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Consumer payment survey shows continuation of pandemic trends, including rising credit card usage and enduring demand to hold cash

May 19, 2023

SAN FRANCISCO – The Federal Reserve System’s FedCash® Services (FCS) released a report from its ongoing research into the payment habits of the U.S. population. The 2023 findings from Diary of Consumer Payment Choice finds that consumer payment behavior remains consistent with the early pandemic, including a shift toward credit card payments and a slight decrease in the share of cash-based transactions. The average amount of cash held in adults’ pocket, purse, or wallet rose to $73, reflecting a recent trend of higher consumer interest in holding cash.

“We found that some of the major payment trends that started early in the Covid-19 public health emergency have continued into the pandemic’s later stages,” said Kathleen Young, executive vice president of the Federal Reserve Bank of San Francisco and chief of FedCash Services. “Consumers have continued to use credit cards – the most used payment method in 2022 – more often. Nonetheless, cash accounted for approximately 20 percent of all consumer payments since 2020, and this enduring demand indicates that there are consumers who need or choose to use cash, underscoring the need for a strong and resilient payments system.”

Key findings from this nationally representative survey highlight how consumer cash preferences changed throughout the COVID-19 pandemic:

  • The share of payments using cash declined slightly from 2020 and 2021, to 18 percent of all payments.
  • The share of in-person purchases and person-to-person (P2P) payments remained steady since 2020, at 81 percent.
  • The value of cash in a person’s wallet, purse or pocket increased by $5 compared to 2021, to an average of $73.
  • Average store-of-value holdings remained elevated compared to pre-pandemic holdings and increased slightly to $418.

About the Diary of Consumer Payment Choice

The Federal Reserve conducts The Diary of Consumer Payment Choice on an annual basis to understand U.S. consumers’ payment behavior and preferences. The annual survey occurred in October 2022, as scheduled. The Diary studies provide vital insights into how consumer payments may be changing from one year to the next. This ensures FedCash Services is fulfilling its mission of meeting demand in times of normalcy and stress, maintaining the public’s confidence in U.S. currency, and providing ready access to cash. Understanding the evolving role of cash in the economy is critical to fulfilling that mission.

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 debit and credit cards, checks, and electronic options. Diary participants also report the amount of cash on hand after each survey day, cash stored elsewhere, and cash deposits or withdrawals. The Diary data is then analyzed, including the impact of age and income on an individual’s payment behavior and preferences. This detail of the stock and flow of cash at an individual level provides insight into how consumers use cash.

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, the Federal Reserve’s primary responsibility is to maintain public confidence in the integrity and availability of U.S. currency.

FedCash Services provides strategic leadership for this key function by formulating and implementing service level policies, operational guidance, and technology strategies for U.S. currency and coin services provided by Federal Reserve Banks nationally and internationally. In addition to guiding policies and procedures, FedCash Services establishes budget guidance, provides support for Federal Reserve currency and coin inventory management, and supports business continuity planning at the supply chain level. It also conducts market research and works with financial institutions and retailers to analyze trends in cash usage.

About Federal Reserve Financial Services

Federal Reserve Financial Services is an integrated organization within the Federal Reserve that is responsible for managing critical payment and securities services that foster the accessibility, integrity and efficiency of the U.S. economy. Through its relationships with about 10,000 financial institutions nationwide, the Federal Reserve provides equitable access to a system that facilitates more than $5 trillion payments each day. Federal Reserve Financial Services, delivered via a secure FedLine® network, include FedCash Services, FedACH® Services, Check Services, Fedwire® Funds and Securities Services, the National Settlement Service and more. The Federal Reserve also collaborates broadly with payments stakeholders on improvement initiatives (Off-site), to advance the end-to-end speed, security, efficiency of domestic and cross-border payments. This collaboration led to and has informed development of the upcoming FedNowSM Service, an instant payments infrastructure launching in 2023 that will become part of the FRFS product offering.

Media Contacts:

Marshall Eckblad (Federal Reserve Financial Services) P: (773) 965-1721