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International Journal of Economics and Financial Issues Consumers' Attitude

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 International Journal of Economics and Financial
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International Journal of Economics and Financial Issues, 2018, 8(5), 220-228.

Consumers’ Attitude towards Usage of Debit and Credit Cards:

Evidences from the Digital Economy of Pakistan

Jawaid Ahmed Qureshi1*, Sana Baqai2, Muhammad Asif Qureshi3

1
Shaheed Zulfikar Ali Bhutto Institute of Science and Technology (SZABIST), Pakistan, 2Shaheed Zulfikar Ali Bhutto Institute of
Science and Technology (SZABIST), Pakistan. 3 Universiti Uttara Malaysia, Malaysia. *Email: jawedkhanqureshi@[Link]

ABSTRACT
In the digital economy of Pakistan, banks and financial institutions are continuously engaged in efforts to launch new variants of plastic money. At
present, the debit and credit cards are widely accepted, among other forms of plastic money, as convenient mode of payment in Pakistan. This increasing
trend of debit/credit card usage is encouraging researchers to analyze the opinions of public regarding plastic card usage. This research undertaking
highlights the consumer attitude towards usage of these cards in Karachi by considering demographic factors: income, education, age, and gender
along with some attitudinal variables: perception of benefits and risks of plastic money. The data is gleaned through survey from the sample of 372
respondents of Karachi. The results reveal that monthly household income, education, and age do not have any significant impact on the plastic card
usage. Moreover, the findings uncover that males are using plastic cards more frequently than females. The inquiry confirmed that debit cards’ usage
is more than that of credit cards’ usage. Moreover, the perceived benefits and risks play a significant role in usage of debit and credit cards.
Keywords: Consumer Attitude, Debit/Credit Cards, Plastic Card Usage, Marketing of Financial Products
JEL Classifications: D12, D53, G2

1. INTRODUCTION 1.1. Plastic Money in Pakistan

Worldwide as well as in Pakistan, plastic money business is
Banks are the financial institutions play a very crucial role in nourishing very briskly, and it appears a very facilitating form of
economic growth and development of a country. The banks’ using money. Over the past decade, the Pakistani banking industry
facilitation in trade, industrial development, agricultural is undergoing a critical change from paper money to plastic
development, capital formation, credit creation, production, money. The future of this industry is progressing towards severe
transfer of money, investment, saving, and their financial advising competition due to globalization, more access to information,
services flourish the economic prosperity of country. Sound and advanced technology, and increased awareness of general
efficient payment systems through banks contribute towards public. From past several years, electronic banking is having a
smooth functioning of financial market. Banks, therefore, try to major influence on the banking industry; as the amount and the
bring in new forms of payments to make the payment system more number of transactions is showing a considerable growth pattern
secure and efficient. The introduction of plastic money is one of in Pakistan. ATM card enables a cardholder to withdraw money
the best examples of such innovative efforts by banks. Plastic by entering a personal identification number into ATM. It is used
money is a modern and convenient method for payments and doing for electronic commerce and for banking transactions, with an
transactions. This shift to digital payment system is important in added feature of bearing the name of cardholder. Deposit holders
many dimensions, like it is faster and cheaper to process, and there of any bank can get ATM debit cards. A debit card is issued by
is less risk of crime. It is a kind of ready money that reduces the banks to enable its customers to withdraw money in order to pay
risk of managing vast amount of cash. Debit cards, credit cards, for goods and services. Through this, clients do not need to go
automatic teller machines (ATM) cards, smart cards, etc. all fall to banks to withdraw cash; instead one can do it electronically.
in plastic money. Money is drawn directly from the deposit account of client at

