U.S. Sees Increase in Cash Payments

The latest Diary of Consumer Payment Choice, which measures payment behaviour across America, recorded a small rise in cash payments in 2021 versus 2020 alongside an increase of in-person payments.

Since 2016, the Federal Reserve has published annual surveys providing detailed insights into the payment habits of U.S. consumers. While the upturn in the share of cash payments year-on-year is modest—20 percent versus 19 percent—it is significant for being the first time an increase has occurred. Together, credit and debit card payments remain the most popular payment choice, accounting for 57 percent of total payments.

In 2021, 29 percent of in-person payments were made in cash, compared with 30 percent using debit cards and 32 percent using credit cards, with prepaid and app-based options making up the remainder.

The survey also shows cash holdings remained high in 2021 compared with prior years, ‘indicating that consumers continued to demand cash in the uncertain environment of the pandemic’s second year.’ Cash held on-person (in wallets, purses or pockets) fell from $76 in 2020 to $67 in 2021, which may suggest it is returning to around $60, which was typical from 2016 to 2019.

Households earning less than $25,000 annually (around €24,000) are noted to be especially dependent on cash, and did not change their payment behaviour during the pandemic, with the share of payments using cash versus cards remaining near identical.