2024 Findings from the Diary of Consumer Payment Choice highlight increased payments and stable demand for cash since the pandemic

May 13, 2024

CHICAGO — A new study from Federal Reserve Financial Services revealed consumers made more payments in 2023 than in previous years, continuing the trend of rising payment transactions since 2020. The 2024 Diary of Consumer Payment Choice (Diary), now in its eighth consecutive year, is a survey conducted to understand the evolving role of cash in the U.S. economy. Findings show amid increased payments, cash’s share decreased in favor of credit and debit cards, but overall cash use has remained stable as consumers continued to hold more cash than they did before 2020 as both a store-of-value (up 53%) and in their pockets, purses or wallets as a backup payment instrument (up 23%).

The findings also show a growing generational divide among those using cash versus electronic payments. Consumers younger than age 55 used cash for just 12% of payments in 2023, compared to 22% for those age 55 and older. Notably, for the first time in Diary history, cash was not the most-used instrument for smaller-value payments of $25 or less.

“The trend toward electronic payment methods observed during the COVID-19 pandemic has continued, though cash use remained stable as a payment option,” said Kathleen Young, executive vice president and chief of FedCash® Services. “The diary is helpful to our business and others in the industry to understand the long-term trends of cash usage and we continue to learn that cash is foundational to giving all consumers choice in payment. More and more cash demand is increasing as a store of value use case and holding steady post-pandemic for transactional use. This underscores the lasting need for investments in the ecosystem that support a healthy and resilient cash supply chain.”

Prior to the pandemic, consumers aged 18 to 24 used cash for about one in three payments. Starting in 2020, the ratio shifted to about one in seven payments as this population opted instead for credit and debit cards. This change in cash usage among younger demographics may carry significant long-term implications as the U.S. population continues to age.

Other key findings from this nationally representative survey include:

  • Consumers made an average of 46 monthly payments in 2023, an increase of seven payments compared to 2022.
  • Increased credit and debit card use between 2022 and 2023 resulted in more than 60% of payments per month being made with credit (32%) and debit cards (30%).
  • Consumers made an average of seven cash payments in 2023, a number that has remained stable since 2021.
  • The share of payments made with cash decreased to 16%, though it remained the third most-used payment instrument behind credit and debit cards.
  • Store-of-value cash holdings decreased to $369 in 2023 compared to $418 in 2022, though overall store-of-value holdings remains notably higher than pre-pandemic levels.
  • Consumers used mobile apps for 50% of person-to-person payments, continuing a widespread but slow consumer transition away from paper-based payments.
  • More than 90% of consumers intend to use cash as either a means of payment or store of value in the future.

Since 2016, the Federal Reserve has conducted this annual consumer survey to better understand the payment habits of U.S. consumers. Participants report all payments over a three-day period, the value of their cash holdings, payment instruments used and their preferences for various types of payments.

The 2024 Diary of Consumer Payment Choice is available on the Federal Reserve Financial Services website.

About the Diary of Consumer Payment Choice

The Federal Reserve conducts the Diary of Consumer Payment Choice survey every year to understand U.S. consumers’ payment behavior, preferences and how consumer payments change from one year to the next. The latest survey was conducted in October 2023. Understanding the evolving role of cash in the U.S. economy through the Diary studies helps ensure FedCash Services is fulfilling its mission of meeting cash demand in times of both normalcy and stress, maintaining the public’s confidence in U.S. currency, and providing ready access to cash.

Federal Reserve Financial Services uses data from the Diary to understand consumer cash use and anticipate its ongoing role in the payments landscape. By tracking consumer payment transactions and preferences annually during the month of October, Federal Reserve Financial Services compares cash with other payment instruments, such as credit and debit cards, checks and electronic payment options. Diary participants also report the amount of cash on hand after each survey day, cash stored elsewhere and cash deposits or withdrawals. Analysis of the Diary data includes the impact of age and income on an individual’s payment behavior and preferences, as well as cash stocks and flows at an individual level.

About FedCash Services

As the nation’s central bank, the Federal Reserve ensures that cash is available when and where it is needed, including in times of crisis and business disruption, by providing FedCash Services to depository institutions and through them, to the general public. In fulfilling this role, Federal Reserve Financial Services’ seeks to maintain public confidence in the integrity and availability of U.S. currency.

FedCash Services formulates and implements service level policies, operational guidance and technology strategies for U.S. currency and coin services provided by the Federal Reserve Banks nationally and internationally. In addition, FedCash Services establishes budget guidance, supports Federal Reserve currency and coin inventory management, and facilitates business continuity planning at the supply chain level. It also conducts market research and works with financial institutions and retailers to analyze cash usage trends.

About Federal Reserve Financial Services

Federal Reserve Financial Services provides payment services and seeks to foster the stability, integrity and efficiency of the nation’s monetary, financial and payment systems. It offers a comprehensive suite of payment and information services offered to financial institutions. Visit FRBservices.org® for additional information.

Media Contacts

Cassie Burica (Federal Reserve System) P: (773) 520-3622
Erica Huggins (Federal Reserve System) P: (773) 502-0269