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RESEARCH & ANALYSIS

Developments in Noncash Payments
for 2019 and 2020: Findings from
the Federal Reserve Payments Study
December 2021

The Federal Reserve Payments Study (FRPS) collects data to document trends
and developments in U.S. payments. This brief is the first report since the

Contents
Quarterly Data Were Collected
for the First Time

detailed release of 2018 data. It provides new findings for 2019 and 2020,
the latter year reflecting effects of the global COVID-19 pandemic, on pay-

Key Findings

ACH Gained Share Over Card
and Check

Growth in Card Payments Stalled
in 2020

2020 Saw Continued Adoption of
New Ways to Make Payments

Conclusion

Contact

Appendix

ments processed over general-purpose credit and debit card networks,
including non-prepaid and prepaid debit card networks; the automated clearinghouse (ACH) transfer system; and the check clearing system. These payment systems—card, ACH, and check—form the core of the noncash payment
and settlement systems used to clear and settle everyday payments made by
consumers and businesses in the United States today. Results include estimates of payment shares based on information collected from large depository institutions in the Depository and Financial Institutions Payments Survey
(DFIPS). Results also include nationally representative totals for cards from
the Networks, Processors, and Issuers Payments Surveys (NPIPS).
The global COVID-19 pandemic has had a broad impact on social and economic conditions in the United States and around the globe. The pandemic’s
effects also extended to U.S. payments systems as industries responded to
changes in supply and demand and as various social distancing considerations affected payment behavior. For example, some consumers and businesses adopted new payment technologies or increased their use of remote
payment options as a result of increased tendencies to work or shop
from home.

Quarterly Data Were Collected for the First Time
As in the past, the surveys collected annual data, and the effects of the pandemic can be seen by comparing 2020 estimates with those for previous
years, such as in the shares of cards, ACH, and checks at large depository
institutions from the DFIPS or in volumes for cards from the NPIPS. To study
how the use of payments changed as the pandemic affected people’s lives
and behaviors, the 2020 surveys also collected quarterly data. The quarterly
data allow estimates of within-year changes in the adoption of new payment
B O A R D O F G OV E R N O R S O F T H E F E D E R A L R E S E RV E S Y S T E M

w w w. f e d e r a l r e s e r v e . g ov

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

technologies, specifically digital-wallet-based card payments and bank-sponsored person-to-person
(P2P) payments from the DFIPS and estimates of total in-person card payments (including contactless card payments) and remote card payments (including e-commerce) from the NPIPS.

Key Findings
• While data from 2019 largely show a continuation of past payment trends, with card and ACH
both gaining share at the expense of checks, payment behavior changed sharply in 2020 with
the COVID-19 pandemic, with ACH gaining substantially as a share of noncash payments by
both number and value.
• The share estimates combined with other information imply that ACH was the only one of the
three core payment systems to grow by number in 2020.
• The total number of card payments declined in 2020, driven by a marked decline of in-person
card payments. This is the first annual decline in the number of card payments recorded by
the FRPS.
• As in-person card payments dropped in spring of 2020, remote card payments took up much of
the slack; later in the year, in-person card payments recovered somewhat.
• The pandemic may have helped to spur growth of innovative payment methods, such as
in-person contactless card, digital wallet, and P2P payments.
– First-time use of bank-sponsored P2P payments spiked in the second quarter of 2020, a time
of business closures and stay-at-home orders.
– First-time use of digital wallets was highest in the third quarter, when some restrictions on
in-person shopping were lifted. When used with a mobile device, a digital wallet provides a
low-touch option for in-person card payments.

ACH Gained Share Over Card and Check
In recent years, the FRPS has collected data for a sample of the largest depository institutions by
deposit size through annual surveys.1 The annual DFIPS large institution samples supplement the
more extensive representative samples of depository institutions collected every three years. For
this brief, the large institution data were used to estimate changes in the shares of payments
among card, ACH, and check for 2018 to 2019 and for 2019 to 2020 (figure 1). These estimates
provide insight into changes in the composition of payments that have occurred since 2018, the

While the payment volumes are dominated by those reported by large commercial banks, the samples of large depository institutions also include data from the largest savings institutions and credit unions.

ACH Gained Share Over Card and Check

Figure 1. Changes in the shares of noncash payments, 2018–19 and 2019–20

Number
3

Value
3

Percentage points

2
1.38

2.45

1.11

0.75

0.38

0.30

0.38

0
−0.39

−1

−1.06 −0.99

−2

-1
−1.49

-2

−3

-3
Card

ACH

Check

−2.83

Card
2018–19

ACH

Check

2019–20

Note: Percentage points indicate the change in the share (measured as a percentage of the sum of the three categories) from one year to the next. Figures may not net to zero because of rounding.
Source: DFIPS (large institutions).

