Fed: Use of card, ACH payments grew faster from 2015-2018 than in previous period

The latest in the Federal Reserve’s series of triennial studies on payments shows continuing, faster growth in the overall use of “core” noncash payment types – credit and debit cards, automated clearinghouse (ACH) system, and checks – than was found in the previous three-year study, according to results released Thursday.

Per-year growth in the number of core noncash payments totaled 6.7% between 2015 and 2018, according to results of the Fed’s 2019 Payments Study. That growth outpaced the 5.1% yearly growth reported in a previous study covering the period between 2012 to 2015.

“These core noncash payment types have retained their ability to be used in traditional ways even while they increasingly function as the means of settlement for innovative types of alternative payment methods and services, such as smartphone and internet-based services,” the Fed said in its release.

Not surprisingly, the use of checks continued to decline, and at a faster rate from 2015 to 2018 than during the previous three-year period studied.

Key findings in the 2019 report are:

  • The number of core noncash payments reached 174.2 billion in 2018, up 30.6 billion from 2015. The value of these payments totaled $97.04 trillion in 2018, up $10.25 trillion from 2015.
  • By value, the recent growth rate (3.8% per year) of core noncash payments was slightly higher than the growth rate of the prior period (3.6% per year).
  • Total card payments (both credit and debit), which represented 7.3% of core noncash payments by value and 75.3% by number in 2018, grew at a rate of 8.9% per year by number between 2015 and 2018 – up from the 6.8% yearly rate of increase from 2012 to 2015. Debit cards, including both prepaid and non-prepaid, were used almost twice as often as credit cards in 2018, but the value of credit card payments exceeded the value of debit card payments by almost 30%.
  • The value of remote general-purpose card payments reached $3.29 trillion in 2018, nearly equal to the value of in-person general-purpose card payments, driven in part by growing e-commerce card payments and the use of cards for recurring bill payments.
  • In-person general-purpose card payments increasingly involved chip authentication: More than half used chip authentication in 2018 compared with 2.0% in 2015.
  • Total ACH payments, comprising both credit transfers and debit transfers, grew 6.0% per year by number and 7.2% per year by value from 2015 to 2018, faster by both measures than from 2012 to 2015.
  • In 2018, for the first time, the number of ACH debit transfers (16.6 billion) exceeded the number of check payments (14.5 billion). In 2000, in contrast, the number of ACH debit transfers stood at 2.1 billion compared to 42.6 billion check payments.
  • In a return to the more accelerated decline observed from 2003 to 2012, the number of check payments fell 7.2% per year from 2015 to 2018. After increasing from 2012 to 2015, the value of check payments resumed its decline, decreasing 4.0% per year from 2015 to 2018.
  • The number of ATM cash withdrawals was 5.1 billion in 2018, a slight decline of 0.1 billion from 2015. The average value of ATM cash withdrawals continued to rise, increasing to $156 in 2018 from $146 in 2015, accordant with the continued decrease in the total number and the continued rise in the total value of ATM cash withdrawals.

The 2019 Federal Reserve Payments Study (2019 study) is the seventh in a series of triennial studies conducted by the Federal Reserve System since 2001 to estimate aggregate trends in noncash payments in the United States. The study is a collaborative effort of the Federal Reserve Bank of Atlanta and the Fed Board.

Federal Reserve payments study finds growth in card and automated clearinghouse payments