Survey of Consumer Payment Choice: Preliminary Results 2008

Transcription

1 Survey of Consumer Payment Choice: Preliminary Results 2008 Marianne Crowe Federal Reserve Bank of Boston FedExchange 2009 May 6, 2009

2 Presentation Overview Survey of Consumer Payment Choice (SCPC) Program & Methodology Preliminary 2008 SCPC Survey Results & Industry Trends Future Survey Plans 2

3 Why the Need for Public Consumer Payments Data Private data limitations Often statistically weak or lacking details Proprietary or prohibitively expensive Public data advantages Relatively unbiased, public good Central Bank technical & research expertise 3

4 2008 SCPC: Background & Methodology RAND American Life Panel (ALP) Panelists drawn from Michigan Survey of Consumers participants Ages 18+ (since 2006) Longitudinal panel of consumers possible Participants remain in ALP indefinitely Paid to take all surveys, but on a voluntary basis Not designed as a true panel but can match consumers 2008 SCPC has 1,010 respondents Internet/TV survey (technology provided) Mean response time: 34 minutes 4

5 Most Respondents had Primary Checking Account Account by Type of Financial Institution, % 1.7% 20.8% 45.4% Large commercial bank Small commercial bank Credit union 31.2% Internet bank Other 5 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

6 Payment Trends Industry Perspective Payment method share of dollar value (all merchant categories) 60% 53% 40% 37% 20% 0% 21% 18% 4% 3% 1% % 15% 14% 7% 2% Cash Check GP Credit Cards PL Credit Cards Debit/ATM Other SOURCE: Visa USA Research Services. (2006) Visa Payment Panel Study. 6

7 SCPC Payment Adoption Trends Check & Card Check Credit Card Debit Card SVC SOURCE: Survey of Consumer Finance; 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

8 SCPC Payment Adoption Trends Bill Pay Automatic Bill Payment Online Banking OBBP SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

9 SCPC Number of Payment Methods Used Number of Payment Methods per Consumer Check, Credit Card, Debit Card, ACH Auto Debit SOURCES: Survey of Consumer Finance ( ) and Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

10 SCPC - Consumers Discontinue Use of Some Payment Methods Over Time Consumer Payment Method Discard Rate* 35% 30% 33.28% 29.41% 25% 20% 15% 10% 5% 2.25% 3.10% 14.64% 8.55% 1.96% 7.01% 4.69% 4.69% 13.41% 4.60% 0% *The discard rate is percentage of consumers who adopted payment method in the past but did not have it in the fall of SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

11 SCPC - Consumer Experience with Payment Method 25 Average Number of Years Since Consumer First Adopted Payment Method, Years Checking account ATM card Telephone banking Mobile banking Online banking Debit card Credit card Stored value card Online banking bill payment Automatic bill payment 11 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

12 Industry - Electronic Payments Now Exceed Paper-based (Check & Cash) Payments 12 SOURCE: Hitachi Consulting & BAI, 2008.

13 SCPC Consumer Payment Use Consumer Share of Payment Volume by Payment Instrument, % 11.3% Paper 38.2% Payment card 49.6% Electronic means of payment Other 13 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

14 SCPC Consumer Payment Use Consumer Share of Payment Volume by Transaction Type, % Bill Payments 26.6% Online Purchases 64.3% 8.8% POS and In-Person Payments Other (Purchases by Travelers checks and Money Orders) 14 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

15 Industry - Consumer Bill Payment Preference & Mix 15 SOURCE: Hitachi Consulting & BAI, 2008.

16 Industry - Consumers Have Multiple Payment Options for Automatic Bill Payments 16 SOURCE: Hitachi Consulting & BAI, 2008.

17 SCPC - Consumer Adoption of Automatic Bill Payment Continues to Grow Percent of Consumers Consumer Adoption of Automatic Bill Payment (all types) SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

18 SCPC Consumer Use of Automatic Bill Payment Methods 60% Percent of Consumers Using Automatic Bill Payment Methods, % 40% 30% 20% 10% 0% Debit Card Credit Card Bank Account Income 18 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

19 SCPC Automatic Bill Payment Mix Percentage Mix of Automatic Bill Payments by Payment Method, % 15% 12% Debit Card Credit Card Bank Account 63% Income 19 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

20 SCPC Online Banking Bill Payment Growth 60 Consumer Adoption of Online Banking Bill Payment 50 Percent of Consumers SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

21 SCPC Banking by Phone Percent of Consumers Consumer Access to Bank Accounts via Telephone, 2008 Telephone Banking Mobile Banking SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

22 SCPC Cash Use (Volume) Percentage of Payments Made with Cash Share of cash payments in category Bill Payments mail or in person Essential Retail Payments Other Retail Payments Other Nonretail Payments All Other Payments Total Category share of total payments SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision. Payment category Essential retail payments Other retail payments Other non-retail payments All other payments Examples Groceries, prescription drugs, restaurant food, gasoline General merchandise, electronics, household goods, hardware, office supplies, other Tolls, medical, entertainment, charitable donations, person to person payments, other All payments made online, bill payments, payments made by travelers checks or money orders 22

23 Industry - Cash Still Used at Most Retail Payment Venues but Declining at POS 23 SOURCE: Hitachi Consulting & BAI, 2008.

24 Industry - Consumers Substitute Other Payment Methods for Cash 24 SOURCE: Hitachi Consulting & BAI, 2008.

25 SCPC - How Much Cash Does a Consumer Carry? Average Cash Holdings and Withdrawals Current Cash Holdings Typical Cash Withdrawals Total ($) On Person ($) Other ($) Monthly Amount ($) Typical Amount ($) Monthly Frequency (#) SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision. 25

26 SCPC - Cash Withdrawals Withdrawal LOCATIONS where consumers get cash most often - % 1 st Choice 2 nd Choice 3 rd Choice ATM Bank Teller Check Cashing Store Retail or Grocery Store Employer Family Other Withdrawal METHODS consumers use to get cash most often % 1 st Choice 2 nd Choice 3 rd Choice ATM or Debit card Account withdrawal Cash personal check Cash paycheck Cash back from debit card Paid by employer in cash Unknown SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision. 26

27 Industry Why is Cash Use Declining? 27 SOURCE: Hitachi Consulting & BAI, 2008.

28 SCPC - How Consumers Rate Payment Method Characteristics PAYMENT Acceptance Acquisition & Setup Control over Payment COST Ease of Use Recordkeeping Security Speed AVG of All CHARs. Cash Check Debit card Credit card Stored value card Electronic account deduction AVG of All Pay Meth NOTE: Ratings are on a 5-point scale (1 is lowest, 5 is highest) 28 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

29 SCPC Summary - Change in Payment Use Past & Future Actual use, past three years ( ) % of consumers Cash Checks Debit Cards Credit Cards Pre-Paid Cards Automatic Bill Payment Expected change in use, next three years ( ) Online Bill Payment % of consumers Cash Checks Debit Cards Credit Cards Pre-Paid Cards Automatic Bill Payment Decline Constant Increase Online Bill Payment 0 29 SOURCE: 2008 Survey of Consumer Payment Choice; preliminary and unofficial statistics, subject to revision.

30 SCPC Production Schedule aggregate data released (Summer) 2009 revised SCPC implemented (Fall) 2008 data by demographics released (Winter) data released (Spring) micro data released (Summer) 2010 revised SCPC implemented (Fall) 2011 and beyond TBD 30

31 More information To download this presentation and SCPC data later this year, or for more information about: Consumer Payments Research Center Federal Reserve Bank of Boston visit our web site: 31

32 32 QUESTIONS?