This publication offers key insights and observations into the Federal Reserve System's cash practices, policies, and strategic direction.
Posted June 2019
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.
Posted November 2018
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.
Understanding Consumer Cash Use: Preliminary Findings from the 2016 Diary of Consumer Payment Choice
Posted November 2017
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.
Posted June 2017
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.
Posted November 2016
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.
Posted April 2016
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.
Posted December 2015
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.
Consumer Preferences and the Use of Cash: Evidence from the Diary of Consumer Payments Choice – Working Paper
Posted July 2014
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.
Cash Continues to Play a Key Role in Consumer Spending: Evidence from the Diary of Consumer Payment Choice
Posted April 2014
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.
Posted March 2014
Until recently, cash handling has been largely a manual and labor-intensive process. However, this has begun to change with new devices that automate certain back office cash handling functions, such as cash dispensers, recyclers, and smart-safes. Because cash usage remains strong, merchants, banks, and armored carriers are exploring ways to take advantage of these new technologies to automate their cash handling functions. This FedNotes paper provides an overview of cash handling in the financial and merchant environments, along with how these new devices are being used.
Posted August 2013
The role of paper currency in the U.S. economy is changing. While the share of payments made with cash appears to be falling, cash continues to be used widely and plays an important function as a store of value, domestically and internationally. Cash also serves an enduring role in natural or other disasters when other payment systems may not be available. These factors suggest that cash will continue to be an essential and significant part of the payment and financial system for the foreseeable future.