220 International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

the time of purchase. Moreover, it can be used to pay bills for interest rates, the contract between a consumer and a bank,
shopping, hoteling, gasoline fueling, and utility bills. Nowadays, consumer behavior and attitude towards such liquidity, and the
banks are issuing ATM debit cards that possess features of both pertinent financial regulations (Carroll, 2001; DellaVigna and
ATM and debit cards. A credit card can also be used for paying Malmendier, 2004; Gabaix and Laibson, 2006; Gross and Souleles,
shopping bills, hotel bills, fuel filling bills, etc. by swiping the 2002; Stango and Zinman, 2009). These authors recognized the
card in a machine and entering the transacted amount. After the ever-escalating salience of plastic money particularly debit and
transaction is done, a copy of invoice is given to the customer as credit cards; since the advent of such cards revolutionized the
well as retained by the concerned retailer after getting signature shopping markets and retail banking as in USA and worldwide
from him/her. A customer can only use the credit card up to certain as people make transactions of billions of dollars via such cards.
credit limit assigned to him/her.
In Singapore, Gan and Maysami (2006) found that credit card
Thousands of ATMs are installed in entire Pakistan which observed selection is based on convenience, economic, and protection.
impressive growth over the period of time due to issuance of On the other hand, factors like reputation of the card and travel
plastic cards (debit cards, credit cards, ATM cards, smart cards and convenience were less important in credit card selection. By
Islamic cards) to millions of users. Since the launching of debit analyzing the demographic factors, the researchers found that the
and credit cards, the banking sector witnessed an unprecedented, people with high income and better education pay less attention
remarkable, and multifold growth due to consumers’ endorsement to economic-promotional factors while choosing the credit card.
of these cards and their associated benefits despite considering Older and married people give more weightage to convenience-
their risk factors too. Debit cards recorded the highest market protection, while Singaporean females give more value to
share amongst all other plastic cards and their transactions have promotion and males give value to economic factor.
also been incremental in terms of both volume and value, whereas
credit cards have shown slow growth as well as declining patterns Undoubtedly, if credit cards are compared to debit cards, then
over the period of time (State Bank of Pakistan, 2013; 2016; 2018). studies have shown that there are some perceived barriers that
create hindrances in the adoption of credit cards far and wide.
1.2. Problem, Purpose, Significance, and Justification Khalid et al. (2013) conducted a survey from 150 customers
At present, plastic money is like a buzz word; it has become the including both credit card holders and non-credit card holders in
convenient mode of payment for every user. Even though, in the Pakistan. The T-test results showed that some demographic factors:
developing country like Pakistan, the consumer base of plastic income, education, and age, gender, and perceptions regarding
cardholders seems to be increasing. In Pakistan, 20.72 million annual fees and high interest rates, and lack of awareness had
plastic cards were issued up to December 2012, which recorded significant influence on the usage of credit cards. Hence, it is
further growth in years ahead (State Bank of Pakistan, 2013; 2016; hypothesized that:
2018). This statistic exhibits a tremendous growth of plastic card • H1: There is an impact of income level of individuals on
users within short period of time. However, as per the authors’ consumer attitude towards usage of debit/credit cards.
search, there was no single scholarly paper published in the • H2: There is an impact of education level of individuals on
domestic context simultaneously on both debit and credit cards, consumer attitude towards usage of debit/credit cards.
while there appear very few studies on credit cards only, which • H3: There is an impact of age of individuals on consumer
substantiate a research gap. Therefore, the purpose of this inquiry attitude towards usage of debit/credit cards.
is to discover the major trends about the usage of debit/credit • H4: There is an impact of gender of individuals on consumer
cards and to examine the effect of demographic factors (income, attitude towards usage of debit/credit cards.
education, age, and gender/sex), the frequency of cards’ use, and
consumer perceptions of benefits and risks on consumer attitude In an effort of providing enhanced facilities to public, banks
towards usage of debit/credit cards. Hence, it is likely to be fruitful are introducing various other forms of plastic money like smart
for bankers and bank marketers, policy makers, consumers (or card. Al-Alawi and Al-Amer (2006) highlighted the work history
general public), and academia. to features and major benefits of smart cards by collecting 513
responses through questionnaires from university students of
2. LITERATURE REVIEW Bahrain, and found that 88% of respondents want to replace their
existing cards with smart cards.
Ample of literature has been written on the shift of payment
systems from paper money to plastic money. Stango and Zinman Additionally, some other researchers examined the effect of
(2009) conducted a study in USA and found that millions of people demographic variables on the adoption of alternative payment
are using debit and credit cards for shopping and payments. These options. Borzekowski et al. (2006) analyzed data from 800
new forms of money have enhanced their liquidity and capacity to individuals, and found that debit card usage is decreased with age
buy things, nurtured accelerated consumption patterns, and such and increased with education. They uncovered that individuals
trends have consolidated many industries and overall economy. have a tendency to increase the usage of debit cards when they
Enormous success of such cards and plastic money has been expect financial stress in their near future. Moreover, the usage is
noticed worldwide including under-developed countries. Several more common in women than men. Hence, it is hypothesized that:
authors investigated the various dimensions of liquidity and • H5: The frequency usage of debit cards is greater than that of
consumption patterns through plastic money, the price structure, usage of credit cards.

