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At various points last year, a number of major banks toyed with the idea of rolling out new kinds of cards that allowed consumers to choose between debit and credit for each transaction, but now nearly all are canceling those plans and moving on.

These hybrid debit and credit cards were envisioned as a means of making up revenues lost to new regulations for debit transaction processing fees, and intended to encourage consumers to lean more heavily on credit, according to a report from American Banker. However, the cards have largely been met with consumer disinterest, and now many have scrapped plans to roll them out.

Only one major financial institution, Fifth Third Bank, has reported success for this kind of account, as its Duo card now accounts for about 25 percent of all credit cards it issues, the report said. For its part, though, the bank says it always intended the card as a way to give consumers more flexibility in spending, not to staunch losses to debit transaction fee caps.

On the other end of the spectrum is Citigroup, which is one of the nation’s largest issuers of both debit and credit cards, but seems poised to scrap the pilot test for its G2 card option, the report said. That may be the last gasp for this type of card, which will instead likely be passed over in favor of new technology.

Many experts now believe banks have more or less leapfrogged the dual-use card technology and are instead working on developing mobile wallet programs that use the same basic concept but work with customers’ existing smartphones, the report said. Further, it’s thought that banks’ efforts to make up revenues in other ways – such as scaling back debit rewards programs and adding new fees for checking accounts with debit cards associated with them – led banks to rethink their investment in dual-use cards.

“The future is really going toward mobile payments and mobile wallets,” Michael Taiano, a senior analyst at Telsey Advisory Group, told the site.

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It’s generally projected that mobile wallet use will become ubiquitous within the next two years or so, as more companies pour into the arena and make bigger efforts to push the technology.

Image: quinn.anya, via Flickr

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