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Insider’s report
on payments:
Fed updates
payments data
By Patti Murphy
C ards – credit, and especially debit – continue to
lead the charge toward noncash payments in
the United States, and card-not-present (CNP)
transactions are rising sharply. Meanwhile,
growth in automated clearing house (ACH) payments is
slowing, as is the decline in check payments. These are
key trends revealed by the recently released 2016 Federal
Reserve Payments Study.
The Fed conducts extensive research into noncash payments
(exclusive of wire transfers) every three years, soliciting
input from financial institutions and payment networks.
Its latest study details card, check and ACH payments
in 2015. It also addresses card fraud and security trends.
For example, the study revealed that payments secured
with EMV (Europay, Mastercard and Visa) chips and chip
readers grew 230 percent between 2012 and 2015, but EMV
cards accounted for just 2 percent of all in-person, general-
purpose card payments in 2015.
Research also revealed that counterfeit card fraud in
the United States is substantially higher than in other
developed economies, where fraud is more prevalent in
CNP environments. Pointing to EMV rollout experiences
in other countries, the Fed predicted counterfeit card
fraud will also fall in the United States once a majority
of merchants are running card payments through EMV-
compliant terminals.
More than 144 billion noncash payments were made in
2015 totaling nearly $178 trillion in value, according to
the report. Payments by card (credit, debit and prepaid)
represented well over half the total number of transactions,
yet only a fraction of total value: 103.3 billion transactions slightly by value (from $50 billion to $70 billion). EBT card
worth $5.7 trillion, up 19.9 billion transactions and $1.07
trillion in value from 2012.
In each of the three years since the Fed's last study, noncash Here are additional key data points from the Fed's report:
payments grew 5.3 percent, while the combined value of
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those payments rose 3.4 percent per year. Meanwhile, the
inflation rate hovered between 1 percent and 2 percent
annually during that period, while gross domestic product
grew at an average of about 2 percent per year. "The
distribution of noncash payments in 2015 is the outcome
of many decades of change," the Fed wrote. "Much of the
change has occurred in the new millennium."
Prepaid growth lags credit, traditional debit
Debit cards continue to dominate the noncash payments
pie, with more than twice as many transactions as there
were credit card payments in 2015. Credit cards are used
for larger payments, however, as the data indicates the total
value of credit card payments in 2015 exceeded that of debit
card payments by about 23 percent. The Fed's debit data
includes payments using traditional debit cards (those tied
to checking accounts) and all types of prepaid debit cards
(general purpose, private-label store, government-issued,
reloadable and single use).
Credit card payments charted the fastest growth among
noncash payment formats. These payments increased at
an annual rate of 8 percent by number and 7.4 percent by
value from 2012 to 2015, with most of that growth driven by
general purpose credit cards. In fact, the 6.9 billion increase
in transactions since 2012 exceeded each of the previous
three-year study periods for credit cards since 2000, the
Fed noted.
The data also indicate a swift rise in CNP credit card
transactions, accounting for 19 percent of all general-
purpose card payments in 2015, up from 16 percent in
2012. With debit cards, growth in card-present payments
was twice that of CNP payments, according to the Fed's
preliminary data. (Given the extensive data collection and
analysis required, the Fed regularly updates its payments
data reports between triennial studies.)
Meanwhile, growth in payments using prepaid cards
(general purpose, private label and government-
administered electronic benefit transfer (EBT) cards
dropped to the lowest annual rate since the Fed started
collecting prepaid card data in 2000. The average value of
general purpose reloadable (GPR) cards also fell slightly,
from $35 in 2012 to $34 in 2015, the Fed reported. Private-
label prepaid card payments declined slightly by number,
from 3.7 billion in 2012 to 3.6 billion in 2015, and rose
payments also rose slightly, to 2.6 billion payments totaling
$80 billion in value.
• 69.5 billion debit card transactions were made in
2015 with a combined value of $2.56 trillion.
• 5.8 billion of these were ATM cash withdrawals.
• 9.9 billion were payments using prepaid debit
cards.