International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018 221
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

Padaruth et al. (2013) conducted a research in Mauritius and A study conducted about the economics of plastic money
concluded that customers found plastic cards as an effective including debit and credit cards concluded that price of such
mode of payment, and also they are worldwide accepted. Other cards has serious effect on their demand and sales volume
reasons for using plastic cards included: security, convenience, (Scholnick et al., 2008). Another study conducted in Austria
and time saving, as compared to cash payments. The results about the comparative analysis of debit versus credit cards usage
also revealed that plastic cards’ innovative features, consumer’s measured their impact on customer satisfaction and loyalty. It
lifestyle and status also contribute toward the usage of plastic concluded that the choice of a particular card or payment method
cards. The preference for usage of plastic cards varies according depends on the user’s personal characteristics, expectations,
to the need and perceived benefits of individuals. Durkin and desired performance of the service providers (Foscht et al.,
(2000) inferred the credit card usage by interviewing almost 2010). Zinman (2009) conducted a study on debit and credit cards
500 households in USA, and found that most of the people and explicated the salient factors including time and hassle cost
were using credit cards as source of payment and revolving concerns, security concerns, bankruptcy concerns, and reward
credit. They liked the feature of convenience with the added concerns or motives.
benefit of open-ended credit lines. Banks also play a major
role towards gaining the attention of customers for increasing Some authors conducted studies in the realm of Islamic credit cards
the use of credit cards and other plastic cards by offering and ascertained about Shariah (i.e., Islamic) compliant perspective
various schemes, such as discount deals on shopping, eating that advocates non-interest bearing financial products (Ali et al.,
out at restaurants, buying kitchen appliances, mobile phones, 2017; Kahf and Mohomed, 2016). Ali et al. (2017) investigated
etc. and other benefits. Simon et al. (2008) used the data of a about the key pertinent variables as subjective norms, attitudes,
research conducted by a private research company, Roy Morgan and financial cost in nexus with a renowned theory of consumer
Research and found that engagement in a loyalty program behavior, theory of reasoned action (TRA) that underpins the
increases the chances of using credit cards by 21%, and access relationship of attitude, subjective norms, expectations, and
to interest-free period increases the usage by 15%. Hence, it behavior as the basis of making rationale choices toward usage
is hypothesized that: of Islamic credit cards.
• H6: There is an impact of perception of benefits on consumer
attitude towards usage of debit/credit cards. Along with developed countries, developing countries are
also moving towards this dynamic shift of paperless mode of
People nowadays have become conscious about the choice of payment. Subhani et al. (2011) investigated the hypothesis on
payment method due to increased awareness and information. plastic money/credit card charisma, and the impact of usability
Kosse (2010) collected responses from 1672 Dutch customers and affordability of Plastic Money/Credit card, on its preference
through questionnaires about payment behavior at points of sale to use, from the sample of 2000 respondents from Pakistan,
(POS), the safety of POS payment instruments, the impact of India, Bangladesh, and Srilanka (500 from each nation). The
personal experiences and personal characteristics, and the impact average score of all outlined variables was measured for each
of safety perception on payment behavior. It was observed that nation and then the preference to use plastic money/credit card
cash and debit card are the main payment instruments used at the is regressed by the plastic money/credit card charisma, and its
counter. The results revealed that consumers’ assessment about usability and affordability by using multiple linear regressions
the likelihood and consequences of payment incidents strongly via split technique. The findings revealed that the average
affect the consumers’ safety perception; the higher the perceived scores were the highest for Pakistan. Though it is a question of
negative impact, the less secure they feel. matter that in Pakistani banking sector, there is ample variety
of cards; national and international cards issued by different
Several studies have also kept their focus on the consumer choice banks; nevertheless, there is stiff competition among various
of using debit cards as compared to other payment methods. banks. Therefore, individual banks have to rely on improved
King and King (2005) analyzed the reasons that why consumers customer service to better maintain the customer attention.
use debit cards over credit cards, and concluded that one of the Butt et al. (2010) collected data about the selection criteria of
reasons is fear of falling in debt on credit card, while the other credit cards from 800 cardholders and found that factors like
reason is that, consumers have a bad credit history. The inquiry also convenience, economical use, and sense of security (i.e.,  the
revealed that demographic factor like age is an important factor risk factor) appear significant from customers’ considerations in
in selection of mode of payment, because younger households selecting a credit card in Pakistan. The other risks of using debit/
(like millennials) are more willing to adopt the new technology. credit cards include (likelihood of) increase in spending pattern,
Working on the factor of household debt, Lee et al. (2007) perception of annual fees, high interest rates, lack of awareness,
deliberated about debit card usage and its impact on household and protection or security (for instance, fear of losing PIN code
debts by using simultaneous equation modeling on the data taken or technical problems) to personal bankruptcy (Butt et al., 2010;
from Survey of Consumer Finances, 2004. The results indicated Khalid et al., 2013). Hence, it is hypothesized that:
that debit card usage is negatively associated with household • H7: There is an impact of perception of risks on consumer
debt. Additionally, household composition, timesaving horizon, attitude towards usage of debit/credit cards.
attitude toward credit, credit history, education, and income were
the significant independent variables relating to household debt, The Figure  1 focuses on assessing the relationship of
whereas, age and credit card proved as insignificant variables. demographic variables with consumer attitude towards usage

