Cash no longer US’s most popular means of payment

For the first time in the US, in 2018, cash was not the most frequently used means of payment, a new Federal Reserve report finds.

The report shows that consumers used cash for 26% of payments last year, four percentage points lower than 2017. Cash now sits just under debit cards, which rose from 26% in 2017 to 28% last year.

On average, consumers last year made 11 cash payments per month, down from 12 in 2017, while total payments increased from 41 to 43 transactions per month.

Although transactional cash usage in the US has declined, the report shows demand for US currency continued to grow roughly in line with previous years. The value of US dollars in circulation worldwide increased by 7% from 2017 to 2018, the report says.

“What the report tells us is that while usage of other forms of payment continues to grow, demand for cash remains strong, particularly for small value, in-person transactions,” said Mark Gould, cash product director of the Federal Reserve System’s Cash Product Office.

Cash continues to be used for small payments, accounting for nearly half of all payments under $10 and 42% of payments less than $25, the report says.