Annual Fed report shows more transactions made in-person with cash than debit or credit

November 19, 2018

Cash remains the most frequently used payment instrument in the nation, according to a new report out of the Federal Reserve’s Cash Product Office. The 2017 Diary of Consumer Payment Choice found cash payments made up 30 percent of payments last year, more than any other payment instrument. Debit cards were used 27 percent of the time while credit cards made up 21 percent of payments.

Despite the growth of online transactions, consumers continued to make more than three-quarters of payments in person. When bill payments are excluded from total transactions, the 2017 share of in-person transactions stood at 90 percent. Of those in-person payments, 39 percent are in cash.

The report also found:

  • Cash continued to be used predominately for small-value purchases, accounting for 55 percent of all payments under $10 and 32 percent of payments between $10 and $24.99. Half of payments over $100 were paid via check or electronically.
  • Individuals in households that earn less than $25,000 used cash in 47 percent of transactions, whereas those individuals in households that earn between $100,000 and $124,999 used cash in 24 percent of their transactions.

Overall, cash use declined slightly from the last report in 2016, when it made up 31 percent of all purchases. Credit card usage increased the most among payment instruments, going from 18 percent in 2016 to 21 percent last year. The three percentage point increase in credit card usage does not correspond with a three percentage point decline in cash or debit.

About the Diary of Consumer Payment Choice

The Diary is a survey designed to study payment behaviors using a nationally representative sample of U.S. consumers. Participants are asked to record information on all transactions – purchases, bill payments, deposits, withdrawals, etc. – conducted during assigned, overlapping consecutive three day periods. The Diary of Consumer Payment Choice is a collaboration of the Federal Reserve Banks of Atlanta, Boston, Richmond, and San Francisco (Cash Product Office). Insights from the Diary help the Federal Reserve System’s Cash Product Office understand consumer cash use, anticipate its ongoing role in the payments landscape, and help the Cash Product Office fulfill its mission, which includes formulating and implementing service level policies, operational guidance, and technology strategies for U.S. currency and coin services both nationally and internationally.

Tom Flannigan
Federal Reserve Bank of San Francisco
(415) 974-2553

The Federal Reserve Bank of San Francisco (SF Fed) serves the public by promoting a healthy, sustainable economy, and supporting the nation’s financial and payment systems. With offices in Los Angeles, Seattle, Salt Lake City, Portland and Phoenix, the Bank serves the Twelfth Federal Reserve District, which includes one-fifth of the nation’s population and represents the world’s fourth-largest economy. As part of the nation’s central bank, the SF Fed informs monetary policy, regulates banks, administers certain consumer protection laws and acts as a financial partner to the U.S. government.