222 International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

of credit/debit cards. The demographic variables taken under 4. DATA ANALYSIS AND FINDINGS
consideration consist of: Income, Education, Age, and Gender,
which are taken as categorical variables but not as moderating 4.1. Reliability and Validity Concerns
variables, since they were tested through frequency of usage The Cronbach’s alpha values for the entire variables stand between
scale. The perception of benefits and perception of risks were the ranges of (0.711 to 0.751) that imply that the scale is reliable.
also examined with consumer attitude towards usage of credit/ Moreover, factors were carefully selected from the extant literature
debit cards. and the findings are compared with those of the similar findings
to ensure reliability and validity.
3. RESEARCH METHODOLOGY
4.2. Growth Patterns of Debit and Credit Cards Usage
The research design includes positivism philosophy, deductive in Pakistan
approach, and a quantitative survey to address the research The Table 1 depicts the growth trends of plastic card holders in
problem and objectives. It employs descriptive research design Pakistan from fiscal year (FY) 2001 to 2015. This trend includes
because analyzing attitudes of consumers towards usage of debit aggregate number of card holders owning debit and/or credit cards.
and credit cards demands a quite extensive and wide research
(Bashir et al., 2017). The periodic cum secondary data regarding Figure  2 portrays an upward trend in plastic money usage. It
the number of debit and credit cards in Pakistan is extracted indicates that the number of card holders has been increasing year
from State Bank of Pakistan sources, whereas for primary data by year in Pakistan. This is a positive signal that plastic money
collection, a questionnaire survey is undertaken. The population is becoming more common and widely accepted in the country.
of Karachi is estimated to be more than 18 million people The total number of cards increased from 415,000 in FY 2001 to
(World Population Review, 2018). The samples/participants 10,520,000 in 2010, and 25,675,000 by the end of 2015, which
contained people from both genders including males and females reflects unprecedented and stupendous growth.
with diverse occupations including students cum working
professionals, businessmen, and professionals across various 4.3. Debit and Credit Card Holders in Pakistan
age brackets. Since the population is scattered, convenience The Table 2 segregates the debit and credit card holders from FY
sampling method is used. Out of 400 questionnaires distributed, 2006 to FY 2013. This data is used to compare the population of
372 forms appear useful for data analysis of this study. Pre-testing debit card holders with that of credit card holders.
of questionnaire was done on 20 questionnaires, which were
excluded from aggregate analysis. Cross-tabulation contains The Figure 3 presents the trends of debit versus credit cards. It
frequencies and percentages to analyze nominal variables. Chi- reflects that the number of debit card holders is increasing in
square test is used to analyze nominal/categorical variables and Pakistan, while that of credit card is declining. It means that attitude
T-test is applied to determine the significance of selected variables of Pakistanis is positive regarding debit card usage. On the other
(measured on interval scale) on attitude of consumers towards hand, the decreasing slope of number of credit card holders directs
usage of debit/credit cards (Cooper ans Schindler, 2013; Malhotra, that the credit card market of Pakistan does not possess much
2007; Zikmund et al., 2013). potential due to the risks consumers associate with it. The total
number of credit card holders slightly increased from 1,512,000 in
Figure 1: Conceptual framework FY 2006 to 1,613,000 in 2010, and then decreased to 1,319,000 by
the end of 2015. The total number of debit card holders increased
Income, Education, from 3,788,000 in FY 2006 to 8,140,000 in 2010, and 23,403,000
Age, and Gender Perception of Benefits Perception of Risks
by the end of 2015. These trends reflect incredible growth patterns
and flourishing digital economy. In addition, the trends portray
that in terms of growth, debit cards outperformed that credit cards.

