FedNotes

Cashless coffee shops, restaurants, and convenience stores have popped up across the country. It is not illegal to refuse cash as a form of payment in most states and cities in the U.S., and going cashless helps these businesses eliminate the costs of handling and transporting cash. But do these savings come at the cost of financial inclusion? This paper explores the impacts of businesses going cashless.

In its fifth iteration, the Diary of Consumer Payment Choice data show that cash continues to be used extensively for small-value purchases – representing nearly half of all payments under $10 and 42 percent of payments less than $25. However, consumers’ use of other payment options, including debit and credit cards, is growing.

This paper explores how often U.S. consumers spent and held cash during the 2017 Diary of Consumer Payment Choice survey. Data from 2017 show that cash continues to be the most frequently used payment instrument, representing 30 percent of all transactions and 55 percent of transactions under $10.

Data from the Federal Reserve’s Diary of Consumer Payment Choice shows that cash remains the most used payment instrument in 2016 accounting for 31 percent of all consumer transactions. This study provides a unique view into consumer shopping and payment decisions, including their use of cash.

As new payments and technologies continue to emerge, cash retains a strong hold among consumers. This paper explores how often U.S. consumers held and spent cash during the 2015 Diary of Consumer Payment Choice survey, and it provides an analysis on consumers’ cash holding behavior.

As the payments landscape continues to evolve, cash remains a resilient payment instrument. The Diary of Consumer Payment Choice is one of the Federal Reserve’s primary data sources on consumer payments, and insights from the Diary provide an outlook on how consumers use cash compared to other payment instruments. When first conducted in 2012, Diary results showed that cash was the most frequently used payment instrument and its use was prevalent across all demographic groups. This paper focuses on findings and insights from the 2015 Diary and how they compare to the earlier research.

The way consumers shop today is much different than ten years ago, largely due to the proliferation of new technologies like smartphones and tablets. Today’s new methods of shopping often blur the line between “in-person” and “online” purchases and influence how consumers choose to pay for their purchases. This paper identifies five themes that describe today’s shopping experience and how this new experience may impact cash’s position in the payment landscape.

In an evolving payments landscape where card use continues to grow and occasionally cash is not a payment option, this paper explores segments of the population that resist cash’s alleged decline and continue to carry cash.

With the increase in electronic payments, it has been difficult to determine how personal preferences impact the demand for cash as a payment instrument. By analyzing data on demographics and stated payment preferences, this FedNotes paper provides evidence on the determinants of cash usage for small value payments, and particularly how consumers’ stated payment instrument preference and the amount of the purchase affect their propensity to use cash.

It’s commonplace these days to predict the demise of cash. However, evidence from the Diary of Consumer Payment Choice (DCPC) suggests that consumers choose to use cash more frequently than any other payment instrument, including debit or credit cards. 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. Using the DCPC data, this FedNotes paper explores where, how, and why people use the various payment options and highlights the key and enduring roles cash continues to play in consumer transactions.