year for which the last nationally representative sample-based estimates for card, ACH, and check
are available from the DFIPS.2
Estimates from the large depository institution data show that ACH was the only payment and
settlement system among the three to grow in share by number in both the 2018 to 2019 and
2019 to 2020 periods. In fact, the share of ACH grew more by number and value from 2019 to
2020 (during the pandemic) than from 2018 to 2019 (before the pandemic). By contrast, the
share of card by number grew a small amount from 2018 to 2019 and declined, though by a
smaller amount, from 2019 to 2020, while the share of card by value grew by small and roughly
equal amounts in the two periods. The share of checks by number fell roughly the same amount
from 2018 to 2019 and 2019 to 2020, while the share of checks by value fell more in the latter
period (during the pandemic) than in the former (before the pandemic).
The share estimates by themselves do not imply growth or decline in totals for the three core payment systems. The estimates combined with other information, however, imply that ACH was the
only one of the three core payment systems to grow by number from 2019 to 2020. In particular,
the 2019 to 2020 decline in the estimated share of cards by number is consistent with the concurrent decline in the total number of card payments from the NPIPS, as documented later in this
brief. Similarly, the increase in the share of ACH by number from 2019 to 2020 is consistent with
a concurrent increase in publicly available figures for ACH network volume. Finally, the steeper
2

See the Federal Reserve Board’s website for the 2019 Federal Reserve Payments Study, Detailed Data Release
(October 2020), available at https://www.federalreserve.gov/paymentsystems/fr-payments-study.htm.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

decline in the share of checks relative to cards from 2019 to 2020 implies that the total number
of checks also declined.

By Number, Card Payments Were the Most Used of Noncash Payments
To examine the potential implications of these

Table 1. Shares of noncash payments,
2018–20
Number
2018
Total

2019

patterns for aggregate payment shares, the
estimated share changes for large depository

Value
2020

2018

2019

2020

100.00 100.00 100.00 100.00 100.00 100.00

institutions over the 2018 to 2020 period can
be applied to the shares associated with the
previously published 2018 total estimates

Card

73.88

74.64

74.25

7.08

7.45

7.84

ACH

17.56

17.87

19.24

65.69

66.80

69.25

(table 1). After exhibiting the highest absolute

8.55

7.50

6.51

27.23

25.74

22.91

growth in number of payments for more than a

Check

Note: Figures may not sum because of rounding.
Source: DFIPS 2018 (all institutions); DFIPS 2019–20 (large
institutions).

decade, as well as the highest growth rate,
card payments have become the dominant
type of noncash payments by number,
accounting for 73.88 percent of all such pay-

ments in 2018. The value share of card payments, on the other hand, was 7.08 percent in 2018,
reflecting the smaller average value of card payments compared with the other two payment
systems.
From 2018 to 2020, growth in the shares for card payments was quite small by number and by
value compared with past trends. The estimated share of card payments by number increased by
just over one-third of a percentage point, reaching 74.25 percent in 2020. The share of card payments by value increased slightly more over the two years, rising by just over three-quarters of
a percentage point to 7.84 percent in 2020.
Considering the time ranges separately, the share of card payments by number rose from 2018 to
2019 and then fell from 2019 to 2020, while card payments by value exhibited slow but steady
growth in share in both periods. Changes in card shares, both increases and decreases, were
quite small in both years. The decline in share by number from 2019 to 2020, 0.39 percentage
point, is notable nevertheless because this was the first decline detected in card share by number
since the first FRPS estimates for 2000.

ACH Shares Grow Rapidly
The shares of ACH transfers by both number and value grew from 2018 to 2019, and the growth
in shares accelerated from 2019 to 2020. ACH has long dominated the core payment systems by
value, but recent increases in the ACH share by number were unusually rapid.

ACH Gained Share Over Card and Check

The share of ACH transfers by value reached 69.25 percent in 2020, having grown 1.78 percentage points per year since 2018. That rise was similar to the rise in ACH share of 1.80 percentage points per year from 2015 to 2018. The rise in shares for ACH is consistent with the rise
in ACH network volumes in data released by NACHA, which show that the number and value of payments on the ACH network, representing the majority of ACH payments, both grew substantially
from 2018 to 2019 and from 2019 to 2020.3
By number, the share of ACH reached 19.24 percent in 2020, having grown 0.84 percentage point
per year since 2018. Compared with practically no change from 2015 to 2018, when the share by
number rose 0.01 percentage point per year, that rise was significantly larger. The rise of ACH
share by number, most of which occurred from 2019 to 2020, is due partly to consumers and
businesses making more ACH payments directly and partly to more use of ACH as a settlement
vehicle for a variety of payment types of relatively small value (for example, through popular apps
widely installed on smartphones). Initial analysis of ACH data collected separately indicates that,
from 2019 to 2020, the already large numbers of traditional consumer ACH transfers (for
example, bills) and business ACH transfers (for example, bills, direct deposit of paychecks,
internal corporate transfers) increased at a faster rate than in previous years. Online and P2P payments settled via ACH also grew faster, while checks that were written and converted to ACH payments at the point of sale and in the back office at merchants stopped declining.
Federal government (U.S. Treasury) ACH transfers also increased substantially from 2019 to
2020.4 Increases in federal government ACH payments, which represent a small but significant
fraction of total ACH payments, were partially driven by the distribution of Economic Impact Payments (or “stimulus payments”) by direct deposit. ACH payments originated by the U.S. Treasury
increased by 10.20 percent by number and 18.7 percent by value from 2019 to 2020. These
increases are substantially greater than in any year since 2008.

