Debit cards are set to be the most commonly used payment method, surpassing cash and credit cards, if younger generations have anything to do with it.

Debit card usage was most popular for those aged 18-34 (40 per cent), who were also high users of EFTPOS (36 per cent) and PayPal (34 per cent), according to research conducted by specialist research firm RFi.

One third of those aged 35-54 have embraced Debit cards while only one in five 55-74 year olds are using Debit.

When asked why they use Debit, 43 per cent noted convenience; 12 per cent said the low cost associated and 11 per cent used it for its speed and security.

ING Direct’s Executive Director Customer, Brett Morgan said, “It’s likely Debit cards have become more convenient due to the wide acceptance of Debit and the trend towards people using their own money – whether over the counter, by phone or online.

This is even more obvious in the past 12 months as we’ve seen an increase in online shopping due to the strong Aussie dollar.”

Credit Preferred After Cash

Despite the rapid growth of Debit cards, credit cards are still the more common form of payment, second only to cash.

Those putting purchases on credit are mostly aged 35-54 (38 per cent), followed by 55-74 years old (28 per cent) and then 18-34 years olds (27 per cent).

When asked why they use a credit card; 34 per cent noted convenience; 19 per cent did so to be rewarded with points’ schemes; and 14 per cent say paying with credit assists with cash flow.

“Credit cards can help balance cash flow but people should be wary about falling into the credit trap. Unless you’re paying off your balance each month, you could be paying high amounts of interest,” said Morgan.

Credit cards are still used for higher value purchases - averaging $148 - while Debit purchases average $93 and the average cash transaction was $35.