This report was elaborated by the Cash Product Office (CPO) of the US Federal Reserve and is based on figures from the 2015 Diary of Consumer Payment Choice, a survey designed to study US consumers’ payment behaviours and preferences.
Among the key findings, the report shows that the demand for cash is constantly increasing for all denominations since 1980, and especially for high denominations since the 2008 financial crisis. Indeed, cash was still the most frequently used payment instrument in 2015 and accounted for 32% of all transactions. Cash was also reported to be the preferred backup payment method by 55% of participants.
Nevertheless, cash is rather used for small-value purchases in comparison to e-payments that are made less frequently but for higher amounts. As a result, cash only accounted for 9% of total transactions value last year. The report also predicts that cash usage might decline in the future if merchants increase their online presence and if the shift toward mobile apps continues.
Besides, figures indicate that there has been a significant change in how people are handling cash. Indeed, the gap registered by the Fed between payments and receipts since 2009 suggests that people are hoarding more banknotes than before, probably to protect themselves from future economic downturns.
Please click here to read CPO's report.