Consumer behavior in the United States is changing, at least where payments are considered. A new Federal Reserve Payments Study confirms card payments and innovative payment methods keep gaining ground. In addition, the ongoing COVID-19 pandemic forces consumers to change their overall behavior in this segment.
More Card Payments
One of the biggest changes is the volume of card payments since the COVID-19 pandemic began. More specifically, there is a strong increase in the number of transactions and the overall value of said payments. That rise is apparent across online and over-the-phone payments alike, making it one of the more popular payment methods across the United States today.
At the same time, this growth is a bit surprising. The year 2020 noted a substantial decline in card payments of up to nearly 13%. That decline mainly occurred due to a dropoff in in-person card payments. So even though remote card transactions went up, that wasn’t sufficient to offset the overall negative trend for that year.
However, the year 2020 confirms the decline in transaction numbers has another side effect. More specifically, consumers seemed to favor card payments for high-value purchases rather than everyday expenses. As remote transactions now become the primary source of transaction volume for payment cards, things are bound to get interesting in the years to come.
Despite this shifting momentum, in-person transactions are still popular where contactless transfers are considered. Although such a payment can only be done for small amounts, it provides tremendous convenience for those who want to quickly get in and out of a store. Even so, COVID-19 restrictions still favor remote payments, as online shopping remains the go-to approach for many consumers.
ACH Payments Gain Ground
Another intriguing trend in the payment landscape across the US is how ACH payments gain tremendous growth. More specifically, businesses and individuals turned to the ACH Network to make transactions due to pandemic-related disruptions. A strong increase from 2019 and 2020 as recorded, with more of the same momentum taking place throughout 2021.
The biggest increases originate in Direct Deposits, internet-based bill payments, and B2B transactions. That is remarkable, as it is unusual to simultaneously see strong growth across all three segments. Moreover, the Same Day ACH payment volume grew by over 70% in 2021, confirming there is a strong demand for this service.