Federal Reserve Payments Study Finds Effects of the Pandemic in US Payments
December 27, 2021
It's the week before the New Year, and we promised not to post this week. But I can't resist letting you know that a new
report from the Federal Reserve Payments Study reports quarterly data related to the effects of the COVID-19 pandemic on
US payments. This is interesting and important news, so I'm breaking the holiday hiatus.
Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study, on the Federal Reserve's website, includes new information about core noncash payments and some evolving areas of payments:
- While data from 2019 largely show a continuation of past payment trends, with card and ACH both gaining share at the expense of check, 2020 data show that payment behavior changed sharply with the COVID-19 pandemic, with ACH gaining substantially as a share of noncash payments by both number and value.
- The share estimates combined with other information imply that ACH was the only one of the three core payment systems to grow by number in 2020.
- The total number of card payments declined in 2020, driven by a marked decline of in-person card payments. This was the first annual decline in the number of card payments recorded by the payments study.
- As in-person card payments dropped in spring 2020, remote card payments took up much of the slack. Later in the year, in-person card payments recovered somewhat.
- The pandemic may have helped spur growth of innovative payment methods, such as in-person contactless card,
digital wallet, and person-to-person (P2P) payments.
- First-time use of bank-sponsored P2P payments spiked in the second quarter of 2020, a time of business closures and stay-at-home orders.
- First-time use of digital wallets was highest in the third quarter, when some restrictions on in-person shopping were lifted. When used with a mobile device, a digital wallet provides a low-touch option for in-person card payments.
The report covers card (credit, non-prepaid debit, and prepaid debit), ACH, and check payments.
Go to the Federal Reserve's website to see other findings.
Happy new year! We look forward to continuing the payments conversation with you in January 2022!