six payment methods (cash, check, credit card, debit card, direct payment, e-bill) used for 16 different types of transaction in the U.S., such as housing, grocery, dining, health, and car expenses. Transaction-specific payment method usage would give a better understanding of changes in payment method use than those based on mere “Did you use this payment method for any transaction?” question.

1. New Mexico State University
Payment Instrument Utilization for
DISCUSSION
• Transaction-specific payments show
Specific Transaction Types different prevalence and trends than
overall use
- E.g.: While check use for the “use for any”
M. Fahzy Abdul-Rahman, Ph.D., M.P.H. Figure 2. House Payment Cash
transaction was consistent and very high, we
70% Check Figure 8. Apparel Cash
60% Credit
50%
Check found a decreasing trend of check use in almost
ABSTRACT 50% Debit 40% Credit all of the transactions studied.
Figure 1. Use for Any Transaction
Cash 40% Direct
30%
Debit • $ Price of transaction matter
Using Consumer Finance Monthly data from 2007 to 100% Check 30%
E-Bill Direct - Expensive: checks and credit cards
Other P 20% E-Bill
2010, we look into six payment methods 90% Credit Card 20% - Less expensive: cash
Others Other P
(cash, check, credit card, debit card, direct payment, e- 80% Debit Card 10% N/A
10%
Others
• “Not applicable” & “Other (Payment
bill) used for 16 different types of transaction in the 70% Direct Payment 0% Home Own 0% N/A Method)” categories increased
U.S., such as housing, grocery, dining, health, and car E-Bill 2007 2008 2009 2010 2007 2008 2009 2010 - Increased for housing, household
60%
expenses. Transaction-specific payment method usage Money Order Figure 3. Utilities Cash Figure 9. Personal Care Cash goods, dining, car payment, and entertainment
would give a better understanding of changes in 50% 70% 70%
Other, Listed Check Check - Due to economic crises
payment method use than those based on mere “Did 40% 60% 60%
Other, Unlisted Credit Credit - “Other (Unlisted)” category increased for housing
you use this payment method for any transaction?” 50% Debit 50%
30% N/A Debit payments, grocery, doctor and health
question. For instance, check usages in the last month 40% Direct 40%
20% Direct services, and medicine transactions
Smart Card 30% 30%
showed very high overall (i.e. use for any transaction) E-Bill E-Bill
• Debit and credit card use tended to be
10% Pay Day 20% 20%
use in all the four years compared but actually showed a Other P Other P
0% HELOC 10% Others 10% similar for many transactions
decreasing use trend when examined by specific Others
transactions. Homeowner 0% N/A 0% N/A • Increasing use of direct payments and e-bill
2007 2008 2009 2010
2007 2008 2009 2010 2007 2008 2009 2010
RESULTS Cash Figure 10. Car Payment Figure 14. Medicine Cash
Figure 4. Household Goods Cash 50% Check
40% 70%
Check Check
Table 1. Percent of Respondents Who Selected Certain Payment Methods for Certain Transactions, 2010 (n = 2,544) 35% 60% 40% Credit
Credit Credit
30% Debit
Debit 50% Debit
25% 30%
40% Direct
20% Direct Direct
Transaction (%) Credit Debit Direct Other, Other, Not E-Bill 30% E-Bill
20% E-Bill
Cash Check E-Bill 15%
Other P
card card payment Listed Unlisted applicable 10% Other P 20% Other P 10%
10% Others
5% Others Others
0% N/A
Use for any purpose 95.9 88.2 67.3 38.6 35.1 52.8 11.3 34.9 (N/A) 0% N/A 0% N/A
2007 2008 2009 2010
2007 2008 2009 2010 2007 2008 2009 2010
Figure 5. Grocery Cash Figure 11. Personal Care Cash Figure 15. Entertainment Cash
Mortgage, or rent 6.8 37.9 0.6 1.1 13.0 13.3 3.5 0.2 28.2 50% Check 50% Check
70%
Check
3.3 28.7 0.4 0.7 16.2 16.3 0.5 0.2 37.5 60%
Homeowner 40% Credit 40% Credit Credit
Debit Debit 50% Debit
Utilities 11.3 52.0 2.6 3.8 13.1 21.2 1.9 0.3 2.2 30% 30% Direct
Direct 40% Direct
HH furnishings and eq. 23.9 28.4 16.8 9.4 1.7 4.4 0.1 0.1 25.5 20% E-Bill 20%
E-Bill
30% E-Bill
Other P
Groceries 39.4 20.1 21.0 27.0 0.4 1.5 0.0 3.5 0.9 Other P Others 20% Other P
10% 10%
Dining out 45.9 6.0 26.2 21.8 0.2 0.3 0.0 0.4 11.8 Others N/A 10% Others
0% N/A 0% Gas 0%
Cig. & alcoholic beverage 28.8 4.1 13.3 11.8 0.3 0.2 0.1 0.5 47.2 N/A
2007 2008 2009 2010 2007 2008 2009 2010 2007 2008 2009 2010
Apparel 37.4 12.0 35.3 23.7 0.4 0.2 0.1 0.7 5.3 Figure 6. Dining Cash Figure 12. Car Repair Cash
60% 35% Figure 16. Taxes Cash
Personal Care 59.4 13.9 10.0 14.5 0.1 0.0 0.0 1.0 9.6 Check Check 60%
50% 30% Check
Car payment 4.9 14.4 1.1 2.0 8.2 7.7 0.6 0.5 63.6 Credit Credit
25% 50% Credit
40% Debit Debit
Gasoline 34.1 6.7 31.4 24.2 0.6 0.5 0.0 0.3 8.5 Direct 20% Direct
40% Debit
30% Direct
Car repair, services 28.1 21.2 28.4 16.4 0.5 0.2 0.0 1.1 14.3 E-Bill 15% E-Bill 30%
20% 10% E-Bill
Medical services 21.1 32.6 16.6 13.7 1.2 1.4 0.2 25.3 5.4 Other P Other P 20%
10% Other P
Others 5% Others 10%
Medicine 36.4 15.9 22.3 20.8 0.3 0.3 0.0 11.1 5.9 0% N/A 0% N/A
Others
0% N/A
Entertainment 50.3 5.2 17.5 16.8 0.1 0.7 0.0 0.9 18.2 2007 2008 2009 2010 2007 2008 2009 2010
2007 2008 2009 2010
Income and property tax 12.7 49.2 2.1 3.7 7.5 4.7 0.3 6.5 19.6 Figure 13. Doctor &
Figure 7. Cigarettes and Figure 17. Insurance
Insurance premiums 13.0 48.5 5.0 4.7 16.4 8.9 1.5 2.0 7.2 Health Services Cash
Alcoholic Beverages Cash 60%
Check
11.6 9.2 37.0 15.0 34.6 25.5 7.6 1.1 (N/A) 50%
Use for any other purpose Cash Check 50% Credit
50% Credit
Check 40% 40% Debit
40% Credit Debit Direct
30% 30%
Debit Direct E-Bill
30% 20%
Direct 20% E-Bill Other P
20% E-Bill Other P 10% Others
10%
Other P Others 0%
10% N/A
Others 0% N/A
2007 2008 2009 2010
0% N/A 2007 2008 2009 2010
2007 2008 2009 2010