The Share of Checks Continued to Decline by Number and Value
The decline in the share of checks by value accelerated slightly over the two-year period compared
with the past, but included a pronounced acceleration for 2020. The share of checks by value
declined 1.49 percentage points from 2018 to 2019 and 2.83 percentage points from 2019 to
2020. On average, the decline in the share of checks by value continued at a slightly faster pace
than previously, with a 2.16 percentage point decline per year from 2018 to 2020 compared with
the 2.12 percentage point decline per year from 2015 to 2018.

NACHA, “ACH Network Sees Record Growth in 2020 to 26.8 Billion Payments,” news release, NACHA, February 4, 2021,
https://www.nacha.org/news/ach-network-sees-record-growth-2020-268-billion-payments and “ACH Network Annual
Growth Rate Reaches 12-Year High,” news release, NACHA, February 3, 2020, https://www.nacha.org/news/achnetwork-annual-growth-rate-reaches-12-year-high.
For government and other Reserve Bank ACH processing data, see the Federal Reserve Board’s website at
https://www.federalreserve.gov/paymentsystems/fedach_data.htm.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

Figure 2. Number and value of card payments in the in-person and remote channels, 2015–20

150

Number

Billions

Value
Trillions of dollars

120

6
90
5
60
4
30
0

3
2015

2016

2017

2018

2019
Total

2020

2015

In-person

2016

2017

2018

2019

2020

Remote

Source: NPIPS (general-purpose card networks).

In contrast to the acceleration by value, the decline in the share of checks by number slowed
slightly from 2018 to 2020, compared with previous years. The decline in the share of checks by
number was 1.05 percentage points from 2018 to 2019 and 0.99 percentage point from 2019 to
2020. On average, checks declined 1.02 percentage points per year from 2018 to 2020 compared with an average decline of 1.54 percentage points from 2015 to 2018.
Although the decline in share by number from 2019 to 2020 was not unusual compared with the
past, the total number of commercial checks processed by the Federal Reserve Banks, a minor
fraction of total checks, declined 14.20 percent, substantially faster by number and value in 2020
compared with other recent years.5 Although a very small fraction of the total, and small compared
to government ACH, the number and value of U.S. Treasury checks increased at the highest rates
in decades from 2019 to 2020, rising 62.70 and 37.90 percent, respectively, partially driven by
the distribution of Economic Impact Payments in 2020.

Growth in Card Payments Stalled in 2020
The Number of Card Payments Dropped in 2020, while Value Increased
Based on card data collected in the NPIPS, the total number of card payments increased 7.8 billion from 2018 to 2019, in line with growth trends from 2015 to 2018, and then declined 3.0 billion in 2020 (figure 2, table A.1). The decline from 2019 to 2020 is the first annual decline in the
total number of card payments observed in FRPS estimates in two decades of collecting and
5

For Reserve Bank check processing data, including commercial and federal government processing, see the Federal
Reserve Board’s website at https://www.federalreserve.gov/paymentsystems/check_data.htm.

Growth in Card Payments Stalled in 2020

reporting these estimates.6 Despite the decline from 2019 to 2020, the total number of card payments was higher in 2020 than in 2018 (124.4 billion and 119.6 billion, respectively). In contrast,
the total value of card payments increased not only from 2018 to 2019 but also from 2019 to
2020, continuing its recent upward trend. The average value of card payments correspondingly
increased from 2019 to 2020, consistent with consumers bundling more goods or services into
fewer payments as part of reducing in-person shopping trips.

In-Person Card Payments Exhibited Unprecedented Decline in 2020
Card payments can be divided into in-person card payments, for which the payer is physically
present at the merchant location at the time of payment, and remote card payments, for which the
payer is not. From 2018 to 2019, the number of in-person card payments increased 5.0 billion, in
line with the growth trend from 2015 to 2018. The number of remote card payments increased
2.8 billion from 2018 to 2019, a smaller increase compared with other recent years. The arrival of
the pandemic in 2020 did not just reverse this order: It ushered in an unprecedented shift from
in-person to remote card payments. In particular, from 2019 to 2020, the number of in-person payments declined 11.7 billion. This drop was not only large in absolute and percentage terms but
also represents the first one-year decline of in-person card payments seen in FRPS data. By contrast, the number of remote card payments increased 8.7 billion, the largest one-year increase in
such payments seen in FRPS data.
Multiple factors potentially contributed to the simultaneous drop in in-person card payments and
increase in remote card payments in the first year of the pandemic. Consumer and business card
users responded to the sudden change in circumstances and quickly reduced their in-person purchases. At the same time, some payees changed their policies and practices for accepting payments, typically to minimize physical interactions and contact. Factors that affected the mix of
in-person and remote card payments likely included stopping certain in-person purchases—such
as public transportation, gasoline purchases, travel, theater, or dining—and shifting to purchases
of remote substitutes, such as computer hardware and software, home improvements, office
equipment, streaming services, or food delivery. In some cases, such as for grocery shopping, traditional brick-and-mortar merchants ramped up e-commerce shopping capabilities combined with
delivery and curbside pickup services.7
Driven by the substantial and unprecedented shift from the in-person to the remote channel from
2019 to 2020, the value of remote card payments exceeded the value of in-person card payments
for the first time in 2020. As reported in previous FRPS releases, the value of remote card pay-

