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When customers are choosing which bank to open a checking account with, they tend to focus on features like security, interest rates, customer service, and accessibility. And while debit cards come standard with the majority of US checking accounts, they aren’t a top factor customers consider when opening a checking account, despite being US adults’ top payment method. That could be a missed opportunity for banks, though. Regular interaction with debit cards — consumers use them on average 23.7 times per month — makes them a meaningful touchpoint for banks. And it might be worthwhile for issuers to tap into consumers' routine debit card usage by bolstering their debit card offerings to differentiate and lure users to their brand.

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Business Insider Intelligence spoke with Discover Head of Deposits Arijit Roy about how Discover is boosting debit card features, offerings, and incentives to attract new customers and increase engagement as a means of growing its checking segment, and the ways that could impact the firm’s overall business for years to come.    

Challenge: Discover, which is best known as a credit card company and lender, was seeing limited engagement with its checking product. In 2013, Discover launched Cashback Checking through Discover bank. Aimed at Discover cardholders, the service paid customers 10 cents per debit card purchase, online bill payment, or check, as a credit back to their Cashback Bonus credit card balance. But the service was only seeing what Roy calls “rewards enthusiast behavior”: Customers were maximizing their 10-cent gains — paying bills in multiple installments to get higher per-transaction credits, for example — but not using the service as an everyday banking product. Checking accounts come with relatively low costs of funding, according to Roy, and so finding [...]