What Payment Methods Do Consumers Use?

A recentstudy by the Boston Federal Reserve compared the use of different payment methods by consumers in 2006 and 2008.  As might be expected, the study found that the largest change in consumer practices involved the use of electronic payments.  Debit cards were the most intensively used payment method, accounting for 35% of transactions, while the use of checks dropped from 38% of all transactions to only 16%.

The study identified a payment method’s setup and recordkeeping requirements as especially important in determining whether consumers adopt the method.  Convenience, cost, and security affected whether a method was used.