When the conventional wisdom holds true, it still can be a good idea to look under the hood. Sometimes survey data confirm the conventional wisdom. That's the case with new data from the Diary of Consumer Payment Choice, which show that the use of cash for purchases and person-to-person (P2P) payments dropped in 2020. In 2019, cash was used for 31 percent of these payments while in 2020, the pandemic year, the cash share fell to 23 percent.
"Of course," you may say, "I haven't been shopping or paying others in person. And for months, I avoided handing over a payment to a retail clerk. That's why the share of cash fell." I agree, this is a completely obvious point.
Even the obvious, however, contains nuances. That's why the Talk About Payments webinar on July 13 will ask questions about factors that may underlie these data, including the following:
- What's the impact of remote purchasing on payment instrument choice?
- Were there generational differences in purchasing behavior in 2020?
- Fewer consumers carried a balance on their credit cards in 2020. Did that affect purchasing behavior?
- Are more consumers ready to use payment apps?
I hope you'll join me and Joanna Stavins from the Boston Fed alongside Shaun O'Brien from the Cash Product Office at the San Francisco Fed for the next Talk About Payments webinar, July 13, 2021, at 1 p.m. (ET). We'll chat about not only remote shopping but also other factors that could be affecting the use of cash for purchases and P2P payments.
This webinar is open to the public but you must register in advance to participate. (Registration is free.) You can register online
. Once registered, you will receive a confirmation email with login and call-in information. We hope you will join us on July 13, when you will have an opportunity to ask questions about the results of the research.
By Claire Greene, a payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed