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The Federal Reserve Payments Study 2016

Noncash Payments

Taken together, debit cards (including prepaid and non-prepaid cards), credit cards, ACH credit transfers, ACH debit transfers, and checks compose a core set of noncash payment types commonly used today by consumers and businesses in the United States. These core noncash payment types are used both in traditional ways, such as in-person purchases, payroll deposits, and bill payments, and in relatively new ways, such as mobile payments, e-commerce payments, and online bill payments.

The data for 2015 as well as previous survey years show an inverse relationship between the number and value of payments across the payment types (figure 1). Debit cards held the largest share of payments by number but the smallest share by value. Credit cards were the second largest by number and the second smallest by value. At the other end of the distributions, ACH credit transfers held the smallest share by number but the largest share by value. ACH debit transfers were the second smallest by number but the second largest by value. Finally, checks now lie in the middle of both the number and value distributions.6

Figure 1. Distribution of core noncash payments by type, number, and value, 2015

Figure 1. Distribution of core noncash payments by type, number,
                        and value, 2015
Accessible Version | Return to text

Note: Debit card includes non-prepaid debit, general-purpose prepaid, private-label prepaid, and electronic benefit transfers. Credit card includes general purpose and private label. Check, automated clearinghouse (ACH) credit transfers, and ACH debit transfers include interbank and on-us.

The distribution of noncash payments in 2015 is the outcome of many decades of change, with much of the transformation of the noncash payments system migrating from one dominated by checks (by number and value) to one dominated by cards (by number) and ACH payments (by value). Much of the change has occurred in the new millennium. Just over a decade ago, checks were the predominant type of noncash payment in the United States, while one by one, starting in 2007, non-prepaid debit card, then credit card, and then ACH payments (with debit transfers and credit transfers combined) overtook checks (figure 2).

Figure 2. Trends in noncash payments 2000-15, by number

Figure 2. Trends in noncash
payments 2000-15, by number
Accessible Version | Return to text

Note: Prepaid debit card includes general purpose, private label, and electronic benefit transfer.

The number of non-prepaid debit card payments, the type of general-purpose debit card payment typically connected to transaction accounts or "checking accounts" at depository institutions, grew 12.4 billion with a value of $0.42 trillion from 2012 to 2015, which drove almost all of the growth of the broader debit card category. Total growth over the period for non-prepaid debit cards was significantly greater by number (3.0 billion more) and slightly greater by value ($0.01 trillion more) than the category’s growth from 2009 to 2012. The annual rates of growth from 2012 to 2015 were also high at 8.0 percent by number or 7.0 percent by value.

Prepaid debit card payments, including payments made by general-purpose prepaid cards, prepaid EBT cards, and private-label prepaid store cards, are the most recently introduced type of payment considered in this report.7 Growth in prepaid debit card payments dropped to an annual rate of 2.3 percent by number or 5.5 percent by value from 2012 to 2015, which are the slowest growth rates for the category in both number and value since 2000.

Credit card payments grew substantially from 2012 to 2015. The total growth of 6.9 billion in the number of credit card payments over this period exceeded each of the previous three-year study periods for credit cards since 2000 and corresponded to an annual growth rate of 8.0 percent since 2012, the largest among the core payment types.

As shown in previous study reports, much of the growth in ACH payments occurred from 2003 to 2006, when the number of checks being converted to ACH payments was growing substantially. Since that time, growth in ACH payments has slowed, although total ACH payments are estimated to have grown at an annual rate of 4.9 percent by number or 4.0 percent by value since 2012.

A previous Federal Reserve study showed that the use of checks by number had peaked in the mid-1990s.8 The five previous triennial Federal Reserve payments studies showed a persistent decline in check payments, with declines accelerating in the more recent study periods. Notable in the data for the 2016 study, however, is that the long slide of check payments appears to have tapered off somewhat, with the annual rate of decline by number dropping to 4.4 percent from 2012 to 2015 compared with 6.2 percent from 2000 to 2012. The annual number of check payments is estimated to have declined by 0.8 billion per year since 2012, in contrast to the 2000-12 period when check payments are estimated to have declined by about 1.9 billion per year.


6. Taken together, the number of ACH credit transfers and debit transfers exceeds the number of checks. Return to text

7. EBT cards are used for the disbursement of government benefits, such as funds provided to eligible, low-income individuals and families through the Supplemental Nutritional Assistance Program (SNAP). Estimates of transit and toll payments in 2015 using prepaid debit cards and other portable devices such as transponders, a significant type of prepaid payment, are not included. Return to text

8. See Geoffrey R. Gerdes and Jack K. Walton III, "The Use of Checks and Other Noncash Payment Instruments in the United States," Federal Reserve Bulletin (August 2002): 360-74, Return to text

Last update: February 16, 2017

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