Consumers' use of overdraft protection
In mid-2010, an amendment was passed to Regulation E, which implements the Electronic Fund Transfer Act, requiring financial institutions to ask consumers whether or not they want overdraft protection for automated teller machine (ATM) transactions and everyday purchases made with a debit card. This Research Data Report studies the short-term impact of this amendment by examining consumers? adoption of overdraft protection, the incidence of overdrawing at least once within a 12-month period, and the incidence of paying a fee for overdrawing, before and after the opt-in rule took effect.
AUTHORS: Greene, Claire; Luo, Mi
The 2012 diary of consumer payment choice
This paper describes the results, content, and methodology of the 2012 Diary of Consumer Payment Choice (DCPC), the first edition of a survey that measures payment behavior through the daily recording of U.S. consumers? spending by type of payment instrument. A diary makes it possible to collect detailed information on individual payments, including dollar amount, device (if any) used to make the payment (computer, mobile phone, etc.), and payee type (business, person, government). This edition of the DCPC included about 2,500 participants and was conducted in October 2012. During that month, U.S. consumers on average made about two payments per day. For the month, they paid mostly with cash (40 percent of payments) and debit cards (24 percent), followed by credit cards (17 percent). For recurring bill payments, consumers most commonly used electronic payments and checks. Like other payment-value data, the DCPC data show correlations between the choice of payment instrument and the dollar value of expenditure. For example, consumers tend to use cash more often than other instruments for small-value payments. The results of subsequent editions of the DCPC are reported in separate papers.
AUTHORS: Schuh, Scott; Greene, Claire; Stavins, Joanna
The 2016 and 2017 surveys of consumer payment choice: summary results
Despite the introduction of new technology and new ways to make payments, the Survey of Consumer Payment Choice (SCPC) finds that consumer payment behavior has remained stable over the past decade. In the 10 years of the survey, debit cards, cash, and credit cards consistently have been the most popular payment instruments. In 2017, U.S. consumers ages 18 and older made 70 payments per month on average. Debit cards accounted for 31.8 percent of those monthly payments, cash for 27.4 percent, and credit cards for 23.2 percent. The SCPC continues to measure new ways to shop and pay and found that the increase in the number of purchases made online between 2015 and 2017 is statistically significant. In 2017, consumers on average made 5.6 online purchases per month, which account for 8 percent of all transactions and are up from 6.9 percent of all transactions in 2015. Use of mobile technologies continued to grow: In 2017, one-third of consumers made a mobile payment, compared with one-fourth in 2015. Compared with the findings for 2015, a greater share of credit card adopters paid their balance in full at the end of the month in 2017: 45 percent in 2017 versus 41 percent in 2015.
AUTHORS: Stavins, Joanna; Greene, Claire
The 2015 and 2016 diaries of consumer payment choice: technical appendix
This document serves as the technical appendix to the 2015 and 2016 editions of the Diary of Consumer Payment Choice (DCPC) administered by the Center for Economic and Social Research. The DCPC is a study designed primarily to collect data on financial transactions over a three-day period by U.S. consumers ages 18 and older. In this data report, we detail the technical aspects of the survey design, implementation, and analysis.
AUTHORS: Angrisani, Marco; Foster, Kevin; Hitczenko, Marcin
The 2011 and 2012 Surveys of Consumer Payment Choice: technical appendix
This document serves as the technical appendix to the 2011 and 2012 Surveys of Consumer Payment Choice. The Survey of Consumer Payment Choice (SCPC) is an annual study designed primarily to study the evolving attitudes to and use of various payment instruments by consumers over the age of 18 in the United States. The main report, which introduces the survey and discusses the principal economic results, can be found on http://www.bostonfed.org/economic/cprc/SCPC. In this data report, we detail the technical aspects of the survey design, implementation, and analysis.
AUTHORS: Foster, Kevin; Angrisani, Marco; Hitczenko, Marcin
U.S. consumers' holdings and use of $100 bills
Conventional wisdom asserts that $100 bills are often associated with crime and foreign cash holdings, leading some commentators to call for their elimination; in light of this proposal, it is useful to examine the legal, domestic use of cash. This report uses new data from the 2012 Diary of Consumer Payment Choice (DCPC) to evaluate consumer use of $100 bills as a means of payment.
AUTHORS: Schuh, Scott; Greene, Claire
Did the Target data breach change consumer assessments of payment card security?
