Trends in Cash Usage

Did you know? Consumers use cash for half of all of their transactions valued at less than $50, and they choose to use cash more frequently than any other payment instrument, including debit or credit cards.1 Cash is either the most used or second most used payment instrument across a wide array of spending categories, and consumers of low-, middle-, and high-income categories all make an average of 23 cash transactions a month.

Moreover, U.S. currency is used widely as a trusted store of value, with over $1 trillion in circulation globally. The Cash Product Office (CPO) of the Federal Reserve System works closely with financial institutions, merchants, and other industry partners and conducts research to understand trends in cash use and the enduring role that cash continues to play in consumer transactions. Select an icon below to learn about a few of these programs.


It’s commonplace these days to predict the demise of cash. However, evidence from the Diary of Consumer Payment Choice, conducted in October 2012 by the Boston, Richmond, and San Francisco Federal Reserve Banks suggests otherwise.

Cash plays a dominant role for small-value transactions, is the leading payment instrument for many types of purchases, and stands as the key alternative when other options are not available.

Interested in learning more about how, where, and why consumers use cash? Read our FedNotes paper on Cash Continues to Play a Key Role in Consumer Spending: New Evidence from the Diary of Consumer Payment Choice.


Each year, the Cash Product Office’s market intelligence team interviews merchants on topics related to payment trends, including the number and volume of sales by payment instrument and developments in cash handling technologies.

Merchants provide valuable insight into the payments landscape, and the Federal Reserve uses this information to analyze shifts in merchants’ observations regarding emerging payment types and technology.

Some merchants are exploring new cash handling technologies, such as smart safes and cash dispensers. A FedNotes paper on Trends in Retail Cash Automation provides an overview of these technologies and how they are being used in financial and merchant environments.


Through our Cash Industry Partner Program, the Cash Product Office (CPO) works with financial institutions and armored carriers on joint efforts to enhance the cash supply chain.

The Cash Lifecycle video presents information about how supply chain participants work together to provide cash to the public.

The CPO also evaluates the quality of currency deposited and processed at Reserve Bank offices on a monthly basis, and we work with financial institutions to obtain periodic samples of currency from their organizations. Monitoring currency in circulation is important in ensuring that the money you use for your day-to-day transactions is genuine and fit for commerce.

If you would like to learn more about the Federal Reserve’s role in the cash supply chain, visit the website.


Public attention has focused recently on the possibility of replacing the $1 Federal Reserve note with the $1 U.S. coin. To promote increased awareness of the broader implications of such a transition, the Federal Reserve Board of Governors published a working paper on the costs and benefits to the U.S. economy and its participants, including financial institutions, armored carriers, merchants, the Federal Reserve, and government agencies.

Their conclusion? Circulating only $1 coins would cost more (in net present value terms) and be less efficient than continuing to provide $1 notes to the public. The Board’s paper identified several factors that could affect the success of a currency-to-coin transition, including note life, potential counterfeiting concerns, and societal costs.

The working paper is available on the Board of Governors’ website.

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1. Cash Continues to Play a Key Role in Consumer Spending: New Evidence from the Diary of Consumer Payment Choice FRBSF FedNotes (April 2014)

Learn More

The following articles and websites discuss the role of cash in a changing payments landscape, describe the impact of recent Federal Reserve policy and operational changes, and explore further innovations that may be needed to ensure that the cash payment system is able to adapt to fluctuating trends in consumer usage.

Is Cash-Free Really The Way To Be? Maybe Not For Millennials, NPR All Tech Considered (April 2015)

A Five-Year Glimpse Into Consumer Payment Preference, (December 2014)

Consumer Preferences and the Use of Cash: Evidence from the Diary of Consumer Payments Choice – Working Paper, FRBSF FedNotes (June 2014)

Cash Continues to Play a Key Role in Consumer Spending: New Evidence from the Diary of Consumer Payment Choice, FRBSF FedNotes (April 2014)

Trends in Retail Cash Automation: A Market Overview of Retail Cash Handling Technologies FRBSF FedNotes (March 2014)

Federal Reserve Financial Services: In Pursuit of a Better Payment System

Cash is Dead! Long Live Cash! An essay by President and CEO John C. Williams (April 2013)

Maintaining a Robust and Efficient Cash System in a Changing Landscape FRBSF FedNotes (August 2013)

What’s in your Wallet? The Future of Cash, FRBSF Economic Letter 2011-33 (October 2011)

An Analytical Framework for the Forecasting and Risk Assessment of Demand for FedCash Services Technical Paper (March 2011)