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Debit and Credit Cards Lead the Way in Non-Cash Payment Growth, New Fed Study Says
December 22, 2016

By Jim Daly

The Federal Reserve released its latest triennial payments study Thursday morning, and it reports that the number of U.S. non-cash payments totaled 144 billion in 2015, up 5.3% annually from 2012. Debit and credit cards led in growth, while the automated clearing house network “grew modestly,” the Fed said.

The total value of non-cash payments increased 3.4% over the three-year period to $178 trillion, according to the 2016 Federal Reserve Payments Study.

Credit, debit, and prepaid cards “continued to gain ground in the payments landscape” and now account for more than two-thirds of “core” non-cash payments, the Fed said in a news release. Total card payments grew 19.9 billion from 2012 to 2015, led by debit cards, which grew by 12.4 billion transactions. Credit card payments increased by 6.9 billion. Both payment forms had growth rates of about 8% over the study period.

Payments on prepaid cards grew by about 600 million transactions.

Card-not-present payments, which the Fed calls remote payments, accounted for 19% of card transactions in 2015, up less than 4 percentage points from 2012. “Gains in remote cards' share of total card payments were mitigated by substantial growth of in-person card use,” the Fed said.

Chip-based card transactions grew at an annualized rate of 230% over the three years but amounted to only 2% of total general-purpose card-present payments in 2015, according to the Fed. The study period, however, ended only three months after the card networks’ U.S. point-of-sale EMV chip card liability shifts took effect.

For this latest study, the Fed collected more data from financial institutions and other entities about payments in general and about fraud than it did in previous studies. “In 2015, the proportion of general-purpose card fraud attributed to counterfeiting was substantially greater as a share of total card fraud in the United States compared with countries where chip technology has been more completely adopted,” the Fed said. “Nonetheless, the total share of remote fraud is already substantial (46%) compared to its share in total card payments (19%).”

While only a limited amount of fraud information from the study is available now, the Fed said it plans to release more data in 2017 after a fuller analysis.

ACH payments grew to an estimated 23.5 billion transactions in 2015 with a value of $145.3 trillion, according to the Fed. The ACH posted annualized growth of 4.9% in transactions and 4% by value from 2012 to 2015.

Notably, the two-decade-old slide in check payments began to slow down. “Check payments fell at an annual rate of 4.4% by number or 0.5% by value from 2012 to 2015,” the Fed said. “For the first time since the descent began in the mid-1990s, check payments posted a slowing in the rate of decline.”

The new study is based on data collected from three separate surveys, one for financial institutions, another for payment networks, processors, and card issuers, and a third from a check sample. McKinsey & Co. and Blueflame Consulting assisted the Fed in the effort.

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