Monday, May 16, 2022
In October 2021, the monthly average number of cash payments per consumer increased to seven, from six one year earlier, according to 2022 Findings from the Diary of Consumer Payment Choice. This marked the first time the San Francisco Fed recorded an increase in cash usage since the diary was launched in 2016.
In 2015, nearly a third (31 percent) of monthly consumer payments were made with cash. "The 2021 increase after [a] seven-percentage-drop in cash share in the first Covid-19 year could imply that consumers' transactional use of cash may have reached its floor during the pandemic," wrote Emily Cubides, an analyst at the San Francisco Fed, and Shaun O'Brien, a San Francisco Fed economist.
Consumers continued to use credit and debit cards for a majority of payments, accounting for 57 percent of monthly payments for the average consumer in 2021, compared to 55 percent in 2020 and 54 percent in 2019.
A new report from Fiserv, meanwhile, revealed that rewards are a driving force behind many consumers' payment choices, especially older and financially secure consumers. The report, 2022 Expectations & Experiences: Card Credit and Consumer Control, draws on a November 2021 survey of just over 3,000 consumers conducted by The Harris Poll.
Among respondents with credit cards, nearly seven out of 10 (68 precent) have more than one card, with 90 percent stating they have a go-to card they use most often. And for most the go-to card is the one with the best rewards; among those earning more than $150,000, 80 percent prefer rewards cards.
Younger consumers, however, aren't as taken with rewards. Nearly four in 10 (37 percent) Gen Z consumers with multiple credit cards, for example, prefer to use just one because they consider it too much of a hassle to manage multiple card accounts.
Similar generational differences were apparent in preferences for credit and debit cards when making large-dollar (over $500) purchases. Among baby boomers and seniors, 66 percent prefer credit cards for large in-store purchases, and 73 percent prefer credit cards for similar online purchases. Not so for Gen Z; 46 percent choose debit for large in-store purchases, and 49 percent choose debit for online purchases.
"Credit and debit card usage among consumers remains robust, with each generation displaying unique habits and preferences when it comes to card choice and management," said Himanshu Patel, co-head of banking at Fiserv.
These are some of the places consumers of all ages are most likely to pull out a card instead of cash, based on Fiserv's Harris Poll: restaurants (75 percent); grocery stores (75 percent); and sporting and concert venues (77 percent). 
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