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State of Cash, Diary of Consumer Payment Choice, 2015

As the payments landscape evolves, cash remains a unique, resilient, and heavily used consumer payment instrument. Still, with new payment options and ways to shop, consumers are adapting how they view and use cash. The Diary of Consumer Payment Choice (Diary) serves as the Cash Product Office’s (CPO) primary data source on consumer payment behavior. Insights from the Diary, and other data sources, help the CPO understand the role that cash will play in the future. This research helps the Federal Reserve (Fed) fulfill its objectives of maintaining confidence in U.S. currency and promoting a safe and efficient payment system.

When first conducted in 2012, the Diary showed that cash was the most frequently used payment instrument and that cash use was prevalent across all demographic groups. The key findings of the 2015 Diary of Consumer Payment Choice are similar and suggest that:

– Cash continues to be the most frequently used consumer payment instrument

– Cash is widely used in a variety of circumstances

– Cash dominates small-value transactions

– The average value of cash holdings has grown

The 2015 results also show that cash is facing competition from other payment instruments. In 2015, 32 percent of consumer transactions were made with cash, compared with 40 percent in 2012. Growing consumer comfort with payment cards and the growth of online commerce, among other factors, contribute to this trend. Nonetheless, a broad range of results suggests that cash remains resilient and continues to play a key and unique role for consumers. The first section of the paper discusses high-level, aggregate trends in cash demand and in financial institutions’ currency orders and deposits with the Fed. The second section focuses on four findings about cash use from the 2015 Diary, outlined above. The final section explores three insights that the 2015 data give us on consumer payment preferences and practices.

Cleo Turner
Cleo is DFI's CDFP coach and helps our students with the apply section of the Certified Digital Finance Practitioner (CDFP) program. As part of her role Cleo shares useful resources and insights from a wide variety of sources and authors with our community.

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