Cash Trends in the Modern World

These days, when we think ‘payments’ we usually think the electronic kind – cards, mobile, online. Roger Replogle (Off-site), executive vice president and cash product manager in the Federal Reserve System’s Cash Product Office (CPO), thinks about the legacy kind – cash – and its usage within the modern payments environment and among consumers.

So what role does cash play in an increasingly electronic environment? Electronic payment advancements are making strides, suggesting cash may not be ‘king’ anymore, but research shows it is still within the ‘royal family’ of payments. The CPO uses data from the Diary of Consumer Payment Choice (DCPC) to understand consumer cash use and anticipate its ongoing role in the payments landscape. We had a chance to sit down with Roger to discuss those insights.

Q: Roger, thank you for sitting down with us to discuss cash as a payment. I’m going to cut right to the chase: Is cash usage declining?

A: Cash as a payment medium is alive and well, even if it is slowly decreasing as a proportion of total payments. Cash’s share of total payments has declined, on average, 1 to 2 percentage points each year since 2015, when we began conducting DCPC studies regularly. The latest DCPC shows cash is the second most used payment instrument accounting for approximately 26 percent of all payments, and about 35 percent of in-person payments.

We are also seeing the demand for cash continue to rise, as the value of currency in circulation, at the end of 2018, was over $1.67 trillion dollars while at the end of 2015 the value was $1.38 trillion, a 17 percent increase.

Q: Why is currency in circulation still increasing despite the growing buzz and use of electronic payments?

A: There are a number of factors here. The latest payment data show cash is the most used payment instrument, and individuals – domestic and abroad – greatly value it as a store of value (savings). Additionally, as the economy continues to grow, the value of currency in circulation will continue to grow as well until or unless cash loses a much greater portion of the payments pie.

Q: So what types of consumers are using cash? It seems younger individuals are usually early adopters of technology, is it safe to assume they aren’t using cash?

A: Debit cards are the most popular payment instrument for individuals 25 to 34, and account for about one third of this age groups payments. On average, this group uses cash for about 20 percent of their payments. However, those under the age of 25 use cash for about 1/3 of their payments and cash’s share in this group has been consistent for the past 4 years.

Q: But what about online shopping? Surely that is reducing cash use or will very shortly?

A: In a word, probably. For the past few years participants have reported an increase in online payment use. Much of that increase has been an increase in online bill payments. But for non-bill payments, approximately 88 percent take place in person, and this percentage has been decreasing since 2015 by one to two percentage points each year. This suggests that online shopping is eating into cash usage by reducing opportunities to use it. But because we don’t know whether cash would have been used if these payments were in-person, I have to stick with ‘probably.’

Q: Mobile payments seem to be an emerging payment trend that is sticking around. Like online shopping, is this having an effect on cash usage?

A: It’s true, there has been an increase of individuals using their phones to make payments. In 2015 about 4 percent of payments used a mobile phone and that share increased to 8 percent in 2018, though it is important to note the majority of mobile payments use credit or debit cards to fund the payment. Interestingly, usage rates among our survey participants do not vary as much by age as one might expect. Across the 25 to 54 age cohort, we’re seeing similar use of mobile payments. Those under 25 have lower usage rates, probably because they have less access to credit and debit cards.

All that said, our research suggests this is having little effect on consumers’ cash usage. At this point, mobile payments do not appear to be a substitute for cash, but rather are replacing the card “swipe” with a card “tap” to complete a payment.

Q: Given all these electronic payment advancements, for what types of purchases is cash mostly used?

A: Cash is generally used for small value payments at a wide variety of merchant types. Cash accounts for 42 percent of payments that were less than under $10. In addition, two thirds of all cash transactions took place at merchants selling food, personal care supplies, auto related items, and general merchandise. These merchant categories make up a majority of payments in the DCPC showing cash is used for “everyday” purchases.

Q: So, in conclusion, the U.S. isn’t going cashless?

A: Our research suggests that if the US is going cashless, it won’t be anytime soon. People like cash because it is ubiquitous, near universally accepted, and settles payments instantly. They tend to rely heavily on cash during emergencies for these same reasons. It is the most used payment instrument and is the most used backup payment for those who like to use debit and credit cards. During the 2018 DCPC about 75 percent of individuals reported carrying cash on any given day and 95 percent carried cash at least one day. In addition, the average value of cash people carry on a daily basis has increased from about $50 in 2015 to about $60 in 2018.

