The majority of survey respondents reported not making any in-person payments since Ma(Figure 4). Many people did not make in-person payments
Whether the COVID-19 pandemic serves to accelerate this trend is yet to be seen. Rising values of cash holdings have been observed in the Diary of Consumer Payment Choice for the past few years. The degree to which individuals who withdrew extra cash increased their storage may point to the relief cash can offer in times of uncertainty and to its role as a contingency payment method.
Those who withdrew extra cash increased their holdings by 426 percent, jumping from $178 to $937, and those who did not withdraw extra cash increased their holdings by 58 percent, rising from $275 to $436. On average, cash stored elsewhere nearly doubled, rising from $257 to $483 (Figure 3). The value of cash stored elsewhere was far greater for all respondent groups compared to pre-pandemic amounts. In addition to reporting cash held on their person, participants were asked to report the value of cash stored elsewhere (e.g. Holdings increased by 71 percent to $125 for individuals who withdrew extra cash and by 10 percent to $77 for those who did not withdraw extra cash. On average, the amount of cash people carry increased from $69 to $81, a 17 percent increase from the pre-pandemic amount reported in the 2019 Diary (Figure 2). Survey participants were asked whether they increased their cash holdings as a result of the pandemic and to report the total dollar value of cash generally carried in their pocket, wallet, or purse. While this is not necessarily a deliberate avoidance of cash usage, it implies people are not spending their extra cash holdings. Additionally, participants were asked whether they had conducted any in-person payments, and nearly two-thirds reported they had made no in-person payments since March 10.
Individuals were asked whether they were avoiding cash and 70 percent indicated they were not. The questions focusing on changing payment behavior show approximately 20 percent of participants have switched to paying online or over the phone, with most of the switching taking place at restaurants, fast food locations, and big-box stores. In general, participants reported holding more cash on their persons and especially as a store of value in their homes, compared to trends reported in the 2019 Diary. The questions focused on three general themes: cash holdings, changes in payment behavior, and cash avoidance. The CPO asked 10 COVID-19 survey questions 3, which participants answered between April 15 and May 12, 2020. As such, the 2019 Diary is more comprehensive and contains the most up-to-date Diary data, while information from the supplemental survey gives us insight into how payment behavior is evolving in the midst of the crisis. While the Diary requires participants to record their daily transactions, the supplemental survey required only recollection of past behavior. Of the 3,016 individuals who participated in the 2019 Diary, 2,737 completed the supplemental survey.
To better understand potential payment behavior changes, the Federal Reserve sent a supplemental survey to Diary participants in May 2020. Yearly Cumulative Growth of Currency in Circulation (CIC) Given the dramatic increase in demand for currency, along with anecdotal evidence of changing consumer payment practices during the pandemic 2, the Cash Product Office (CPO) sought to capture data regarding how the pandemic may have affected individuals’ payment behavior. Because the 2019 Diary was conducted before the spread of COVID-19, it does not reflect payment behavior changes caused by the pandemic. Since March 1, the Federal Reserve has issued approximately $130 billion of currency into circulation (Figure 1). cities and states began issuing stay-at-home orders in March 2020, and global demand for U.S. As the number of COVID-19 cases increased worldwide, U.S. Approximately two months later, the first case of COVID-19 was identified in China, and the virus has since spread to create a global pandemic. In October 2019, the Federal Reserve conducted the sixth Diary of Consumer Payment Choice (Diary) 1.
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