4.4. Impact of Income-level on Debit/Credit Cards Usage

Consumer Attitude towards
Usage of Debit/Credit Cards The Table 3 contains the debit and credit cards usage frequency in
terms of income (that reflects social class as well on the basis of

Table 1: Number of card holders in Pakistan (000)

FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15
415 736 1257 1874 4257 4999 5800 6730 8900 10520 14235 17950 22317 25353 25675
Source: Annual Reports ‑ State Bank of Pakistan (2016). FY: Fiscal year

Table 2: Number of credit and debit card holders in Pakistan (000)

Description FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
Credit card holders (000) 1512 1698 1777 1664 1613 1385 1231 1088 1334 1319
Debit card holders (000) 3788 3983 4905 6395 8140 11990 15984 20267 23061 23403
Source: Annual reports ‑ State Bank of Pakistan (2016)

International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018 223
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

Figure 2: Number of card holders (000)

Source: Annual reports - State Bank of Pakistan (2016)

Figure 3: Debit and credit card holders

Source: Annual reports - State Bank of Pakistan (2016)

Table 3: Usage frequency (of both cards) and monthly household income (cross tabulation)
Description Monthly household income Total
Below 15,000 15,001–30,000 30,001–45,000 45,001–60,000 60,001–75,000 Above 75,000
Frequency usage
Less than once
Count 10 18 14 6 26 40 114
% of total 2.7 4.8 3.8 1.6 7.0 10.8 30.6
1‑3 times
Count 4 28 14 22 26 34 128
% of total 1.1 7.5 3.8 5.9 7.0 9.1 34.4
4‑6 times
Count 2 10 12 16 14 12 66
% of total 0.5 2.7 3.2 4.3 3.8 3.2 17.7
More than 6 times
Count 2 8 10 10 12 22 64
% of total 0.5 2.2 2.7 2.7 3.2 5.9 17.2
Total
Count 18 64 50 54 78 108 372
% of total 4.8 17.2 13.4 14.5 21.0 29.0 100.0

monthly income). The results uncover that most of the respondents Table 4: Chi‑Square test: Usage frequency (of debit and
lie in the range of above PKR. 75000 income bracket and their credit cards) and monthly household income
majority use these plastic cards for less than once per month. Description Value df Asymp. Sig. (2‑sided)
Pearson Chi‑square 12.834 15 0.615
Hypothesis # 01 was: There is an impact of income level of
individuals on consumer attitude towards usage of debit/credit have any significant impact on plastic card usage; therefore it is
cards. It is tested by using the Chi-Square test and the significance not necessary that persons having more income will use the plastic
of result is stated in Table 4. This proves that income does not cards more frequently.

224 International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018
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Table 5: Usage frequency (of both cards) and education (cross tabulation)

Description Education Total
Intermediate (A‑level) Bachelors Masters Others
Frequency usage
Less than once
Count 6 66 36 6 114
% of total 1.6 17.7 9.7 1.6 30.6
1‑3 times
Count 6 44 76 2 128
% of total 1.6 11.8 20.4 0.5 34.4
4‑6 times
Count 2 22 42 0 66
% of total 0.5 5.9 11.3 0.0 17.7
More than 6 times
Count 0 22 42 0 64
% of total 0.0 5.9 11.3 0.0 17.2
Total
Count 14 154 196 8 372
% of total 3.8 41.4 52.7 2.2 100.0

