Claire Greene, Julian Perry, and Joanna Stavins
Research Data Report 24-2
October 2024
Despite the introduction of an array of innovations and new payment options for consumers over the last decade, income and demographics remain significant predictors of payment behavior. Using data from a 2023 consumer payments diary, we find that income, age, and education are significant predictors of which payment instruments consumers adopt and use. These associations hold not only for traditional payment instruments—cards and paper—but also for innovations such as mobile apps; buy now, pay later (BNPL); and cryptocurrency. In 2023, less educated consumers were significantly less likely than other consumers to adopt any payment instrument, especially checks and electronic payments, even when we control for income and employment. After controlling for education, we find that high-income consumers used credit cards significantly more relative to other consumers. Younger and more educated consumers were most likely to adopt mobile payment apps. Women, Black and Latino consumers, and those who had filed for bankruptcy in the previous year were significantly more likely to have used BNPL. Men were nearly three times as likely as women to adopt cryptocurrency.
JEL Classifications: E41, D14, D12
Key words: Payment instruments, Consumer payments, Payment behavior
https://doi.org/10.29338/rdr2024-02
Claire Greene is center director at the Federal Reserve Bank of Atlanta. Julian Perry, is a senior research assistant and Joanna Stavins is senior economist and policy adviser, both at the Federal Reserve Bank of Boston.
The views expressed in this paper are those of the authors. They do not necessarily reflect the views of the Federal Reserve Banks of Atlanta or Boston, other Federal Reserve Banks, or the Board of Governors of the Federal Reserve System This report, which may be revised, is available on the Atlanta Fed website, atlantafed.org.