Finovate Blog

Transactional banking is fairly straightforward. There are electronic payments, ATM withdrawals, debit card payments, credit card charges, and checks.

When a technology comes along that offers to combine three of those in a familiar form factor (plastic card), you would think it would catch quickly. 

But combined credit/debit cards have not gained much of a following yet. With one big exception: Fifth Third Bank.

In 2011, the Cincinnati-based bank, the 15th largest U.S. retail bank with $120 billion in assets, launched a combined credit/debit card called DUO. According to American Banker this week, “(DUO) has recently accounted for about 25% of new credit card accounts” at the bank.

My take: That may or may not be a large number depending on the bank’s overall card marketing efforts, but it’s a good indication that there is at least some consumer demand for the so-called hybrid card. Personally, I stopped carrying an ATM card years ago, so I would love having ATM access added to the credit cards I tote around. I would even pay a modest fee for the convenience (note 2).  

True, the mobile wallet holds the promise of combining everything into one grand app. However, it’s a long, long road to mass adoption. Seventeen years into online banking, it’s still used regularly at less than 60% of U.S. households (note 3).

So bring on the hybrid cards, but make sure there is also a killer mobile app supporting them.

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Fifth Third landing page for its combo DUO card (link)

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Notes:
1. It’s been 17 years since Web access was first launched by Wells Fargo (May 1995). Dial-up online banking predates that by more than a decade, but it was used by such a small group that it doesn’t really rate a mention.
2. “Modest” would be in the $1/mo neighborhood, unless there more features were added.
3. Source is our annual forecast (subscription, Jan 2012) which we are in the process of updating and will be available in a few days.