MasterCard Worldwide’s credit card transactions are not being cannibalized by the growth in consumer debit card use, Chris McWilton, MasterCard president of U.S. markets, today told analysts at the Credit Suisse Financial Services Forum in Miami.

“There is a myth that debit is displacing credit,” McWilton said. “Debit is growing significantly, but not at the expense of credit; it’s at the expense of cash and check.”

MasterCard’s fourth-quarter results, reported last week, showed that debit volume rose 10.4%, while credit volume shrank 7.5% (see story). 

Research MasterCard conducted last year suggests that about half of consumers use a debit card for everyday purchases such as groceries, gas and dining out, while about 11% use a credit card for those same types of purchases, McWilton said. While debit card use has climbed some 18% over the past two years for everyday purchases, the proportion of consumers using a credit card for everyday purchases is holding steady, and the use of cash for such purchases has fallen about 14%. Use of checks for everyday purchases has declined by 5%, McWilton said.

“We find it encouraging (to see) that debit is an incremental growth (area) and not simply cannibalization of existing programs,” he said.

Though the economic downturn last year caused “shock and awe” for many card issuers, so far this year MasterCard is seeing an uptick in card spending, McWilton said. Of particular interest is a rebound in luxury spending for jewelry, furniture and apparel, and healthy growth in commercial and leisure business travel, he said.

MasterCard e-commerce transaction volume was up 15.1% in January, McWilton said. E-commerce is showing “very rapid growth,” and he expects that trend to continue this year.

During the second half of last year, MasterCard saw overall card-purchase volume “coming out of the doldrums,” and it will probably be “the back half of 2010 before things get churning again,” McWilton said, expressing optimism about the chance of seeing stronger payment-volume growth this year compared with last.

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