The Federal Reserve has updated its Federal Reserve Payments Study (FRPS) to include a recent surge in remote and contactless payments.
Specifically, changes in card payments and increased adoption of innovative payment methods following the emergence of COVID-19 were added to the study. For example, due to the pandemic, 2020 saw an unprecedented decline of 11.7 billion, or almost 13 percent, in the number of in-person card payments. That decline was accompanied by a similarly unprecedented surge of 8.7 billion, or almost 24 percent, in the number of remote card payments.
Despite the overall decline in the total number of card payments, the total value of card payments increased once again in 2020. This suggests that consumers consolidated their card spending into fewer, higher-value purchases.
Further, the total value of remote card payments exceeded that of in-person card payments in 2020 for the first time. The rapid increase in remote card payments in 2020 was driven primarily by a surge in e-commerce. Fed data shows that the greatest shift to remote card payments occurred in the second quarter of 2020.
In addition, new payment technologies took hold in 2020, with the share of in-person card payments initiated with contactless technologies increasing many times over. Also, card payments initiated with digital wallets, which securely store payments information on mobile devices or online, saw similar growth in recent years. Mobile wallets saw accelerated adoption in the second half of 2020. Finally, adoption of person-to-person payments between bank accounts also exhibited growth in 2020 with a surge in use in the second quarter.
The payment study is a collaborative effort of the Federal Reserve Bank of Atlanta and the Federal Reserve Board.