If you experience any difficulty in accessing content on the deluxe.com website, please contact us at 866.332.6127 or email us at and we will make an effort to assist you. Website Accessibility Policy


How will COVID-19 change the way we pay?

Woman looking in wallet

“B.C.” It’s a new milestone many are using to mark this unusual time: Before COVID-19. In just a few short weeks, so many elements of everyday life have changed dramatically. That includes how we shop and how we pay.

Just weeks into the coronavirus, an April study by PYMNTS.com already showed striking differences in consumer behaviors from just one year ago.

Comparing 2019 to 2020, they found:

  • A 35 percent increase in online shopping
  • A 25 percent increase in buying groceries online
  • A 42 percent decrease in brick-and-mortar purchasing

Businesses are making similar adjustments as they work to protect their employees and customers:

  • Retailers are deferring cash transactions for cards or touchless payments; plexiglass shields at retail checkouts are now common.
  • B2B companies are looking for ways to retain payment efficiency with a sizeable portion of staff now working from home.
  • Businesses that employ gig workers are pivoting to an “earn as you go” model that issues payment on completion of a shift, rather than once or twice a month.
  • Analysts expect real-time payments to surge as speed becomes more essential.

Even banks are reinventing themselves, with an emphasis on customer service channels and payment methods outside the usual in-person experience at the branch. It all adds up to a rapidly changing definition of “normal” payments and commerce.

Evaluating Payment Models, Customer Experiences

Experts say it takes from 21 to 66 days to form a new habit. With most Americans experiencing three or more weeks of some form of shelter in place order or other restriction, it’s not hard to foresee how today’s limitations will quickly become tomorrow’s “business as usual.”

For businesses and financial institutions, it means now is the time to evaluate your customer experience and payment model, so you’re ready to go when the economy begins its recovery.

12 Insights Into Consumer and Business Payment Behaviors

Here, we share a dozen insights into consumer and business payment behaviors, based on the latest research from the Federal Reserve, McKinsey & Company and other industry sources. These benchmarks give a sense of how far we’ve come in our adoption of electronic payment methods, and the options that are possible moving forward.

1.  Payment volumes more than doubled since 2000

Every three years, the Federal Reserve conducts its flagship payments study. The 2019 edition—the seventh in its series—shows just how far payments have come in the last 18 years.

Since 2000, the number of payment transactions in the U.S. has more than doubled. Eighteen years ago, consumers and businesses made 72 billion payments. Today, that number stands at a record 174 billion payments. That’s faster growth than the U.S. population and the U.S. gross domestic product (GDP).

The totals cover all payment methods except cash, including ACH, credit cards, debit cards and prepaid cards.

While consumers make around 82 percent of these payments by number of transactions, it’s businesses that realize around 82 percent of the dollar value.

2.  Consumers now make 90 non-cash payments each month

The Federal Reserve study also demonstrates just how ingrained electronic payment methods have become in American households. Consumers now make 90 non-cash payments each month. That’s more than double the 40 non-cash payments we made just 18 years ago.

With check use declining, the majority of those new transactions come from cards or electronic methods. It also helps that there are far more payment options, from seamless e-commerce experiences to mobile wallets and even person-to-person (P2P) transactions.

3.  Debit card, credit card and ACH have yet to plateau

Three of the most popular payment methods—ACH, debit cards and credit cards—skyrocketed in growth over the past 18 years. Looking ahead, there’s no ceiling looming in the near future either.

According to the Federal Reserve, between 2000 and 2018:

  • Credit card use increased 5.9 percent annually, from 16 billion to 44.7 billion transactions.
  • ACH use increased 10.1 percent annually, from 5 billion to 28.5 billion transactions.
  • Debit card use increased 13.4 percent annually, from 9 billion to 86.4 billion transactions.

That’s nearly 10 times more debit card transactions, six times more ACH and three times more credit card transactions today, showing just how popular these methods have become. Several factors fuel this growth, including a switch by many from checks to online bill pay, more online purchasing and new settlement windows like Same Day ACH.

The dollar value of these transactions is inversely proportional to their volume, so payment instruments with higher average values tally fewer transactions. That explains why methods like ACH credits, which are widely used for payroll direct deposit and average $3,441 per transaction, have the lowest number of transactions at 11.9 billion.

Debit cards, on the other hand, with an average value of just $36 per transaction, are favored for everyday purchases. They have the highest number of transactions at nearly 87 billion per year.

4.  We write fewer checks, but for higher amounts

Turning to checks, businesses and consumers wrote 16 billion checks in 2018—nearly four times less than in 2000. In fact, checks are the only non-cash payment method showing decreasing numbers in the Federal Reserve study. They’ve dropped 5.7 percent annually in the last 18 years.

However, while the number of checks is dropping, the average dollar value of each check is increasing. In 2018, the average amount of a check was $1,635. B2B payments are responsible for two-thirds of the funds that move by check.

Businesses recognize the value of electronic efficiencies, even with paper receivables. While American companies and consumers wrote 16 billion checks in 2018, only 14.5 billion were “paid” that way. Companies saved time and improved their cash flow by converting 1.5 billion physical checks to ACH for electronic deposit.

