon", Directors and Boards, vol 14, no 4, 1990. • Fornell, C. and Wernerfet, B. 1987"Defensive marketing strategy by customer complaint management: a theoretical analysis", Journal of Marketing • Moloney, Chris X. 2006"Winning Your Customer’s Loyalty: The Best Tools, Techniques and Practices" AMA Workshop Event(s). Misc. materials distributed related to event(s) • San Diego, 2006. Chris X. Moloney Reichheld, F. 1996The Loyalty Effect, Harvard Business School Press, Boston, 1996. ANNEXURE