Data were not collected on an annual basis before 2015. It is possible that cards could have declined for interim years
between triennial FRPS data collections, such as the period of financial crisis between 2006 and 2009.
In general, payments for such services are classified as remote, even though there may be an in-person aspect to the
transaction.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

ments had converged on and nearly equaled the value of in-person payments in 2018. That relationship was repeated in 2019.
In 2020, however, the value of remote card payments not only exceeded that of in-person card payments but also did so by a significant amount, reaching $3.85 trillion in 2020, compared to
$3.20 trillion for in-person card payments. Indeed, the value of remote card payments in 2020
exceeded the value of in-person card payments at their all-time peak of $3.51 trillion in 2019.
The average value of remote card payments, which remained substantially larger than that of
in-person card payments, fell from $96 in 2019 to $86 in 2020. The $10 decline in the average
value of remote card payments from 2019 to 2020 was larger than the decline in any one-year
period since 2015 and implies a growing proportion of smaller-value remote card payments. For
2019 to 2020, the $10 decrease in the average value of remote card payments was equivalent to
combining the 2019 payment distribution with an additional 8.7 billion new payments with an
average value of $41, only $1 more than the average value of in-person payments, which grew to
$40 in 2020. Viewed this way, the pattern of remote card payments growth from 2019 to 2020 differs from that observed from 2015 to 2019, when the average value of new remote card payments, by the same reasoning, would have equaled $70 or more for all years. Together, these
facts suggest that the massive shift to remote payments in 2020 was driven at least in part by
consumers purchasing lower-cost, everyday items via the remote channel that they would have
otherwise bought in person.
The shifts from the in-person channel to the remote channel can also be summarized in terms of
shares (figure 3). From 2015 to 2018, there was a steady increase by both number and value in
the share of card payments made remotely, while from 2018 to 2019, the shares changed little.
Then, from 2019 to 2020, the share of remote card payments by number increased markedly,
rising from 28.47 percent in 2019 to 36.14 percent in 2020, an increase of 7.67 percentage
points and the first time the share of remote card payments exceeded one-third of all card payments. Meanwhile, the share of remote card payments by value grew from 49.82 percent in 2019
to 54.62 percent in 2020, an increase of 4.80 percentage points. The increases in shares of
remote card payments by number and value from 2019 to 2020 were substantially larger than the
highest increases in recent years. From 2017 to 2018, for example, the shares of remote card
payments rose 2.91 percentage points by number and 3.00 percentage points by value.

Quarterly Data Show Greatest Shift to Remote Card Payments
in the Second Quarter of 2020
New quarterly data provide additional insight into how shifts between in-person and remote card
payments occurred during 2020 (figure 3). In the first quarter of 2020, the shares of in-person
and remote card payments by both number and value were similar to those observed in 2018 and

Growth in Card Payments Stalled in 2020

Figure 3. Shares of card payments in the in-person and remote channels, 2015–20

100

Number

Percent

100

20.87

22.65

25.11

28.02

28.47

Remote
36.14

Value

Percent

Q1 Q2 Q3 Q4

79.13

77.35

74.89

71.98

71.53

63.86

In-person

0
2015

2016

2017

2018

2019

Remote

2020
Annual

10
42.79

44.57

46.91

49.91

49.82

54.62

30
40
50

Q1 Q2 Q3 Q4

60
57.21

55.43

53.09

50.09

50.18

45.38

80
90

In-person

100
2015

2016

2017

2018

2019

2020

Quarterly

Source: NPIPS (general-purpose card networks).

2019. The data show that the greatest adjustment occurred soon after the pandemic took hold in
the second quarter of 2020, by which time the consequences of the pandemic and responses to it
were fully visible.8
As social-distancing protocols loosened during the summer, consumers and businesses adjusted,
with some businesses reopening. Simultaneously, the split between in-person and remote card
payments in the third quarter of 2020 shifted back toward that observed in the first quarter.
Finally, in the fourth quarter, as the flu season, concerns about the pandemic’s resurgence, and
the holiday shopping season kicked in, card payments swung back toward a higher share of
remote payments.
Swings in the split between in-person and remote card payments throughout 2020 were more pronounced in the shares by number than by value. Starting at less than one-third of card payments
in the first quarter (31.58 percent), remote payments by number shot up to 40.08 percent in the
second quarter, before dropping to 35.46 in the third quarter, and finally rising again to 37.65 percent in the fourth quarter. By value, the shares of in-person and remote card payments moved in
the same direction as the shares by number but exhibited milder variation throughout 2020, rising
from 52.71 percent in the first quarter to a peak of 56.79 percent in the second quarter, dropping
8

Various events throughout March 2020 foreshadowed the economic impact that was to come, such as the World Health
Organization escalation of the COVID-19 outbreak to pandemic status, major U.S. sports league cancellations,
announcements of school closures, and federal government emergency responses. For a time line and discussion of
data on the early economic impacts see, for example, Jane Ihrig, Gretchen Weinbach, and Scott A. Wolla, “COVID-19’s
Effects on the Economy and the Fed’s Response,” Page One Economics, Federal Reserve Bank of St. Louis, September 2020, https://research.stlouisfed.org/publications/page1-econ/2020/08/10/covid-19s-effects-on-theeconomy-and-the-feds-response.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

to 53.86 percent in the third quarter, and finally rising again to 55.21 percent in the fourth
quarter.

