Fed study: Debit card payments trump credit cards and checks

Fred O. Williams
Senior Reporter
Expert on consumer credit laws and regulations.


Federal Reserve


Paying with plastic -- both credit and debit -- continues to grow in popularity as a way of getting through checkout in stores and online, according to a Federal Reserve report released Thursday.

The number of U.S. card payments in 2015 was 83.4 billion, accounting for two-thirds of non-cash payments in the U.S. That's up 19.9 billion transactions from 2012, the last year the Fed examined methods of payment.

Non-prepaid debit cards lead the growth, up by 12.4 billion payments. Credit card payments grew by 6.9 billion, and prepaid card payments were up by less than 1 billion.

"The distribution of noncash payments in 2016 is the outcome of many decades of change," the report said. Payments have shifted from paper checks in years past to cards and electronic transactions carried via banks' automated clearinghouse or ACH system.  

Among the top findings:

  • Credit card transactions reached 33.8 billion in 2015, with a value of $3.16 trillion. While the number of transactions is up, the average value per transaction dropped slightly, to $93 from $95.
  • In value, debit cards trailed credit cards with a total transaction value of $2.56 trillion in 2015, or $37 per transaction, the same average transaction as in 2012.
  • Paper checks continued their long decline in transaction volume in 2015, falling by 2.5 billion to 17.3 billion. By value, however, checks continue to dwarf cards, accounting for $26.8 trillion in transfers.

The latest edition of the Fed's triennial payments study takes a broad overview of how American consumers, businesses, and state, local and federal governments make noncash payments, in person and online.

Thursday's report, the 2016 Federal Reserve Payments Study, was a preliminary look at summary information from 2015. The U.S. central bank said that a more in-depth analysis will follow in 2017. The study gathers information from three surveys of banks, card issuers and payment processing networks.

Payments with chip-embedded cards are growing fast, but still represented only a small slice of the total in 2015. Credit and debit chip card payments have grown 230 percent per year since 2012, but accounted for just 2 percent of card payments made in person in 2015, "reflecting the early stages of broad industry effort to roll out chip card technology," the report said.

As a result, counterfeiting of cards remains a favorite tool of fraudsters in the U.S., while it has been virtually eliminated in markets with broad chip card adoption. Counterfeit cards made up 44 percent of instances of card fraud in 2015, compared to 8 percent in Canada and the United Kingdom, 4 percent in Australia and 0 percent in France.

Tiffani Montez, senior analyst at Aite Group, said credit card transactions will continue to grow as the members of Generation Y mature into their most credit-active years. On top of that, "issuers will loosen credit standards a little bit," she said.

The report examines the major types of noncash payments and does not attempt to measure the volume of cash transactions. However, it does track ATM cash withdrawals, which numbered 5.8 billion in 2015, the same as in 2012. The average withdrawal grew $4 to $122.

See related: How America pays: Fed study paints big picture of card trends

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Updated: 03-19-2019