According to the survey, customers who had debit cards used them for nearly a third (29%) of all their purchases under $20 - a 61% increase since 2001 - while this group's cash payments for the same amount declined by nearly 15%.

The study indicates that debit cards have made significant inroads into 'small-ticket' categories that have traditionally been the exclusive domain of cash.

Among users, debit cards are the most popular payment method for purchases between $20 and $100. In the the $20 - $50 category, debit payments account for more than half (55%) of all purchases, a 31% increase since 2001. Consumers' preference for cheques and cash declined by 50% and 18% respectively, during the same period.

In the $50 - $100 category, debit cards were used for 52% of all purchases, compared with 47% in 2001. Cheque continued to decline to 12%, compared with 25% in 2001, while cash use remained unchanged at 9%.

Richard Lyons, SVP, deposit access group, MasterCard, comments: "Debit's increasing penetration of purchase categories that were previously the exclusive domain of cash and checks clearly shows that consumers prefer the convenience and flexibility of debit plastic over paper for everyday usage occasions."

The MasterCard study also found significant growth in the use of debit cards for lower-ticket purchases at cinemas, fast food restaurants and quick-stop convenience stores as well as at higher-ticket establishments including restaurants and doctors' offices.

Half of the cardholders surveyed said debit was "better than other payment methods," including cash and cheques, and 41% cited convenience as the primary advantage of the cards.