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Inside the 2016 Federal Reserve Payments Study

Posted by Joe Gargiulo | Thu, Jan 19, 2017 @ 04:00 PM

The long awaited, much anticipated preliminary report of the 2016 Federal Reserve Payments Study was released December 22, 2016. This 12-page edition is the sixth in a series of triennial studies conducted by the Federal Reserve since 2001, and will be followed by the full version during the second quarter of 2017.

The work aggregates statistics in US non-cash payments and reveals anticipated trends, but some of the data opens the door for garnering greater insight into specific facets of the payments industry.

paymentsAccording to the Federal Reserve, “estimates presented in this initial data release are based on survey data gathered from depository and financial institutions, general-purpose card networks, and processors and issuers of various private-label payment instruments. The 2016 study covers the total number and value of all noncash payments estimated to have been made in 2015 by U.S. consumers and businesses, including for-profit and not-for-profit enterprises, and federal, state, and local government agencies.”

Payments Security

Fraud types include counterfeit cards, lost or stolen cards, cards issued but not received, fraudulent applications and fraudulent use of account numbers.

Payments with cards using embedded microchips, intended to improve the security of in-person payments, have grown by 230% per year since 2012, but they represented only a 2% share of total in-person general-purpose card payments in 2015.

The study pointed out that the 2015 proportion of total general-purpose card fraud by value was attributed to counterfeiting. Those figures were substantially greater in the US than in countries where chip technology has been more widely adopted.

2015 Key Findings

  1. U.S. noncash payments (debit card, credit card, ACH and checks) are estimated to have surpassed 144 billion transactions with a value of almost $178 trillion (up almost 21 billion payments or about $17 trillion since 2012).
  2. Debit card payments (including payments with prepaid and non-prepaid cards) grew to 69.5 billion with a value of $2.56 trillion (up 13.0 billion or $0.46 trillion since 2012).
  3. Credit card payments reached 33.8 billion with a value of $3.16 trillion (up 6.9 billion or $0.61 trillion since 2012).
  4. ACH payments is estimated to have grown to 23.5 billion with a value of $145.30 trillion (up 3.1 billion payments or $16.29 trillion since 2012).
  5. Check payments fell to 17.3 billion with a value of $26.83 trillion (down 2.5 billion or $0.38 trillion since 2012).

A closer inspection of points two, three and five above reveals an ongoing trend that is of interest to CrossCheck as well as merchants accepting checks.

Comparing the $2.56 trillion in purchases made with debit cards and the $3.16 trillion in purchases made with credit cards against the $26.8 trillion in purchases made by check, it can be concluded that checks are preferred by consumers for making large purchases such as placing down payments at auto dealerships; buying building materials or home furnishings; or receiving care at medical, dental and veterinary offices. Checks are also widely used to make B2B payments.

CrossCheck will discuss the full version of the study when it is published, but for now, trust that checks still represent a bona fide channel for making large purchases by consumers or businesses. Learn more about "Payments as a Profit Center" by downloading our free guide for your business.

auto dealer sales, auto dealer payments, auto dealer profits

Written by Joe Gargiulo

Marketing Specialist Joe Gargiulo has 25-plus years in marketing, communications and copy writing. As a writer, he enjoys connecting story leads to all aspects of the human experience.