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U.S. Payment Trends: Cash Payments Continue Gradual Decline

The Federal Reserve recently released its 2019 Survey of Consumer Payment Choice (Off-site), the 12th in a series of annual studies that provide a comprehensive understanding of how U.S. consumers make payments. This data complements information from the Diary of Consumer Payment Choice (Off-site), where consumers record details of specific transactions and their payment choices.

Key Findings

The survey found that U.S. consumers made an average of 69 payments per month in 2019. Debit cards were used most frequently to make payments, followed by credit cards and cash. Notably, the number of consumers paying with cash declined 2 percent year-over-year. Cash payments have gradually declined since the financial crisis.

When looking at the 69 average transactions per month, consumer payments were broken down in the following way:

  • 42 payments using debit, credit or prepaid cards
  • 18 payments using cash, paper checks and other paper instruments
  • 8 payments using electronic and other means of payment

Consumers primarily spent money to buy retail goods and pay bills. In-person purchases of retail goods accounted for the largest share of all payments, at about one-third. These payments were primarily made with debit cards, used in 38 percent of in-person purchases of retail goods, followed by cash, which was used for 30 percent of these payments. Bill pay represented 30 percent of total consumer payments overall, with two-thirds of these payments made automatically or online.

Consumers chose payment instruments depending on factors that included availability, cost and convenience. Credit cards and debit cards were rated positively for convenience and record-keeping, while cash and online banking bill pay was preferred for cost savings.

Additional payment trends among U.S. consumers include:

  • More than half of consumers used mobile banking and online. In 2019, 59 percent used mobile banking and 75 percent used online banking services.
  • Half of consumers surveyed had used or signed up for at least one online payment method, such as PayPal, Venmo or Zelle.
  • Three-quarters of consumers paid electronically from a bank account, either by using online banking bill pay or providing their bank account number to a third party.
  • Half of consumers made at least one person-to-person (P2P) payment in a month. About 4 in 10 P2P payments – often sent to friends or family members – were made with a card or electronically, likely facilitated by one of many payment apps.

The Survey of Consumer Payment Choice is a project of the Federal Reserve Bank of Atlanta. To learn more, download the complete report (Off-site) and view interactive charts (Off-site) that show payment use by transaction type, income and age.