hen making purchases in stores, U.S. consumers are using their credit and debit cards for payment more often than cash and checks; however when paying bills, they prefer to pay by check, according to the results of a new study of consumer payment preferences from the American Bankers Association and Dove Consulting.

Debit cards-growing in popularity-contributed significantly to the increased use of electronic payments. In 1999, debit cards represented only 21% of in-store transactions; today about 31% of purchases (or every one out of three) are made with a debit card, the study shows.

The study found that together, cash and checks now account for 47% of consumers' in-store purchases, compared to 57% in 1999 and 51% in 2001.

But focus on the single most frequently used method of payment in stores, and you'll find that cash is still king. Although its share in the payments mix has fallen from 39% in 1999 to 32% in 2003, cash is still the number one way to pay-with more than 32% of consumers using their greenbacks in stores.

Consumers pay by check for only 15% of in-store purchases, but still prefer to pay bills with them. However, electronic methods such as automatic payment and online bill payment are increasing in popularity.

Sixty percent of consumers use some form of automatic payment and 41% of consumers use online bill payment-it represents one of the fastest growing payment methods. "As consumers write fewer checks for bill payments, financial institutions and payment organizations have the ability to play an active role in influencing what payment methods are used in their place," Tony Hayes, Managing Director of Dove's Financial Services Practice and author of the study said in a statement.

ACI Worldwide, eFunds Corp. and PULSE EFT Association sponsored the research. More than 2,000 people responded to the survey.