A 2020 Surge in E-commerce Drove an Increase in the Share of
Remote Card Payments
The FRPS categorizes remote card payments into mail order/telephone order (MOTO), e-commerce
(internet purchases), recurring/installment (for example, regular bill payments and subscriptions to
media services), and “other” (which includes payments that could not be assigned to any of the
other categories). From 2018 to 2020, by both number and value, the categories of e-commerce
and recurring/installment payments grew, while the categories of MOTO and “other” declined. A
surge in e-commerce was a key contributor to the growth in remote card payments from 2019 to
2020, having increased 7.2 billion by number and $0.37 trillion by value over the period. As a
result, in 2020, e-commerce comprised more than two-thirds (67.67 percent) of remote card payments by number and 59.16 percent by value, compared with 63.96 percent and 54.78 percent,
respectively, in 2019.

2020 Saw Continued Adoption of New Ways to Make Payments
Adoption of new payment technologies can be viewed not only in terms of more frequent payments
by current users (i.e., intensity of use) but also in terms of payers using them for the first time
(i.e., first-time use). The analysis below looks at the intensity of use of contactless card payments
and at both intensity of use and first-time use for digital wallet and P2P payments. The data suggest that the pandemic spurred growth of these innovative payment methods.

Despite Recent Growth, Contactless Card Payments Were Rare
A contactless card payment involves the initiation of an in-person transaction through a tap or
wave of a card with a special microchip or a mobile device at a merchant terminal or kiosk.9 The
FRPS has measured contactless card payments since 2018 through the NPIPS. Contactless card
payments could be perceived to reduce virus transfer risks by reducing the amount of time spent
handling payments and touching surfaces at checkout.
The data show that contactless card payments by number more than doubled from 2018 to 2019,
rising from 0.7 billion in 2018 to 1.6 billion in 2019, for a rate of increase of 121.24 percent
(table A.1, appendix). In the face of declines in in-person card payments overall in 2020, contact-

The proportions of mobile devices or contactless cards used were not measured. The remainder of chip payments,
called contact payments, require the insertion of a card into the terminal. Both contactless and contact chip payments
may use the Europay, MasterCard and Visa (EMV) microchip-based specification.

2020 Saw Continued Adoption of New Ways to Make Payments

less card payments grew more rapidly, increasing at a rate of 172.30 percent since 2019 to reach
3.7 billion in 2020.
By value, contactless card payments increased from $0.02 trillion in 2018 to $0.05 trillion in
2019, before increasing to $0.11 trillion in 2020. Contactless card payments tended to be for
smaller-value purchases compared to other in-person payments, with an average value of $30
compared with an average value of $40 for in-person card payments in 2020.
Faster increases in contactless payments may indicate a pandemic effect. As a share of the
number of in-person payments, the number of contactless card payments reached 4.63 percent in
2020, up from 1.70 percent in 2019 and just 0.77 percent in 2018 (figure 4). As a share of the
value of in-person card payments, contactless card payments increased from 0.60 percent in
2018 to 1.42 percent in 2019 and 3.40 percent in 2020.10

Digital Wallet Card Payments Grew Quickly from a Small Base
Digital wallets allow the secure storage of card credentials and shipping information on a mobile
device or online. The technology allows in-person card payments without the use of the physical

Figure 4. Contactless card payments as a share of in-person card payments, 2018–20

Number

Percent

Value
Percent

0
2018

2019

2020

2018

2019

2020

Note: Contactless card payments include those made using a card with a special microchip and those made with a
digital wallet on a mobile device.
Source: NPIPS (general-purpose card networks).

Although the use of contactless card payment technology has been possible for particular cards at particular merchants
in the United States for about two decades, adoption by consumers and merchants remained negligible over the years.
For a pre-pandemic study of consumer attitudes toward contactless cards and more discussion, see Tom Akana and Wei
Ke, Contactless Payment Cards Trends and Barriers to Consumer Adoption in the U.S., discussion paper, (Philadelphia:
Federal Reserve Bank of Philadelphia, May 2020), https://www.philadelphiafed.org/consumer-finance/paymentsystems/contactless-payment-cards-trends-and-barriers-to-consumer-adoption-in-the-us.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

card and remote card payments without the need to manually enter and share sensitive information with a merchant, such as the card number. The pandemic could have contributed to faster
growth in digital wallet card payments through both the in-person and remote channels.11 The
growth may have come from payers making more in-person digital wallet payments, all of which are
contactless and thus attractive from a health and safety perspective, and from payers making
more e-commerce payments supported with digital wallets instead of a card number entered on a
merchant website or a “card on file” payment made by accessing card information retained by a
merchant.
The data collected from large depository institutions through the DFIPS provides estimates of the
annual shares of digital-wallet-based payments among credit and non-prepaid debit card payments
from 2017 to 2020.12 By 2020, as a share of all credit and non-prepaid debit card payments,
digital wallet payments reached 2.60 percent by number and 1.47 percent by value, up from
0.50 percent and 0.23 percent, respectively, in 2017 (figure 5). The share of digital wallet payments in card payments increased more rapidly in recent data, climbing about twice as fast from
2019 to 2020 (1.16 percentage points by number and 0.77 percentage point by value) than from
2018 to 2019 (0.58 percentage point and 0.32 percentage point, respectively). Such faster
growth from 2019 to 2020 suggests the pandemic may have resulted in account holders making
more digital wallet payments than they would have otherwise.