While many countries are seeing a variety of trends (increase in mobile payments, increase in cryptocurrency use, etc.) that are eroding cash usage, preferences and payment use have been fairly consistent in the U.S. even with the advent of emerging payments. We continue to monitor how such trends may be used as substitutes for cash. In addition we continue to watch other areas (contactless cards, mobile payments, cryptocurrencies, etc.) to understand how consumer adoption may affect future payments.

To read more about cash, including trends in its usage and who is using and holding it, read the 2018 Findings from the Diary of Consumer Payment Choice (Off-site) (DCPC).

Check out the Newly Released Spring 2019 Progress Report

The Federal Reserve continues to generate momentum toward the desired outcomes outlined in the Strategies for Improving the U.S. Payment System (PDF) paper released in 2015 and built upon in the 2017 Next Steps in the Payments Improvement Journey (PDF) paper. The Spring 2019 Progress Report (PDF) released today provides an update on the latest efforts toward the desired outcomes and presents next steps and ongoing work that will contribute to making payments faster, more secure and more efficient.

The Federal Reserve conducted nearly 100 presentations in 2018 at domestic and international conferences and engaged in a wide variety of one-on-one meetings and touchpoints with payments industry stakeholders. Additionally, the Fed hosted the inaugural FedPayments Improvement Community Forum to provide rich engagement opportunities for stakeholders. It drew more than 300 diverse Community members from across the payments ecosystem to engage in dialogue about current efforts and opportunities to improve the U.S. payment system. To build on the success of the Forum, the Fed will host Community Forum Roundtables in 2019 to connect with Community members and raise awareness for payments improvement initiatives.

Watch this video for some highlights from our report:

For a detailed summary of more accomplishments, and to hear about our next steps, check out the full version of the Spring 2019 Progress Report (PDF). To stay informed on future progress towards improving the U.S. payment system and ensure that you receive updates and information as it becomes available, please join the FedPayments Improvement Community.

JUST ANNOUNCED: Members of the Fraud Definitions Work Group

Today, the Federal Reserve announced the members of the new Fraud Definitions Work Group. These industry experts will work collaboratively with the Federal Reserve on recommendations to improve the quality and consistency of ACH, wire and check fraud data.

Over 140 individuals submitted an “expression of interest” from January 24 through February 14, 2019 and the Federal Reserve selected work group members from the pool of interested candidates to help ensure diversity of thought and strong expertise across the many needed disciplines. Read the press release to see the full list of members.

Read the press release

To develop a more consistent and holistic view of terminology used to describe payments fraud the work group will:

  • Develop a recommended fraud classification model that includes detailed definitions and/or categories to help the industry better understand key data points in payments fraud; and
  • Propose a roadmap to encourage broad industry adoption of this classification model

Want to follow the work group’s progress?

Join the Fraud Definitions Community Interest Group by submitting or updating your FedPayments Improvement Community profile and selecting “ACH, Wire and Check Fraud Definitions” as a topic of interest. This will allow you to receive work group updates as well as notifications of any input opportunities.

You can learn more about this work effort and other Fed payment security priorities by visiting

Federal Reserve Payments Study: 2018 Supplement shows accelerated electronic payments growth

This Federal Reserve Payments Study (FRPS) 2018 annual supplement (Off-site) updates data on core noncash payment types and systems that support everyday payments by U.S. consumers and businesses.

Among the important findings:

  • Card payments continued to show robust growth from 2016 to 2017, collectively increasing 10.1 percent by number and 8.4 percent by value.
  • Remote payments continued to grow as a share of total general-purpose card payments.
  • Chip-authenticated payments accounted for more than half of the value of in-person general-purpose card payments in 2017.
  • Network automated clearinghouse (ACH) payments exhibited accelerating growth, increasing 5.7 percent by number and 6.9 percent by value from 2016 to 2017.
  • Large-institution check payments showed an accelerated decline of 4.8 percent by number from 2016 to 2017.

For the full Payments Study, including charts and data tables, visit the Payment Research (Off-site) page on the Board of Governors website.

Payments Security Experts Needed for New Fraud Definitions Work Group and Community Interest Group

Fraud banner Blog

The Federal Reserve is seeking payments industry leaders with specific expertise to participate in a Fed-led work effort to create ACH, wire and check fraud definitions. This new work group is the next step in the Fed’s collaborative efforts that will help develop a more consistent and holistic terminology to describe payments fraud in the United States.

We believe the benefits to be derived from this work group include an enhanced understanding of fraud trends and more consistency around the classification of fraud incidents, which can lead to improved fraud mitigation, easier collaboration for data sharing for fraud mitigation, and reduced fraud losses.