4.5. Impact of Education on Debit/Credit Cards Usage Table 6: Chi‑square test: Usage frequency (of debit and
This objective is measured by doing cross-tabulation analysis credit cards) and education
on education with frequency usage of debit cards and credit Description Value df Asymp. Sig. (2‑sided)
cards simultaneously. The Table  5 determines that these cards Pearson Chi‑square 12.289 9 0.198
are mostly used by respondents having masters-level education.
Nevertheless, the highest frequency of cards’ usage tends to be
1-3 times per month. revealed through Chi-Square test in Table 10 exhibited that there
is no significant impact of gender of individuals on frequency of
Hypothesis # 02 was: There is an impact of education level of debit and credit card usage per month. However the results are
significant at 10% significance level, indicating that males’ fraction
individuals on attitude towards usage of debit/credit cards. It was
is relatively higher than females in plastic cards’ per month usage
tested via Chi-Square test in Table  6 exhibited that there is no
frequency intervals.
significant impact of education and frequency of usage of both
debit and credit cards (on monthly basis).
4.8. Frequency of Usage of Debit versus Credit Cards
The Table 11 presented beneath highlights the usage ratio of
4.6. Impact of Age on Debit/Credit Cards Usage
debit and credit cards. It displays that 61.8% of sample uses
This objective is measured by doing cross-tabulation analysis
debit card only, while 15.1% uses credit card only. However,
on age with frequency usage of the both cards: debit cards and
only 23.1% are the respondents who own both debit and credit
credit cards simultaneously. Table 7 determines that plastic cards cards. This reflects that debit cards are more common than
are mostly used by respondents having age bracket of 31-36. One credit cards.
limitation of sampling here is that the majority of the participants
fall in this age bracket. This objective is also measured by doing cross-tabulation analysis
on plastic card type. The Tables 12 and 13 reckons that the use of
Hypothesis # 03 was: There is an impact of age of individuals on debit cards is greater than that of credit cards. The results portray
attitude towards usage of debit/credit cards. The results revealed that most of the respondents (i.e., 74.7%) use credit cards only less
through Chi-Square test in Table 8 exhibited that there is no than once in a month. This demonstrates that either they use credit
significant impact of age of individuals on frequency of debit and card occasionally or they do not use credit card at all. However,
credit card usage per month. for debit cards, most of the respondents (i.e., 34.4%) have pointed
to 1-3 times usage frequency per month.
4.7. Impact of Gender on Debit/Credit Cards Usage
This objective is measured by doing cross-tabulation analysis on Hypothesis # 05 was: The usage frequency of debit cards is greater
gender with frequency usage of the both cards: debit cards and than that of credit cards. The results revealed through Chi-Square
credit cards simultaneously. Table 9 determines that plastic cards test in Table  14 confirm that frequency of debit card usage is
are mostly used by respondents of the both genders: males and significantly higher than that of credit card.
females (whereas due to cultural restrictions, any other genders
are not taken as samples). Hypothesis # 06 was: There is an impact of perception of benefits
on consumer attitude towards usage of debit/credit cards.
Hypothesis # 04 was: There is an impact of gender of individuals
on attitude towards usage of debit/credit cards (i.e. such cards’ Hypothesis # 07 was: There is an impact of perception of risks on
usage by males is greater than that of females). The results consumer attitude towards usage of debit/credit cards.

International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018 225
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

Table 7: Usage frequency (of both cards) and age (cross tabulation)

Description Age Total
18‑23 years 24‑30 years 31‑36 years 37 years+
Frequency usage
Less than once
Count 10 106 158 4 278
% of total 2.7 28.5 42.5 1.1 74.7
1‑3 times
Count 0 36 18 4 58
% of total 0.0 9.7 4.8 0.5 15.1
4‑6 times
Count 4 10 6 2 22
% of total 1.1 2.7 1.6 0.5 5.9
More than 6 times
Count 0 2 14 0 16
% of total 0.0 0.5 3.8 0.0 4.3
Total
Count 14 154 196 8 372
% of total 3.8 41.4 52.7 2.2 100.0

Table 8: Chi‑square test: Usage frequency (of debit and credit cards) and age
Description Value df Asymp. Sig. (2‑sided)
Pearson Chi‑square 11.026 9 0.274