Figure 5. Digital wallet payments as a share of card payments, 2017–20

Number

Percent

Value

Percent

0
2017

2018

2019

2020

2017

2018

2019

2020

Note: Only includes in-person and remote payments by credit or non-prepaid debit card.
Source: DFIPS (large institutions).

The survey collected data on in-person and remote digital wallet payments, but not enough responses were provided to
estimate their volumes or shares separately in this report.
Few depository institutions provided data on the use of digital wallets with prepaid debit cards. Thus, prepaid debit
cards are excluded from this analysis.

2020 Saw Continued Adoption of New Ways to Make Payments

In addition to digital wallet payment volumes, the FRPS collected quarterly data for 2020 from
large depository institutions on the number of customer bank accounts with digital wallet activity.
The quarter-over-quarter change in (a) the number of accounts with activity and (b) the number of
accounts with first-time activity sheds light on how digital wallet adoption evolved throughout 2020
(figure 6).13 The data show that digital wallet adoption fell as the pandemic was taking hold, indicated by the decline from the first quarter to the second quarter in the number of accounts with
first-time activity.
One potential explanation is that, early in the
pandemic, shoppers avoided making in-person
payments, including by digital wallets. In the

Figure 6. Quarterly rate of change in the
number of accounts with digital wallet payment
activity, 2020

second half of 2020, the data suggest a
renewed interest in digital wallets, as indi-

Accounts with first-time activity

cated by growth in the number of active

accounts of more than 11.5 percent, both

from the second quarter to the third quarter

and from the third quarter to the fourth

quarter. Of the two quarters, the third quarter
was a period of notable growth in the number

11.59

8.01

3.74

0
−2

increase of 11.05 percent relative to the

−4

2020 was a period of cautious reopening fol-

11.53

11.05

of accounts with first-time activity, with an
second quarter. Given that the third quarter in

Accounts with activity

Percent

−3.82
Q1–Q2 Q2–Q3 Q3–Q4

Q1–Q2 Q2–Q3 Q3–Q4

third quarter suggests that much of the

Note: All active accounts refers to those with at least
one digital wallet payment in a month. Newly active
accounts refers only to those that had a digital wallet
payment for the first time. Includes in-person and
remote payments by credit or non-prepaid debit card.
Rates of change are continuously compounded.

growth came from new customers using digital

Source: DFIPS (large institutions).

lowing the strictest lockdowns in the previous
quarter, the surge in first-time activity in the

wallets to make in-person payments.

P2P Payment Adoption Spiked in First Full Quarter of the Pandemic
P2P payments, including those sponsored by banks and those independently sponsored by nonbank processors, are made from one individual’s account to another’s and are typically initiated
through a web browser (including a mobile browser), a mobile application, or an SMS/text message. Bank-sponsored P2P payments are typically settled with an ACH transfer, although a small
but growing number are being settled using new real-time or “instant” payment systems. On the

For both digital wallet and P2P activity (discussed below), active accounts are defined as those with at least one payment of the type in question in a month. Depository institutions were asked to compute the number of active accounts
and first-time active accounts for each month in 2020 and then report the average monthly totals for each quarter.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

Figure 7. Quarterly rate of change in the
number of accounts with P2P activity, 2020

other hand, nonbank-sponsored P2P payments
are typically settled via a card network or via a
book entry between accounts held by the pro-

Accounts with first-time activity
20

Accounts with activity

cessor.

Percent
17.99

As with digital wallet adoption, the FRPS col-

12.44
8.86

9.77

lected quarterly data from large depository
institutions through the DFIPS on the number

5.81

of accounts that used a bank-sponsored initia0

tion method to make a P2P payment

−5
−10

(accounts with activity) and those that made
−7.49
Q1–Q2 Q2–Q3 Q3–Q4

Q1–Q2 Q2–Q3 Q3–Q4

such a P2P payment for the first time
(accounts with first-time activity).14 Early in

Note: P2P is payments using a bank-sponsored
person-to-person method. Rates of change are continuously compounded.