Previous research has found that perceptions of payment security affect consumers? use of payment instruments. We test whether the Target data breach in 2013 was associated with a change in consumers? perceptions of the security of credit cards and debit cards and with subsequent changes in consumers? use of payment cards. Using data from the Survey of Consumer Payment Choice (SCPC), we find that, controlling for possible confounding effects of demographic differences between the two groups, ratings by consumers who assessed the security of personal information of debit cards shortly after the breach were lower than ratings by consumers who responded before the breach was reported. On average, the rating on the security of personal information of debit cards relative to the rating on the security of other payment instruments was 11.3 percent lower shortly after the Target breach. Based on prior research on the impact of security assessments on payment instrument use, we would expect a small (economically insignificant) decline in debit card use from this lower rating. However, we find no statistically or economically significant change in debit card use from 2013 to 2014. For credit cards, there was no difference in the ratings given by consumers who responded to the survey before the breach was reported and the ratings of those who responded after the breach was reported.
AUTHORS: Stavins, Joanna; Greene, Claire
The 2014 survey of consumer payment choice: summary results
In 2014, the average number of U.S. consumer payments per consumer per month decreased to 66.1, in a statistically insignificant decline from 67.9 in 2013. The number of payments made by paper check continued to decline, falling by 0.7 to 5.0 checks per month, while the number of electronic payments (online banking bill payments, bank account number payments, and deductions from income) increased by 0.6 to 6.9 of these payments per month. The monthly shares of debit cards (31.1 percent), cash (25.6 percent), and credit cards (23.3 percent) continued to be largest; while the share of electronic payments rose a significant 1.2 percentage points to 10.5 percent. Consumers? average cash holdings dropped by about 10 percent to $207 in 2014. The number of cash withdrawals made by consumers per month also declined by about one withdrawal per month to 5.6. There was no significant change in cash use, however. About half of 1 percent of U.S. consumers held bitcoin or other virtual currencies. The 2014 SCPC includes a formal measure of ?underbanked? consumers for the first time.
AUTHORS: Greene, Claire; Stavins, Joanna; Schuh, Scott
The 2011 and 2012 Surveys of Consumer Payment Choice
In 2012, the number of consumer payments did not change significantly from 2010 as the economy settled into steady expansion following the financial crisis and recession. After increasing by 28 percent from 2008 to 2010, cash payments by consumers fell back by 10 percent from 2010 to 2012, while the share of cash payments dropped for a third straight year to 26.8 percent. However, the number and dollar value of cash withdrawals and the dollar value of cash holdings by consumers increased in 2012. Credit and charge card payments by consumers, which declined in 2009, rebounded further, increasing by 14 percent from 2010 to 2012. The steady trend decline in paper check payments by consumers continued. Debit cards and cash continued to account for the two largest shares of consumer payments in 2012 (29.9 and 26.8 percent, respectively), but the credit share reached 21.6 percent?surpassing its highest level recorded in the SCPC in 2008. The 2011 and 2012 SCPC include methodological improvements to the measurement of prepaid cards and mobile banking and payments. In 2012, 52 percent of consumers had at least one type of prepaid card, up slightly from 2011; also in 2012, 36 percent of consumers used mobile banking and 18 percent made a mobile payment. The 2008?2012 SCPC contains results that may help researchers and policymakers identify potential indirect effects of Regulation II (the Durbin Amendment) on consumers and may help to inform the Federal Reserve?s new strategic plan for the payment system.
AUTHORS: Schuh, Scott; Stavins, Joanna
How do people pay rent?
Using data from the 2014 Boston Fed Bill Payment Experiment and the 2014 Survey of Consumer Payment Choice (SCPC), we investigate how households pay their rent. We find that the dominant methods for paying rent are cash (22 percent), check (42 percent), and money order (16 percent). Electronic methods are still rarely used, at 8 percent for bank account number payment and 7 percent for online banking bill payment, and less than 2 percent for debit and credit cards. Compared with other large bill payments of more than $200, rental payments are much more likely to be made with paper-based methods than with electronic methods and are much less likely to be automatic, despite the recent attempts by start-ups to make it easier for landlords to accept electronic payments. Check and electronic methods are more frequently used for higher-valued transactions and by those with higher income and education.
AUTHORS: Zhang, David Hao