How We Pay: Results from the Federal Reserve's Latest Payments Study

Many factors influence trends in noncash payments, including technological and financial innovations, changes in consumer and business financial behavior, the business cycle, regulatory developments, and population growth. The Federal Reserve's previous payments studies--the first was conducted in 2000--revealed a number of notable trends, such as the rise in the use of debit and prepaid cards and the decline in the use of checks. The Fed recently completed its fifth triennial payments study, which showed continued changes in how businesses and consumers make payments (see chart 1 on page 22).

Chart 1 Distribution of Noncash Payments in 2012

Debit          38%
Checks (paid)  15%
Credit care    21%
Debit card     38%

Share of payments

Debit card       2%
Credit card      3%
Prepaid card     0%
Checks (paid)   33%
ACH             38%

Value of payments

Source: 2013 Federal Reserve payments study

Note: Table made from pie chart.

Taking a snapshot from three angles

The Federal Reserve Payments Study consisted of three research efforts designed to capture the current volume and composition of noncash payments in the United States:

* The Depository and Financial Institutions Payments Survey collected the number and value of noncash payments, cash withdrawals, and deposits that posted to customer accounts, and unauthorized transactions (most likely related to third-party fraud) that took place during March 2013. A total of 1,182 depository institutions provided data for the survey.

* The Networks, Processors, and Issuers Payments Surveys estimated the number and value of electronic payments in the United States for 2012. As of December 2013, a total of 196 organizations provided data, including 92 of the largest payment organizations that process automated clearinghouse EACH), credit card, debit card, and prepaid card transactions. …

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