2020, the number of accounts with first-time

Source: DFIPS (large institutions).

first quarter to the second quarter; growth in

P2P activity surged by 17.99 percent from the
the number of accounts with activity similarly
rose at a high rate of 12.44 percent over the

period (figure 7). A potential explanation is that when the shock of the pandemic was most acute,
individuals adopted P2P to pay others remotely, perhaps as they sought ways to avoid the need for
exchanging cash or checks.
Following the surge in the second quarter, the rate of change in accounts with first-time P2P
activity declined 7.49 percent from the second quarter to the third quarter and recovered somewhat by the end of 2020, rising 5.81 percent from the third quarter to the fourth quarter. Despite
such reduced interest relative to the second quarter, growth in the number of accounts with P2P
activity remained relatively high throughout the rest of 2020, growing by 8.86 percent from the
second quarter to the third quarter and by 9.77 percent from the third quarter to the fourth
quarter.
Quarterly changes in the shares of accounts with first-time activity for digital wallet adoption
(figure 6) differ from changes for P2P adoption (figure 7). From the first quarter to the second
quarter, the shares of accounts with first-time digital wallet activity decreased and with P2P
activity, increased. For the second quarter to the third quarter, the reverse held true. This difference highlights how the use cases for these two ways to pay are connected in different ways to
social-distancing effects in the second quarter and to a relaxation of restrictive postures leading to
more in-person payments in the third quarter.

Data on payments sponsored by independent P2P processors are not included.

Conclusion

Conclusion
Using new data from the 2019 and 2020 FRPS surveys, this brief identifies and discusses key
changes in payment behavior from 2018 to 2020. In 2020, the first year of the global pandemic,
consumers and businesses adjusted their mix of card, ACH, and check payments in ways that are
notable and that suggest some clear connections to the unfolding public health situation, with
ACH gaining substantial shares of noncash payments by both number and value. Total card payments declined in 2020, driven by a marked decline of in-person card payments, although the
decline was partially offset by a surge in remote card payments. The remote share of card payments increased particularly from the first quarter to the second quarter of 2020, as shoppers
adopted e-commerce-based alternatives to in-person purchases. The data suggest that the pandemic also affected the adoption of innovative payment methods, such as digital-wallet-based card
payments and P2P payments from bank accounts. Although some of the changes observed in
2020 were at least partly a continuation of longer-term trends, the data show some early evidence
of stronger behavioral shifts that may persist. Information collected by the FRPS in the future,
including the upcoming triennial survey for 2021, will help determine whether the shifts identified
in 2019 and, especially, 2020 will continue in the longer run.

Contact
The Federal Reserve Payments Study is a collaborative effort by staff members at the Federal
Reserve Bank of Atlanta and the Board of Governors of the Federal Reserve System to track and
document developments in the U.S. payments system through the collection of quantitative and
qualitative survey data.
Geoffrey Gerdes, Claire Greene, and Xuemei (May) Liu prepared this brief, with excellent research
assistance from Matt Froberg, Karen Jusczak, and Matthew West. Staff members at the
Federal Reserve Bank of Atlanta and the Board of Governors of the Federal Reserve System
who contributed to this report include Lisa Blair, Nancy Donahue, Susan Foley, Laura Garcia,
Mary Kepler, Susan Krupkowski, Ellen Levy, Mark Manuszak, Stephanie Scuiletti,
Catherine Thaliath, and Krzysztof Wozniak. The authors take responsibility for any errors.
If you have questions about the FRPS or this brief, or to be added to the FRPS mailing list, please
email frpaymentsstudy@frb.gov.
Data, reports, and survey instruments are available at https://www.federalreserve.gov/
paymentsystems/fr-payments-study.htm.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

Appendix
Scope
To supplement the 2018 national estimates, the Federal Reserve Payments Study (FRPS) collected
data for 2019 and 2020 in the following two data collection efforts:

DFIPS
The Depository and Financial Institutions Payments Surveys (DFIPS) were conducted with the
assistance of the GCI Analytics office of McKinsey & Company.
The DFIPS survey for calendar year 2018 collected data from a representative sample of U.S.
depository institutions of all types and sizes. The DFIPS surveys for 2019 and 2020 calendar
years collected data from a sample of the largest institutions by deposit size (also part of the
DFIPS 2018). Information on how payment shares at these large institutions changed in 2019 and
2020, while not broadly representative of the U.S. population of depository institutions, indicates
how noncash payments overall may have changed in the period before the next representative
survey of depository institutions, which will cover 2021.
In addition to annual data, the DFIPS survey for 2020 requested quarterly data on the distribution
of in-person and remote card payments and the adoption of certain innovative ways to pay,
including remote and in-person card payments with digital wallets and person-to-person (P2P) payments funded from bank deposits. Digital wallet payments, including both in-person and remote
channels, were added to the surveys in 2017.
The large depository institutions have a larger proportion of large businesses compared to the
smaller institutions, which have a somewhat higher proportion of consumer accounts. Estimates
of the mix of accounts from the large depository institutions that responded to the surveys reflect
this. The percentage of consumer accounts in all transaction accounts in the DFIPS large institution sample fluctuated between 86 percent and 87 percent by number and between 32 percent
and 36 percent by value from 2015 to 2020. This share of consumer accounts is slightly less
than that estimated for the population of depository institutions from the DFIPS representative
sample for 2018: Consumer accounts represented 89 percent by number and 44 percent
by value.
Definition: Digital Wallet, the DFIPS (reproduced from the survey form)
Report all card transactions made via a digital wallet, including tokenized digital wallet. Include:
Digital wallet transactions made by using electronic devices, such as smartphone, smart watch, or
activity tracker, by “tapping” the device at the point-of-sale (POS) terminal (i.e., Apple Pay, Sam-

