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MERIDIAN BANCORP AND BANKCARD HOLDERS OF AMERICA RELEASE WHITE PAPER ON DEBIT CARDS

White Paper Finds Debit Cards May Surpass Credit Cards by Year 2000;
 Paper Tracks Parallels Between ATM and Debit Card Growth
 PHILADELPHIA, March 30 /PRNewswire/ -- A white paper released today, "Debit Cards in the United States," forecasts that debit card use will overtake credit card use by the year 2000.
 Debit use is expected to grow to over 5 percent of all consumer payment transactions in the United States, which would put it above current levels of consumer payments now accounted for by general purpose credit cards. Debit cards work like "plastic checks," drawing funds for purchases directly from a customer's checking or savings account. The forecast was based on industry experts who are tracking the fast-paced rise of debit cards in comparison with a slow-down in the rate of growth for credit cards; and a Meridian Bank survey that revealed a 42 percent decline in credit card use among people who obtained a debit card.
 Meridian Bancorp, in consultation with the Bankcard Holders of America, issued the paper at a symposium here titled, "The Decade of the Debit Card: Is It Finally Here?"
 The white paper also tracks the strong parallels between the dramatic growth of automated teller machines (ATMs) in the 1980s and the steady growth of debit card use today. The paper states, "The widespread use of ATM cards would appear to augur well for the emerging debit card industry. In the last decade, the number of ATMs in the U.S. has swelled to 83,545 from 25,790. Total ATM volume reached 534.9 million monthly transactions in 1991 ... up 210 percent from 1981 ... A similar rapid expansion now appears to be afoot in debit cards. Though reliance on debit remains small in comparison to other methods of consumer payments, the use of debit cards has jumped four-fold since 1987."
 According to the paper, the second significant factor for debit card acceptance is the "credit revulsion" many consumers are experiencing. People are paying down debt to avoid high credit card interest rates. The paper states, "The debit card would appear to be uniquely positioned to satisfy the needs of Americans who combine a desire for the convenience of plastic with a thrifty impulse to pay as they go."
 "Debit cards have been available since the early '80s, but the concept has generally been confusing to consumers," explained Joe Pendleton, Meridian's senior vice president of electronic banking and one of the symposium speakers. "Today, debit cards are enjoying more widespread use because consumers understand and are comfortable with electronic banking at ATMs. They like the debit card because it affords them the control of spending within their means, and they like the fact that the debit card is as convenient to use as a credit card but doesn't carry the same risks of building debt with high interest rates."
 In addition to Pendleton, the symposium featured industry experts Elgie Holstein, president of the Bankcard Holders of America; Sean Kennedy, president of the Electronic Funds Transfer Association; and Lauri Giesen, editor of industry trade magazines POS News and Bank Network News.
 "This paper and the symposium are important links in the ongoing consumer education process on debit cards," said Holstein. "People aren't sure of how debit cards fit into their overall financial picture, especially since debit cards don't fit neatly into any one category like credit or ATM cards. However, those same people typically experience a revelation of sorts when they understand that using a debit card is easier than writing a check and can actually help them better control their financial situation."
 In addition to discussions on consumer acceptance, the white paper addresses:
 -- consumer payment habits and the increase in electronically transferred funds;
 -- debit vs. credit cards;
 -- the role of Visa and MasterCard in the debit card market;
 -- the difference between on-line and off-line debit card systems;
 -- specific consumer issues like fees, security and financial management;
 -- debit card use beyond the 1990s; and
 -- international use of debit cards.
 "Our hope is that the white paper will become a useful resource for information providers, and that the dialogue started here today on what we can all do for ongoing consumer education will continue," said Pendleton.
 Meridian Bank is the largest issuer of debit cards in Pennsylvania, Delaware and New Jersey. Its Advantage debit card, a Visa Debit product, is used by more than 200,000 customers. The Advantage card is also an ATM card and can be used to withdraw cash at any ATM in the MAC, MOST and NYCE systems.
 Meridian Bancorp, Inc. (NASDAQ: MRDN), a banking and financial services holding company, is based in Reading, Pa. Meridian, through its subsidiaries, operates nationally with its banking focus in 16 Pennsylvania counties and the states of Delaware and New Jersey.
 For copies of the white paper, "Debit Cards in the United States," contact Meridian Bank at 215-655-2470.
 /delval/
 -0- 3/30/93
 /CONTACT: Bob Shade of Meridian Bancorp, 215-655-2463, or Christine Reimert of The Tierney Group, 215-732-4100, for Meridian/
 (MRDN)


CO: Meridian Bancorp; Bankcard Holders of America ST: Pennsylvania IN: FIN SU: ECO

CC-MK -- PH020 -- 1135 03/30/93 14:32 EST
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Publication:PR Newswire
Date:Mar 30, 1993
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