Interested in Participating?

The Fraud Definitions Work Group will be composed of 20-30 industry participants selected by the Fed who have in-depth experience related to improving ACH, wire and check fraud data quality and consistency. The Federal Reserve will select work group members from the pool of interested candidates to ensure diversity of thought and strong expertise across the many needed disciplines. If you have the required expertise and capacity to participate on this Fed-led work group, we invite you to submit an expression of interest (Off-site) by February 14.

Additional information on the desired qualifications, work group expectations, and instructions on how to express interest in joining the work group can be found on the ACH, Wire and Check Fraud Definitions webpage.

ACH, Wire and Check Fraud Definitions

The Fraud Definitions Community Interest Group is open to industry stakeholders interested in following and providing feedback on the Fraud Definitions Work Group outputs. This group of stakeholders will obtain regular updates on the work group’s progress and influence the work group deliverables.

You can join the Fraud Definitions Community Interest Group by submitting or updating your FedPayments Improvement Community profile and selecting “ACH, Wire and Check Fraud Definitions” as a topic of interest.

Join Fraud Definitions Community Interest Group

Need additional information before engaging with us – attend our January 31 webinar!

Join us for a webinar on January 31, 2019 from 3:00-4:00pm CT to learn more about these engagement opportunities and the benefits that may be realized by improving ACH, wire and check fraud data quality and consistency.

Register Today! (Off-site)

We look forward to collaborating with the industry and working towards a more consistent view of payments fraud in the United States. If you have any questions, please reach out to us at or via our social media channels.

Sean Rodriguez Embarks on His Next Quest: Retirement

Federal Reserve Faster Payments Strategy Leader Sean Rodriguez will retire from the Federal Reserve Bank effective January 4, 2019. Rodriguez, an executive vice president and 35-year veteran of the Federal Reserve, is leaving on a high note after steering multi-year collaborative industry efforts to a successful conclusion with the launch of a new industry-led organization, the U.S. Faster Payments Council (FPC) (Off-site).

“Sean was tireless in his enthusiasm and dedication to rallying diverse payments stakeholders around a vision of safe, efficient and ubiquitous faster payments in the United States by 2020,” said Federal Reserve Payments Strategy Director Dave Sapenaro. “His leadership and facilitation were instrumental in the industry coming together in an unprecedented feat of collaboration and inclusive problem solving that will now carry forward in the mission and guiding principles of the FPC.”

As Faster Payments Strategy Leader, in 2015 Rodriguez established and led the 320-member Faster Payments Task Force (Off-site) through a series of industry milestones, including the development of faster payments effectiveness criteria, an evaluation of faster payments industry solutions, and the creation of key recommendations for advancing faster payments in the United States. One of the recommendations – to establish a faster payments governance framework – became Rodriguez’s chief focus in 2018. He led 27 diverse industry stakeholders, known as the Governance Framework Formation Team (GFFT), in planning, deliberating and drafting the Operating Vision and bylaws for what is now the U.S. Faster Payments Council (Off-site).

“It’s been very rewarding to work with so many across the industry to achieve real progress in payments the past several years,” said Rodriguez. “I hope the strong collaboration among stakeholders and the Federal Reserve will continue to ensure the world class payment system we’ve collectively envisioned for our country becomes a reality.”

Earlier in his career, Rodriguez led the formation of the Federal Reserve’s Industry Relations Program and engaged payments stakeholders in the development of the Federal Reserve’s 2015 paper, “Strategies for Improving the U.S. Payment System (PDF).” This seminal work gave rise to the faster payments strategy Rodriguez led, in addition to other priorities for improving the payment system. Before this, Rodriguez spent more than a dozen years in the Customer Relations and Support Office, spearheading creation of the National Sales function and ultimately leading National Sales and Marketing for Federal Reserve Financial Services.

Rodriguez will be fondly remembered by many for his charismatic leadership, good humor, strategic focus and unrelenting drive to unite an industry around a modern payment vision, where any American can pay another, anytime, anywhere, and with near-immediate funds availability.

Starting in January 2019, Rodriguez’s role as Faster Payments Strategy Leader will be assumed by Senior Vice President and Industry Relations Director Connie Theien, who has partnered with Rodriguez to design and manage faster payments industry efforts since 2015.

Join U.S. Faster Payments Council Founders for a Webinar!