Table 9: Usage frequency (of both cards) and gender (cross tabulation)

Description Frequency usage (both cards) Total
Less than once 1‑3 times 4‑6 times More than 6 times
Gender
Male
Count 24 110 46 10 190
% within gender 12.6 57.9 24.2 5.3 100.0
% of total 6.5 29.6 12.4 2.7 51.1
Female
Count 38 116 26 2 182
% within gender 20.9 63.7 14.3 1.1 100.0
% of total 10.2 31.2 7.0 0.5 48.9
Total
Count 62 226 72 12 372
% within gender 16.7 60.8 19.4 3.2 100.0
% of total 16.7 60.8 19.4 3.2 100.0

Table 10: Chi‑square test: Usage frequency (of both cards) average of benefits considered in this study, which comprise:
and gender convenience (in carrying), safety, ease of use, time saving, and
Description Value df Asymp. Sig. (2‑sided) alleviation of cash shortage. Similarly, the average perception of
Pearson Chi‑square 7.022 3 0.071 risks variable is computed by taking the average of risks, which
are: (likelihood of) increase in spending pattern, fear of losing
PIN code, technical problems, financial charges, and personal
Table 11: Plastic card type
bankruptcy. The findings discover that the perceived benefits and
Description Frequency Percent Valid percent Cumulative
perceived risks fall highly significant variables in this research.
percent
This directs that perception of benefits and perception of risks
Valid
debit card 230 61.8 61.8 61.8 appear significant variables for consumer attitude towards usage
credit 56 15.1 15.1 76.9 of debit/credit cards.
card
Both 86 23.1 23.1 100.0 5. DISCUSSION AND CONCLUSION
Total 372 100.0 100.0
Keeping in view the stupendous growth and potential of debit
4.9. Perception of Benefits and Risks of Debit/Credit and credit cards in Pakistan and absence of published scholarly
Cards’ Usage paper in the domestic matrix (as per authors’ search, there exist
In Table 15, T-test analysis is executed to know the significance very few studies in the domestic context but only on credit cards),
of variable of average benefits and average risks. The average this probe was undertaken. The purpose of this inquiry was to
perception of benefits variable is computed by taking the discover the major trends about the usage of debit/credit cards and

226 International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

Table 12: Usage frequency of debit card and credit card (cross tabulation)

??? Frequency usage (credit) Total
Less than once 1‑3 times 4‑6 times More than 6 times
Frequency usage (debit)
Less than once
Count 62 44 6 2 114
% of total 16.7 11.8 1.6 0.5 30.6
1‑3 Times
Count 116 4 6 2 128
% of total 31.2 1.1 1.6 0.5 34.4
4‑6 Times
Count 56 6 4 0 66
% of total 15.1 1.6 1.1 0.0 17.7
More than 6 times
Count 44 2 6 12 64
% of total 11.8 0.5 1.6 3.2 17.2
Total
Count 276 56 22 16 372
% of total 74.7 15.1 5.9 4.3 100.0

Table 13: Usage frequency of debit card and credit card (cross tabulation)

Type of card Less than once 1‑3 times 4‑6 times More than 6 times Total
Debit card 114 i.e., 30.6% 128 i.e., 34.4% 66 i.e., 17.7% 64 i.e., 17.2% 372 i.e., 100%
Credit card 278 i.e., 74.7% 56 i.e., 15.1% 22 i.e., 5.9% 16 i.e., 4.3% 372 i.e., 100%

Table 14: Chi‑Square Test: Usage Frequency of Debit and Credit Cards

Description Value df Asymp. Sig. (2‑sided)
Pearson Chi‑square 56.547 9 0.000

Table 15: One‑sample test

Description Test value=0
t df Sig. (2‑tailed) Mean difference 95% confidence interval of the difference
Lower Upper
Perception of benefits 76.606 371 0.000 3.914 3.81 4.01
Perception of risks 67.683 371 0.000 3.437 3.34 3.54

