2021 Findings from the Diary of Consumer Payment Choice

General Information

2021 Findings from the Diary of Consumer Payment Choice
Kelsey Coyle, Laura Kim and Shaun O’Brien
Publication Type
Working paper
Federal Reserve System
Every October the Federal Reserve conducts an annual payment study, the Diary of Consumer Payment Choice (Diary), to better understand payment trends and habits of the U.S. population.1 This year’s Diary was conducted seven months into the COVID-19 pandemic. Given the timing of the study, the analysis shows some significant changes in consumers’ payment behavior, though it is unclear if any of these changes will persist once the pandemic has ended. As with previous Diary studies, a demographically representative sample of adults from the Understanding America Study panel were asked to participate.2 There were 1,537 participants who took part in the 2020 Diary study. Each participant was instructed to report all their transactions, including cash withdrawals and deposits, over an assigned, consecutive three-day period. All transactions are then aggregated and, unless otherwise noted, reported on a monthly, per-person basis. The high-level findings from this year’s Diary study are:

• U.S. consumers made an average of 34 payments in October 2020, down from 39 in 2019
• Cash use accounted for 19 percent of all payments, down seven percentage points from 2019
• Small-value payments, defined as transactions under $25, declined by 26 percent
• Total value spent increased from $4,236 to $4,760
• Average value of cash held in consumers’ pocket, purse, or wallet increased to $74, up $20 from 2019
• Approximately 72 percent of U.S. consumers reported making an in-person payment over their three-day reporting period, down from 91 percent in 2019
• Total spending on not-in-person, non-bill payments increased substantially at grocery stores, dining establishments, and general merchandise locations

As noted in the April and August supplemental Diary papers, consumer payment behavior changed dramatically and the pandemic continues to affect how consumers shop.3 Total payments in 2020 declined approximately eleven percent, or four total payments, compared to last year. Of the 35 total payments made in 2020, cash, debit card, and credit card payments accounted for approximately 19 percent, 28 percent, and 27 percent, respectively.