The Consumer Payments Research Center conducts survey, econometric, and theoretical research to contribute to public policy that maximizes the welfare of all members of the economy.
Consumer Revolving Credit and Debt over the Life Cycle and Business Cycle
Using a 5 percent sample of every credit account in the United States from 1999 to 2014, an examination of U.S. consumers' patterns of incurring, carrying, and paying off their debts.
2013 Survey Research & Data Available Now
Research report and complete dataset available for download.
May 2016. In mid-2010, an amendment was passed to Regulation E, which implements the Electronic Fund Transfer Act, requiring financial institutions to ask consumers whether or not they want overdraft protection for automated teller machine (ATM) transactions and everyday purchases made with a debit card.
From 2009 to 2011, the decline in the percentage of consumers who paid a fee for overdrawing was sharper than the decline in the percentage of those who withdrew more than they had in their bank account. The data do not show a strong and immediate response to the implementation of the opt-in rule.
Read full research data report, "Consumers' Use of Overdraft Protection."
April 2016. Separating convenience users (those who pay off their credit card debt every month) from revolvers (those who carry a balance from month to month): For revolvers a 10 percent increase in credit limit is followed by a 1.3 percent increase in debt within one quarter, and a 9.99 percent increase in debt over the long term.
42 percent of credit card holders carried an unpaid balance at least once in the 12 months ended October 2013, according to the 2013 Survey of Consumer Payment Choice.
Read full research paper, "Consumer Revolving Credit and Debt over the Life Cycle and Business Cycle."
March 2016. Holding income and demographic factors constant, U.S. consumers without checking accounts (those who are "unbanked") are significantly more likely to own a GPR card than consumers with checking accounts (those who are "banked"). In addition, among GPR card holders a larger fraction of unbanked consumers than banked consumers receive their income directly to their GPR card.
Owners of general purpose reloadable prepaid cards (GPR) who do not have checking accounts comprise 4.8 percent of U.S. adults, according to the 2012 Survey of Consumer Payment Choice.
Read full report, “How Are U.S. Consumers Using General Purpose Reloadable Prepaid Cards?”
February 2016. Adoption and use of several payment instruments are correlated with almost all socio-demographic attributes—most significantly age, education, and income.
More results of an analysis of demographic trends in consumer behavior, 2009 to 2013.
January 2016. Mobile banking and mobile payments became much more common among consumers in 2013. The adoption of mobile banking, the use of mobile banking, and the use of mobile payments increased from 2012 to 2013.
Detailed report: 2013 Survey of Consumer Payment Choice.
December 2015. The 2015 Survey of Consumer Payment Choice and Diary of Consumer Payment Choice are in the field through mid December. Respondents arereporting on their preferred payment instruments in particular situations, including for online payments, for bills, for purchases, and for in-person purchases by dollar amount
New this year:
More info about the Diary of Consumer Payment Choice.
September 2015. In 2013, the number of consumer payments per month did not change significantly from 2012.
March 2015. The Survey of Consumer Payment Choice asks questions in three broad categories:
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December 2014. These Federal Reserve Surveys will be exhibiting at the American Economic Association/Allied Social Sciences Associations meeting in Boston, January 3-5, 2015, Booth #422. Learn about opportunities for research collaborations and uses in the classroom.
September 2014. In 2012, the number of consumer payments did not change significantly from 2010 as the economy settled into steady expansion following the financial crisis and recession. After increasing by 28 percent from 2008 to 2010, cash payments by consumers fell back by 10 percent from 2010 to 2012, while the share of cash payments dropped for a third straight year to 26.8 percent.
Credit and charge card payments by consumers, which declined in 2009, rebounded further, increasing by 14 percent from 2010 to 2012. The steady trend decline in paper check payments by consumers continued. Debit cards and cash continued to account for the two largest shares of consumer payments in 2012.
August 2014. Surveys conducted in seven industrialized countries find that cash has not disappeared as a payment instrument, especially for low-value transactions. The use of cash is strongly correlated with transaction size, demographics, and point-of-sale characteristics such as merchant card acceptance and venue.