In November, the Federal Reserve announced the launch of a new membership organization, the U.S. Faster Payments Council (FPC) (Off-site), whose mission is to ensure all Americans can safely and securely pay anyone, anywhere, at any time and with near-immediate funds availability.

To learn more about this widely anticipated organization, join FPC founders for an informative webinar:

What: The New U.S. Faster Payments Council – Your Questions Answered!
When: December 5, 11:00 a.m. – Noon CT … or… December 13, 9:00 – 10:00 a.m. CT
Who: All are welcome

Register Now (Off-site)


In its July 2017 final report, the Faster Payments Task Force called upon all stakeholders to realize the vision for a payment system in the United States that is faster, ubiquitous, broadly inclusive, safe, highly secure and efficient by 2020. The task force recommended ongoing collaboration to create a faster payments governance framework, inclusive of all stakeholders, to facilitate ubiquity of faster payments.

The Governance Framework Formation Team (GFFT), a short-term work group of 27 industry participants, was appointed by the task force to fulfill its vision. Their work on a governance framework is now captured in the mission, values and structure of the new U.S. Faster Payments Council.

Ready to learn more? Register now (Off-site) for either the December 5 or December 13 webinar.

The Inaugural FedPayments Improvement Community Forum Highlights Payments Announcements and Opportunities for Community Collaboration

The FedPayments Improvement Community Forum brought together 300 attendees under a common theme: to help shape the next steps in the Federal Reserve’s initiatives to modernize the U.S. payment system.

Keynote speeches offered insight and updates on payment improvement initiatives and workshops facilitated conversations and collaboration. Relive the energy and inspiration attendees expressed in candid interviews filmed live at the Forum.

Download Forum Summary (PDF)

Workshop Summaries

Collaborate. Engage. Transform.

To learn more about the Federal Reserve’s work and participate in this historic effort to collaborate, engage and transform the U.S. payment system, join the FedPayments Improvement Community.

Thank You for Attending a Faster Payments Settlement Assessment Federal Register Notice Town Hall

Thank you to everyone who attended our town halls on the Faster Payments Settlement Assessment Federal Register Notice (Off-site). The Federal Reserve believes that industry collaboration is the foundation of any enduring strategic improvements to the U.S. payment system.

If you were unable to attend or would like to review the content covered at each town hall, we encourage you to view the slides in the town hall section of our Faster Payments Settlement Assessment page.

All comments must be formally submitted in order to be a part of the Board’s assessment. Don’t miss your opportunity to provide input on or before the December 14 deadline using one of the following channels:

  • Federal Reserve website (Off-site): Follow the online instructions (Off-site) for submitting comments.
  • Email:; include docket number OP-1625 in the subject line of the message.
  • Fax: (202) 452-3819 or (202) 452-3102.
  • Mail: Ann Misback, Secretary, Board of Governors of the Federal Reserve System, 20th Street and Constitution Avenue, N.W., Washington, DC 20551.

To learn more about the Federal Register Notice and the opportunity to submit comments, visit

Federal Reserve Announces Next Phase of Secure Payments Strategy

The Federal Reserve has served as a catalyst for change in the improvement and advancement of payments security in the United States and continues to engage with industry stakeholders. To help the Fed set priorities for collaboration with the industry to enhance end-to-end payments security, the Fed commissioned Boston Consulting Group (PDF) to assess fraud and associated costs, causes and contributing factors. In addition, Federal Reserve Payments Study data announced (Off-site) this October fostered a better understanding of fraud in the payments system. Together, these two data sources provide a comprehensive overview of payments fraud in the United States, will help educate the industry on the payments fraud landscape, and point to areas where additional work is needed.

Based on this Fed and third-party research, ongoing payments industry discussions, and recommendations of the Secure Payments Task Force, the Federal Reserve determined three common themes affecting payment security.

  1. U.S. payments fraud has continued to grow, although it remains a small fraction of overall U.S. payments
  2. Data gaps and inconsistencies across payment methods and stakeholder groups make it more difficult to assess – and address – payments fraud
  3. We are gaining insights on where fraudsters are exploiting vulnerabilities in the U.S. payment system

As announced at the inaugural FedPayments Community Forum October 3, the Federal Reserve has identified four payments security priorities for near-term action to address these themes:

  • ACH and Wire Fraud Definitions
  • Synthetic Identity Payments Fraud Mitigation
  • Remote Payments Authentication Fraud Mitigation
  • Facilitate Strategic Dialogue on Evolving Payments Security and Fraud Issues

Learn more about the Federal Reserve’s payments security efforts.