Can the Promise of Debit Cards Be Fulfilled

During the past few years, there has been dramatic growth in the use of debit cards. With this growth, a host of competition and consumer protection issues have been raised, posing important consequences for the future of the debit card and whether it can fulfill its potential to provide a safe, secure, and efficient payment system for consumers. On the competition side, debit cards have developed slowly in the United States, in part because of a lack of competition between debit card networks. Because Visa and MasterCard are primarily credit card networks, they have been slow to embrace the opportunity to develop debit card networks. Perhaps even more importantly, debit cards pose new consumer protection risks and may result in a high rate of fraud. This Article addresses the combined competition and consumer protection challenges.