Trends in Cash Usage

Consumers use cash for roughly half of all 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.

In addition to being a popular payment instrument, U.S. currency is used widely as a trusted store of value, with over $1.4 trillion in circulation globally.2 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 important role that cash plays 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 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. In addition, the majority of consumer purchases take place at brick-and-mortar locations, and cash is frequently used for small-value payments.

Find out if your payment preferences reflect national trends by playing the Payment Diary Game. You can learn more by reading our FedNotes papers.


Each year, the Cash Product Office’s market analysis 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 technologies.

Some merchants are investing in 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 works with financial institutions and armored carriers on joint efforts to enhance the cash supply chain. The Cash Lifecycle video provides a behind-the-scenes look at how we work together to provide cash to the public.

The CPO also evaluates the quality of currency deposited and processed at Reserve Bank offices, 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 Cash Operations, check out the infographic on Cash in Motion.


To promote increased awareness of the broader implications of replacing the $1 Federal Reserve note with the $1 U.S. coin, the Federal Reserve Board of Governors published a working paper in 2013 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)

2. As of June 2016

Learn More

The following resources discuss the role of cash in a changing payments landscape.

Cash Connect Video: Who Holds Cash?, FRBSF (May 2016)

Shopping Experience Trends and their Impact on Cash, FRBSF FedNotes (April 2016)

Who Holds Cash? Evidence from the 2012 Diary of Consumer Payment Choice, FRBSF FedNotes (December 2015)

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)