How Do Consumers Make Their Payment Choices?
Payment transformation has generated a shift from paper to cards and electronic payments in the United States, but there is also a large degree of heterogeneity among consumers in how they pay. Data on the number of consumer payments by payment method were scarce until the year 2000. We now have much better data on the aggregate number of payments by payment instrument in the United States and more recent, detailed data on payments by consumers separate from payments by the business and government sectors. This paper presents factors affecting consumer payment behavior, shows data on how consumers pay in the United States, and summarizes existing literature on consumer payment choice.