Channel Insider content and product recommendations are editorially independent. We may make money when you click on links to our partners. Learn More.

Traditional credit card companies are fighting for their lives against a plethora of new alternatives, ranging from debit cards, non-credit-card contactless payment, cell phones, eCheck, PayPal and Bill Me Later, not to mention newfangled hybrids that merge loyalty and CRM, gift cards, incentive coupons and POS cards, such as a pilot at the Subway chain.

But they may have picked up an unlikely ally in the cyber-criminals—and the regular brick-and-mortar crooks—that are attacking their systems.

Various surveys show many of those alternative payment methods—especially debit cards and Bill Me Later—faring surprisingly well against established payment leaders.

I’ll say one thing about this gig. People just love to send me survey results. The more dubious the source, the more they like to send it: “In a survey of 29 people randomly selected (from our employee cafeteria), 94 percent of them preferred our product over the competition. When the survey was taken near salary review time, the percentage soared to 100 percent.” But I digress.

The point is that old-line credit card players have reason to sweat, especially when their direct customers—retailers—have every reason to crave seeing the alternatives do well because the interchange fees are much higher with credit cards than with almost any alternative. Swooping in for the rescue is the 21st-century Boris Badenov.

Without getting political (who me?), there are those who have argued that fear can be an effective tactic when you want people to back an otherwise-less-attractive option. Say what you will about those alternative payment methods, when your credit data is hacked and you’re being hit with identity fraud, you really want to have been using Visa, MasterCard or American Express. Of course, 99.999 percent of the time for 99 percent of the people, that is unlikely to happen.

That’s where fear comes in. Get people to focus on the calamity that is unlikely to occur and base their decision on that. It’s the principle behind most insurance policies. “If something goes wrong, you don’t always get your money back on eCheck or PayPal,” said Gartner analyst Avivah Litan. With major credit card players, customers almost always recoup all losses. Those victims will lose mountains of time and effort, but at least the dollars are likely to be credited.

As more security breaches get more coverage, that advantage may be just about all that credit card companies will have going for them.

Here’s how the top payment options stack up in terms of consumer popularity, according to a Gartner survey of 5,000 adults taken this summer and released Nov. 27. Cash still reigns supreme, at 57 percent, with PIN debit coming in second, albeit a distant second at 25 percent. Credit comes in next, virtually tied with PIN debit and garnering 24 percent. Checks are a half-notch below that, at 20 percent, with signature debit taking 14 percent and everyone else splitting a 4 percent “other” category. (Clearly, people could select more than one option, so it totals much more than 100 percent.)

But what’s more interesting is how some players fared in the Gartner survey when consumers were asked about their comfort level on a scale of one (not at all comfortable) to five (extremely comfortable). Bill Me Later—an insurancelike program offered by I4 Commerce—took the top spot at 3.9, with PayPal right behind at 3.8. Visa’s and MasterCard’s credit cards tied at 3.7, Amex was slightly less at 3.4 (possibly explained by a smaller customer base), followed by Discover credit and Visa debit (both at 3.3), MasterCard debit at 3.1 and electronic check at 2.9.

Litan said Bill Me Later pretty much amounts to store credit but the store’s not on the hook for the money, which would explain its popularity. “The fact that they even got equal rating [with established credit cards] is pretty amazing,” she said. “The credit card companies are so well-entrenched.”

Gartner also reported Nov. 27 that security fears were likely to cost e-commerce merchants some $2 billion this year, which is ironic because Gartner also reported that Web sites are a heck of a lot more secure than the POS at a typical brick-and-mortar location.

The best tactic that MasterCard, Visa and Amex can use is to bypass retailers and get consumers to insist on using that card or nothing. The fear of fraud attacks—exaggerated or not—is probably their most powerful weapon. Maybe this holiday season will see new credit card tag lines. “Master the Paranoid Possibilities”? Or perhaps “There are some rational decisions about what money can buy. For everything else, there’s MasterCard.”

Then again, Visa may have already gotten there with its latest tag line: “Enjoy Life’s Opportunities.” For Visa, a bunch of retail managers getting their laptops stolen is nothing if not a really golden opportunity.

Retail Center Editor Evan Schuman has tracked high-tech issues since 1987, has been opinionated long before that and doesn’t plan to stop any time soon. He can be reached at

To read earlier retail technology opinion columns from Evan Schuman, please click here.

Check out’s for the latest news, views and analysis on technology’s impact on retail.