Appendix

sung Pay, Google Pay, Fitbit Pay, Masterpass). Also include tokenized digital wallet transactions
made by using customer’s payment credentials saved in a virtual account number. These credentials can be stored either on a smartphone or in the cloud. When making a purchase, a substitute
account number and a transaction specific code (“token”) are used to process payments. This can
include purchasing items online with a computer or using a smartphone to make a purchase with
a browser or in-app (i.e., Apple Pay, Google Pay, Masterpass, Visa Checkout, Amex Express
Checkout). Include digital wallet near-field communication (NFC) transactions, MST (magnetic
secure transmission) transactions, quick response (QR) code transactions, barcode transactions,
in-app transactions, or browser transactions. Do not include: Card-on-file e-commerce transactions
(cardholder-initiated or merchant-initiated) (i.e., installment payment) or transactions made via contactless cards (i.e., “tap and pay”).
For 2020, the following criteria apply:
• New active digital wallet accounts are accounts from which at least one value transaction via
digital wallet was completed for the first time within a month.
• All active digital wallet accounts are accounts from which at least one value transaction via
digital wallet was completed within a month.

NPIPS
The Networks, Processors, and Issuers Payments Surveys (NPIPS) for various years were conducted with the assistance of Blueflame Consulting and Research.
The NPIPS survey data reported in this brief cover the general-purpose card networks. The data
were used to estimate the total number and value, along with related information, for credit, nonprepaid debit, and prepaid debit card payments in the United States for 2015 to 2020. Contactless card payments, a subset of chip payments, which are, themselves, a subset of the in-person
channel, were added to the surveys in 2018.
In addition to annual data, the NPIPS for 2020 requested quarterly data on the distribution of
in-person and remote card payments, as well as contact and contactless in-person card payments.
Definition: Contactless card payments, NPIPS (reproduced from the survey form)
Contactless card transactions (chip card or mobile device radio frequency identification (RFID),
“tap” or “wave”): Contactless authentication can utilize a physical card, fob, sticker or a mobile
device (typically a mobile phone) that is “tapped” to pay at a POS terminal. Contactless chipauthenticated transactions typically use RFID and/or a specialized subset of near-field communications (NFC) standards to initiate a card-based payment and may include some contactless EMV
transactions.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study

Table A.1. Card payments by number, 2015–20
Billions

2015

2016

2017

91.9

99.1

109.8

In-person

72.7

76.7

Chip

1.4

14.7

Item
Total

2018

2019

2020
Q1

119.6

127.4

124.4

30.5

28.3

32.4

33.1

82.2

86.1

91.1

79.4

20.9

17.0

20.9

20.7

34.2

48.7

60.4

59.7

48.1

58.9

56.0

0.7

1.6

3.7
9.6

11.4

11.5

12.5

Annual

Contact
Contactless
No chip
Remote
MOTO

71.3

62.0

48.0

37.4

30.7

19.7

19.2

22.4

27.6

33.5

36.3

45.0

2.7

2.6

2.7

2.8

2.6

11.8

13.5

17.0

21.1

23.2

30.4

Recurring/installment

3.4

4.0

4.7

5.8

7.4

9.2

Other

1.3

2.3

3.3

3.9

2.9

2.8

E-commerce

2020

Note: Total card payments is Net, Authorized, and Settled payments as defined in the surveys. Includes general-purpose credit, non-prepaid
debit, and general-purpose prepaid debit cards. Figures may not sum because of rounding.
Source: NPIPS.

Table A.2. Card payments by value, 2015–20
Trillions of dollars

2015

2016

2017

5.13

5.46

5.96

In-person

2.93

3.03

Chip

0.10

0.81

Item
Total

2018

2019

2020
Q1

6.58

7.00

7.04

1.69

1.61

1.83

1.91

3.16

3.30

3.51

3.20

0.80

0.70

0.84

0.86

1.63

2.15

2.52

2.56

2.13

2.47

2.45

0.89

0.92

0.98

1.06

Annual

Contact
Contactless

0.02

0.05

0.11

2.84

2.22

1.54

1.15

0.99

0.63

Remote

2.19

2.43

2.79

3.29

3.49

3.85

MOTO

0.60

0.56

0.58

0.64

0.66

0.63

E-commerce

1.20

1.27

1.44

1.75

1.91

2.28

Recurring/installment

0.23

0.26

0.29

0.35

0.41

0.48

Other

0.17

0.34

0.49

0.56

0.51

0.46

No chip

2020

Appendix

Table A.3. Card payments by average value, 2015–20
Dollars

2015

2016

2017

2019

2020

In-person

Chip

Contact

Contactless

30
92

Item
Total

No chip

2018

Annual

Remote

114

108

101

MOTO

224

220

222

239

231

248

E-commerce

101

Recurring/installment
Other

128

147

148

141

177

165

2020

Full text of Federal Reserve Payments Study : 2020 and 2021 Annual Supplements : Developments In Noncash Payments for 2019 and 2020: Findings From the Federal Reserve Payments Study, Issued December 2021

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