According to the recently published The 2017 Diary of Consumer Payment Choice, Americans are big fans of tangible payments like cash, but not only: checks continue to play an important role for the US consumer, especially when it comes to settling bills.
The study, carried out by the Federal Reserve Banks of Atlanta, Boston, Richmond and San Francisco, found that cash usage has remained stable since the 2016 edition of the same report. Cash remains the most frequently used payment method by number of payments (35.6%), albeit for lower value purchases ($18.6 on average). Its demand is also growing, expressed in a positive 7.4% annual rate.
Credit cards were the most popular tool for higher value payments, reaching an average per purchase of $55.1, just in front of debit cards at $35.5. “Of the total number of payments a consumer made in October 2017, on average 30 percent involved cash. About a dozen other payment instruments accounted for the remaining 70 percent.” On average, an American consumer carries $58.9 on any given day, but only 21.7% of respondents expressed storing cash elsewhere. Of those that did have some cash stored, the average value was $738, mostly in $100 bills.
Although the adoption of alternative payment methods has been growing in the U.S., electronic payments accounted for only 8.9% of the total share – less than checks (10%). But there is a growing trend for certain payments apps, such as Venmo – owned by PayPal and used for people-to-people transactions (P2P) – and Zelle – a similar concept but run by some of the US’ largest banks.
In general, Americans seem to prefer cash and debit cards for smaller, everyday purchases, credit cards and checks for higher value goods and services while bank transfers and electronic payments are mostly reserved for settling bills. Alternative payments play an especially important role for P2P.
To access more data on the subject, download the report here, or go directly the website of the Federal Reserve.