When most people think of the Federal Reserve – if they consider it at all – it’s when the Fed raises or lowers interest rates. But monetary policy is only one of the tasks the Fed engages in. It also conducts in-depth research in an effort to uncover trends and insights that can benefit consumers, industry and the economy as a whole.
Recently, the Fed released the 2013 Federal Reserve Payments Study Detailed Report, which examines the use of credit, debit, prepaid debit cards and other forms of alternative payment. Although the information in the report was collected in 2012, it still provides an interesting glimpse into consumer and business use of various forms of plastic, checks and mobile devices. Among the Federal Reserve Payment Study’s many findings are:
- For purchases, Americans favor debit cards. On average, Americans made 23 monthly payments using a debit card, with credit cards utilized 11 times and prepaid cards close behind at 10 per month.
- In total, Americans have 776 million general-purpose cards. Of that number, 334 million are credit cards, 283 million are debit cards and 159 million are prepaid cards.
- At 305 million versus 28 million, consumers hold far more credit cards than do businesses.
- ATMs were far more popular for getting cash than over the counter withdrawals. In total, there were 5.8 billion ATM withdrawals, compared to 2.1 billion over the counter.
- Prepaid cards for public transport and other transportation payments exceeded all other prepaid card payments. In total, there were 9.9 billion payments using prepaid cards for auto tolls and public transport.
- There were over 250 million mobile payments made utilizing mobile wallet applications.
- PIN debit and ATM transactions had lower fraud rates than transactions using signature debit or credit cards.