Consumers’ credit card usage has steadily increased from 2016 to 2018, rising from 18 percent to 23 percent. This year’s Diary is the first time participants reported debit cards as the most frequently used payment instrument, accounting for 28 percent of payments (Figure 1), while cash was second, used 26 percent of the time. 4 These average daily payments equate to approximately 43 payments per month, including both bill and non-bill payments. In 2018, Diary participants made an average of 1.4 payments per day, compared to the 1.3 and 1.5 payments per day diarists made in 20, respectively. Trends in Cash UsageĬash is the second most used payment instrument Finally, the Richmond Fed for their continued support of this research. From the Cash Product Office: Alexander Bau, Jonathan Bromma, Amy Burr, Ben Gold, Kelly McGuire, Margaret Riley, Steve Son, Claire Wang, and Kathleen Young. From the San Francisco Fed: Tom Flannigan, Fernanda Nechio, Louise Willard, and Justin Wray. From the Atlanta Fed: Kevin Foster, Claire Greene, Marcin Hitczenko, and Oz Shy. This paper would not have been possible without the support and contributions of the following individuals. Additional information about the Diary is available through the Federal Reserve Bank of Atlanta. Appendix A provides an overview of methodology. Section 1 details trends in cash usage Section 2 discusses how payment preferences influence the use of cash Section 3 explores cash holding by demographic cohort and Section 4 outlines payment use by transaction characteristic and merchant type. The body of this paper is structured into four sections, with each section exploring various aspects of cash usage. The use of credit cards for in-person purchases increased from 20 percent in 2016 to 25 percent in 2018. For these in-person payments, cash is used 35 percent of the time, followed by debit and credit cards at 30 and 25 percent, respectively. Lastly, the share of in-person payments declined 4 percentage points to 73 percent in 2018. While debit cards are the most popular for those 25 to 44, this group’s credit card usage has increased 9 percentage points from 2016 to 2018. Debit cards are the most popular for this age cohort, used for approximately 14 payments, or 34 percent. The share of cash use is lowest for individuals between the ages of 25 and 44 years old, who reduced their average cash usage by two payments per month. Individuals aged 18 to 25 have the highest share of cash use, 34 percent, followed by those 65 and older who report using cash for 33 percent of payments. In contrast, cash is used for approximately 10 percent of payments $25 and higher. The year-over-year decline of one cash payment between 20 was less than the two cash payment decline between 20.Ĭash continues to be used extensively for small-value purchases, representing nearly half of all payments under $10 and 42 percent of payments less than $25. The 4 percentage point decline in cash’s share of payments is largely due to two factors: 1) cash use declined to 11 payments per month, down from 12 in 2017, and 2) total payments increased from 41 to 43 transactions per month. Participants used cash for 35 percent of in-person payments In-person 2 payments accounted for 73 percent of all transactions.The share of cash use among individuals under 25 years old is the highest of any age group.Cash was used heavily for small-value payments, representing 49 percent of payments under $10.Credit cards accounted for 23 percent of payments, a 2 percentage point increase from 2017.Debit cards were the most used instrument, accounting for 28 percent of payments.Consumers used cash in 26 percent of transactions, down from 30 percent in 2017.A demographically-representative sample of 2,873 individuals participated in the study and reported all of their payments and transactions over three consecutive days, staggered throughout October 2018. The 2019 Diary of Consumer Payment Choice (Diary) highlights findings from the fifth Diary study conducted by the Federal Reserve. Download Chart Data (Excel document, 130 kb)
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