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Federal Reserve consumer payment survey shows continuation of pandemic trends

The Federal Reserve System’s FedCash Services (FCS) released a report from its ongoing research into the payment habits of the U.S. population.

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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.

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