The most recent Federal Reserve Payment Study has published data for 2024 on “core noncash payment methods used in the United States by consumers, businesses, and governments, including payments by general-purpose and private-label cards, automated clearinghouse (ACH) transfers, and checks. This release also covers ATM cash withdrawals.”
One way to summarize the results is to look at the value transferred by different method; another is look at the number of noncash payments. You would expect these to be quite different. For example, imagine a person who has their paycheck automatically deposited at their bank and has their mortgage payment made automatically by a transfer from their bank. that person might quite likely have a greater number of credit card payments and checks than those two big bank transfers, but the amount of value in the two big bank transfers could be greater than the total value of credit cards and checks.
Here’s a figure showing the value from different noncash transactions. Again, this includes consumer, business, and government noncash payments. The value of bank transfers is way up over the last 25 years or so–and in particular transfers received as a credit to bank accounts. The value of noncash payments by check is gradually falling. It’s striking to me that the total value of credit card payments looks so small in this graph.
Here’s a figure showing the number of noncash payments made by these different methods. It was unexpected to me that the number of transactions made via non-prepaid debit cards was so high: I suspect many of these debit cards make payments directly from bank accounts. Credit card payments are also up, especially since the pandemic. The fall in the number of checks is especially apparent–indeed, the number of checks is now well below the number of bank transfers. The number of banks transfers is low, although the average value of such transfers must be high to account for the figure above.
In this study, the Fed is just estimating value and volume of non-cash payments–not doing policy recommendations. But it’s important to remember that with every non-cash payment involves, some party is being paid a small amount to make that payment. When you talk about several hundred billion payments for trillions of dollars, those transactions fees received by the parties carrying out the payments can add up to large numbers.
