Consumer Payment Behavior Reflects Pandemic Uncertainty, According to New Federal Reserve Report

May 18, 2021

SAN FRANCISCO – The Federal Reserve System’s Cash Product Office has released a report in its ongoing research on payment habits of the U.S. population.

Changes in payment preferences due to the COVID-19 pandemic are reflected in a surge of non-in-person payments over the past year. The use of cash appeared to rebound during the last nine months of 2020 as the nation made progress controlling infection rates. However, the pandemic’s long-term implications for consumer payment behavior are unclear. These are the key findings from the most recent Diary of Consumer Payment Choice, which is published annually by the Federal Reserve System’s Cash Product Office.

Compared to 2019, U.S. consumers in 2020 made fewer payments, specifically fewer small-value payments. Additionally, against the backdrop of a global pandemic, in-person payments dropped 19 percentage points, as compared to 2019 survey data, while not-in-person transactions surged at grocery stores, restaurant establishments, and general merchandise locations such as Walmart, Target, and Amazon. Notably, the total value of these not-in-person transactions nearly doubled in 2020. The data also appear to confirm indications from earlier surveys that the use of cash dropped precipitously in March 2020 before gradually rebounding throughout the year. However, the report’s authors caution that the pandemic’s long-term implications for consumer payment choice remain far from clear.

“2020 was a year unlike any other. Not surprisingly, it remains unclear what the pandemic’s long-term effect on consumers’ payment behavior will be,” says Roger Replogle, executive vice president of the Federal Reserve Bank of San Francisco and cash product manager of the Federal Reserve System’s Cash Product Office. “However, it is clear as ever that the U.S. needs to maintain a strong and resilient payments system, which includes supporting the U.S. cash supply chain.”

The findings from the Diary of Consumer Payment Choice report also found that in 2020:

  • Small-value payments, defined as transactions under $25, declined by 26 percent.
  • Cash use accounted for 19 percent of all payments, down seven percentage points from 2019.
  • Consumers made an average of 34 payments per month, down from 39 in 2019. The decline was mostly due to the decrease in the number of small-value payments under $25. 
  • The share of people reporting at least one in-person payment dropped to 72 percent, a 19-percentage point decline compared to the 2019 Diary. When combined with similar supplemental surveys conducted in April and August of 2020, the data show consumers sharply reduced in-person payments in April 2020, followed by a rebound in subsequent months.
  • Total not-in-person transactions increased substantially at grocery stores, food service establishments, and general merchandise locations. The total value of not-in-person spending at these merchant types nearly doubled, from approximately $110 per person in 2019 to $212 in 2020.

The Federal Reserve conducts The Diary of Consumer Payment Choice on an annual basis to understand U.S. consumers’ payment behavior and preferences. Last year, in response to the COVID-19 pandemic’s extraordinary disruptions, the CPO and Federal Reserve Bank of Atlanta also conducted supplemental consumer surveys in April and August 2020.  The annual survey occurred in October 2020, as scheduled.

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 COVID surveys described in the two recent supplement papers rely on this nationally representative sample, asking Diary participants to answer questions describing recent payment behaviors along with other questions regarding the pandemic. The Diary of Consumer Payment Choice is a collaboration between the Federal Reserve Banks of Atlanta, Boston, Richmond, and San Francisco (Cash Product Office). The CPO is jointly housed by the Federal Reserve Banks of Atlanta and San Francisco.


Marshall Eckblad
Federal Reserve Bank of San Francisco
(415) 977-3843


The Federal Reserve Bank of San Francisco, with branch offices in Los Angeles, Seattle, Salt Lake City, and Portland, and a cash processing office in Phoenix, provides wholesale banking services to financial institutions throughout the nine western states. As the nation’s central bank, the Federal Reserve System formulates monetary policy, serves as a bank regulator, administers certain consumer protection laws, and is fiscal agent for the U.S. government. Follow us on Twitter at twitter.com/sffed.