to examine the effect of demographic factors (income, education, study found that majority of the population is using debit cards
age, and gender/sex), the frequency of cards’ use by gender (male as compared to credit cards. These results appear consistent
versus female), and consumer perceptions of benefits and risks with the findings of King et al. (2005) and Borzekowski et al.
on consumer attitude towards usage of debit/credit cards usage. (2006). Whereas debit and credit cards are more frequently
The method of inquiry included: a survey from 372 participants used by males than females. These results appear inconsistent
containing students cum working professionals, businessmen, with the findings of Borzekowski et al. (2006), which means
and professional males and females. Chi-square test was used the trends and practices in Pakistan differ than that of United
to analyze categorical variables and T-test was applied to check States. However, consumers have significant perception of
significance level of selected variables (measured on interval benefits of debit/credit cards, like convenience, ease of use,
scale) on attitude of consumers towards usage of debit/credit time saving, and alleviation of cash shortage. These results
cards. appear consistent with the findings of Padaruth et al. (2013)
and Simon et al. (2008). At the same time, they have significant
This probe uncovered that the trends of debit cards usage have perception about risks of debit/credit cards, like (likelihood of)
been increasing magnificently over a period of one and half increase in spending pattern, perception of annual fees, high
decade (i.e., since 2001 to 2015), whereas credit card usage has interest rates, lack of awareness, and protection or security
been slowly inclining and sometimes declining. It highlighted (for instance, fear of losing PIN code or technical problems)
that the pertinent demographic variables including income, to personal bankruptcy. These results appear consistent with
education, age, and gender do not have any significant impact the findings of Butt et al. (2010); Khalid et al. (2013); and
on consumer attitude towards usage of debit/credit cards usage. Kosse (2010). Therefore, it can be concluded that attitudinal
These results appear inconsistent with an analogous study in the variables like perceptions regarding benefits and risks are more
context of Pakistan by Khalid et al. (2013), but it focused on influential than demographic factors in determining the debit/
credit cards only and had a relatively limited sample size. This credit cards usage.

International Journal of Economics and Financial Issues | Vol 8 • Issue 5 • 2018 227
 Qureshi, et al.: Consumers’ Attitude towards Usage of Debit and Credit Cards: Evidences from the Digital Economy of Pakistan

6. RECOMMENDATIONS/IMPLICATIONS, Durkin, T.A. (2000), Credit cards: use and consumer attitudes, 1970-2000.
Federal Reserve Bulletin, 86, 623-634.
CAVEATS, AND AREAS OF FURTHER Gan, L.L., Maysami, R.C. (2006), Credit Card Selection Criteria:
STUDIES Singapore Perspective (No. 0610). Singapore: Nanyang Technological
University, School of Social Sciences, Economic Growth Centre.
Keeping in view, the overall analysis and results, it is suggested that Gabaix, X., Laibson, D. (2006), Shrouded attributes, consumer myopia,
banks should be more proactive and innovative in their offerings, and information suppression in competitive markets. The Quarterly
so that the customers may feel more comfortable and secure in Journal of Economics, 121(2), 505-540.
Gross, D.B., Souleles, N.S. (2002), Do liquidity constraints and interest
the usage of plastic money. Despite of the continuous annual
rates matter for consumer behavior? Evidence from credit card data.
increment in plastic card users, there still exists much potential
The Quarterly Journal of Economics, 117(1), 149-185.
in Pakistani market to be utilized by banks. For this reason, banks Foscht, T., Maloles C. 3rd, Swoboda, B., Chia, S.L. (2010), Debit and credit
have to make the endeavors to enhance the acceptability of their card usage and satisfaction: who uses which and why–evidence from
cards, and most importantly, they have to make their existing and Austria. International Journal of Bank Marketing, 28(2), 150-165.
potential customers aware that how beneficial and essential are Kahf, M., Mohomed, A. (2016), Credit cards: Contemporary issues
the features of plastic cards for them. from economic and Shariah perspective. Journal of King Abdulaziz
University: Islamic Economics, 29(1), 57-80.
This is a small scale study in one mega metro city, whereas there Khalid, J., Butt, H.S., Murtaza, M., Khizar, U. (2013), Perceived barriers
are also some directions for future researches. First, a similar in the adoption and usage of credit cards in Pakistan banking industry.
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Kosse, A. (2010), The Safety of Cash and Debit Cards: A Study on the
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Perception and Behavior of Dutch Consumers. DNB Working Paper,
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on usage of debit and credit cards only, but not on the smart card examination of its impact on household debt. Financial Services
or other electronic transactions like internet banking, mobile Review, 16(1), 73-87.
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