One of the most interesting and topical presentations at the recent ICCOS Americas held in Miami (attended by 258 Delegates from 30 countries) was reserved for the last day. The Federal Reserve System Cash Product office has recruited members of the public to participate in the Diary of Consumer Payment Choice. The focus of the research was to uncover the truth behind the use of cash and other forms of payment across demographic segments, payments size and location/type of payment. While the research is not yet complete, some interesting trends have emerged:

• Cash is the dominant instrument for small value transactions
• Cash is a more versatile instrument in several smaller market segments
• Cash is everyone’s back-up, and critical component of the financial infrastructure
• Cash dominates small value payments, accounting for 65% of payments between $0 and %9.99 and 45% of payments between $10 and $24.99
• Cash accounts for 66.6% of person-to-person payments (gifts and transfers)
• Cash accounts for 50.3% of food and personal care payments
• Cash accounts for 42.8% of entertainment and transportation payments
• Cash accounts for 40.8% of government and nonprofit payments
• Cash accounts for 32% of auto and vehicle related payments
• Cash accounts for 30.1% of general merchandise payments
• Cash accounts for 25.6% of medical, education and personal payments
• Cash accounts for 16.2% of financial and professional payments
• Cash accounts for 7.5% of housing related payments

During the presentation the audience was asked by show of hands which demographic segment they believed used cash the most. Current beliefs, non-cash payment marketing and other payment related anecdotal evidence would seem to indicate that cash is preferred by the older generation and declines with younger demographics. Surprisingly the reverse appears to be the true story:

• 18 to 24 year olds use cash 47% of the time
• 25 to 34 year olds use cash 37% of the time
• 35 to 44 year olds use cash 40% of the time
• 45 to 54 year olds use cash 45% of the time
• 55 to 64 year olds use cash 40% of the time
• 65 year olds and older use cash 46% of the time

Other interesting and sometimes surprising metrics were also shared:

• Cash usage is relatively flat across education levels
• Cash is everyone’s first or second choice of preferred payment type
• Use of cash for small value transactions (less than $25) is fairly flat across education type
• Use of cash for large value transactions (more than $25) is greatest with those of lower education (those with less than high school education use cash more than twice as often than those in all other education categories)

Further research is warranted and the Cash Product office is committed to continuing this research for a deeper review on the use of cash and the future of cash as a payment choice for the American public.

Following are a few pictures from the recent ICCOS Americas in Miami. For those who were not able to attend, we hope that this glimpse into this important educational and informative networking event will result in your planning to attend the next ICCOS Americas, scheduled for December 8th to 10th in Miami Florida.