Cross country comparisons of all personal payments at the point of sale, for remote purchases, or in-person to other persons find that, across the 7 countries, between 46 percent and 82 percent of the number of these payment transactions are conducted by cash. In Austria and Germany, cash represents more than 50 percent of the value of transactions. In Canada, France, and the U.S., cash accounts for about one-fourth of the value of transactions. (Recurring payments are excluded.)
June 2014. Economists are visiting the Boston Fed this summer to explore opportunities for joint research on econometrics and consumer behavior. This summer's visitors include Andrew Hertzberg, Columbia; Theresa Kuchler, New York University; and Ariel Pakes, Harvard.
Visiting scholars may have access to data resources and may conduct collaborative research. Graduate students are invited to explore opportunities to use Consumer Payments Research Center data resources..
Learn more about opportunities for scholars.
April 2014. On April 3 and 4, the Consumer Payments Research Center hosted the Economics of Payments VII conference in Boston.
The conference brought together academic, government, and industry economists to look at current economic research on retail and wholesale payments.
Conference agenda, with links to papers and presentations.
April 2014. Before 1977, U.S. consumers had just five ways to pay: cash, checks, travelers' checks, and money orders.
Over the next 20 years, consumers' choices almost doubled with the addition of four payment instruments: debit cards (1977), and bank account number payment and prepaid cards (1983), online banking bill payment (1997).
The Survey of Consumer Payment Choice examines these nine payment instruments.
March 2014. Robert M. Townsend, Elizabeth & James Killian Professor of Economics at MIT, has joined the Consumer Payments Research Center as a visiting scholar.
A theorist, macroeconomist, and development economist, Rob leads the Thai Family Research Project, which has collected 15 years of annual data for more than 1,200 households in Thailand and, separately, monthly data for 700 households. The surveys collect detailed information about income, entrepreneurial activity, cash flow, use of informal and formal financial services, and household balance sheets.
At the Consumer Payment Research Center, Rob is looking at issues related to the optimal number of payment networks in an economy.
Among other research activities, he is principal investigator and faculty director of the Consortium on Financial Systems and Poverty at the University of Chicago, a program which seeks to identify, define, and develop efficient financial systems in developing economies.
The Consumer Payments Research Center is interested in working with scholars who study the demand for money and payments, assess consumer protection and financial literacy, study payment markets and examine consumer behavior.
Learn more about opportunities for scholars.
March 2014. The 2010 survey of Consumer Payment Choice asked consumers their preferences for the different methods of authorizing a debit card transaction (PIN, signature, neither PIN nor signature).
As of fall 2010, consumers reported a preference for PIN debit: 46 percent preferred PIN, 30 percent preferred signature (20 percent had no preference).
Read the full survey report.
February 2014. In 2009, some consumers found that their credit card limits were reduced.
Now, visiting scholar Scott Fulford is diving into Boston Fed and other data to find out what people did when they lost access to credit during the great recession.
Scott aims to learn what people do when the lose access to credit. Pay down other debt? Reduce spending? Tap into savings?
An assistant professor of economics and international studies at Boston College, Scott has written on U.S. banking history and development economics.
He’s able to bring together deep knowledge of the choices less advantaged people make, understanding of household finance, and insights into monetary and payment systems to this question of credit limits.
Scott is a visiting scholar at the Boston Fed through 2014, so stay tuned.
January 2014. Findings from the 2010 Survey of Consumer Payment Choice show the popularity of payment cards:
January 2014. U.S. consumers kept their cash use high as the economy began to recover in 2010 from the recession. Cash use had increased sharply during the recession year 2009, according to the Survey of Consumer Payment Choice.
Consumers used cash for almost one-third of all their payments in 2009 and 2010, 30 percent and 29 percent, respectively. In contrast, just slightly more than one-fifth of consumer payments were in cash in 2008—22 percent.
“Cash showed surprising staying power early in the economic recovery even though the long-term transformation toward electronic payments continues,” said Boston Fed economist Scott Schuh, director of the Consumer Payments Research Center.