5.  The demise of cash is exaggerated

Our cash observations come from the tri-annual Payments Study as well as a second Federal Reserve study, the Diary of Consumer Payment Choice. This research tool tracks the daily spending patterns of a wide variety of consumers. 

Both studies show that the demise of cash continues to be exaggerated. In fact, the Federal Reserve notes “no material decline in U.S. cash usage.”

As a country, we’re making fewer trips to the ATM, but we’re withdrawing larger amounts. We’re also taking advantage of EMV-equipped debit cards for convenient cash-back transactions at point-of-sale.

From 2015 to 2018:

  • ATM withdrawals declined less than one percent.
  • The amount of cash in a typical withdrawal increased 1.5 percent.

Cash remains the most common payment instrument for transactions under $10.

6.  Credit cards show most rapid growth

In the last three years, credit cards have shown the most rapid growth of all payment vehicles. They’ve increased nearly 10 percent per year, up from 33.7 billion transactions in 2015 to 44.7 billion transactions in 2018.

The category includes cards issued by financial institutions as well as private label cards. The latter category is actually growing at an even more robust pace, at 13 percent annually.

paying online with card

7.  Our love of e-commerce boosts remote transactions

The flexibility of credit and debit cards makes them a favorite vehicle for consumers and businesses. From the monthly Netflix subscription to a charitable donation to the latest utility bill, there’s rarely a situation where they can’t be used. Even businesses have options, like virtual card payments for suppliers and covering employee travel and entertainment expenses.

That versatility—combined with our love of e-commerce—explains the growth of remote card transactions. The Federal Reserve defines “remote” as online, mail and telephone orders as well as recurring billing and subscription services paid by card.

The average value of a remote transaction is now on par with the amount of an in-person card transaction. It demonstrates how comfortable we’ve become with the ease and security of e-commerce shopping.

8.  We’re starting to treat digital wallets more like leather ones

The “pays” created a whole new category when they unveiled digital wallets a few years ago. Apple Pay, Google Pay, PayPal and others now make it more convenient than ever to pay electronically.

Digital wallet usage, while still in the early stages, is definitely more than a fad. According to McKinsey research, three out of four consumers made a mobile payment last year.

When these tools first launched, many assumed one credit or debit card would get the entire share of wallet, with consumers taking a “set it and forget it” approach. In reality, we’re starting to treat digital wallets more like leather ones and being much more savvy about how we spend.

The typical consumer loads two cards in their digital wallet. Two-thirds then switch regularly, based on their purchases. Even more switch for in-store spending. Rewards and incentives from card issuers are the biggest driver when switching between payment mechanisms. Wallet functionality also makes it easier to switch without too much complexity.

9.  Three out of four consumers still use checks

As noted, check volumes are down, with the Federal Reserve measuring 16 million checks written in 2018. Consumers write 60 percent of those checks, with an average household using 5.5 checks per month. The FDIC reports  that over two-thirds of banked households pay at least one bill each month by check.

What’s interesting is that the age gap among check users is not as wide as you might assume: all demographics, from young to old, still rely on checks occasionally. Research also shows that while the number of checks each person writes is down, the number of people using checks is actually quite stable. Three out of four consumers are check users in some way, shape or form. The only payment vehicle with higher adoption is cash, at almost 100 percent penetration.

10.  But, how we use paper payments has shifted

In their heyday, checks were the default payment mechanism for nearly every payment between businesses, consumers and even individuals. From paychecks to groceries, birthday gifts to monthly bills, the use cases for checks were nearly endless.

Today, the reasons for check use have shifted dramatically:

  • C2B checks show the greatest reduction—but still represent more than half of all checks written.
  • B2B checks have proven the most resilient; they’re declining at a much slower pace than C2C or C2B and are especially entrenched with small businesses.
  • B2C checks, for items like customer refunds, promotional items, payroll and insurance claims have also decreased.
  • P2P checks comprise the smallest share, and while electronic mechanisms like Zelle, Venmo and PayPal are available, so far they’ve had only a nominal impact.

These numbers show that efforts in the last 10 years to convert consumers to electronic bill pay for household bills, and to debit or credit card at point-of-sale retail, have paid off. However, expect check usage to remain relatively stable going forward, with reductions in volume that are far less dramatic.

11.  Electronic P2P mechanisms remain in their infancy

Whether it’s paying the babysitter, sending money to a son or daughter in college or friends splitting the dinner check, we’ve always made payments between individuals. Recently, electronic mechanisms like PayPal, Venmo and Zelle put convenient electronic rails behind these transactions.

However, research shows these P2P payments remain in their infancy. Cash and checks remain the predominant method, comprising 85 percent of P2P transaction volume and 81 percent of transaction value.

12.  Speed will define the next lifecycle of payments

Conventional payment mechanisms, from cash and checks to ACH and cards, are no longer the only option. A range of upcoming faster payment innovations mean speed will define the next phase of business and consumer payments.

One of the most interesting is Real-Time Payments or RTPs, launched in 2019 by The Clearing House. This bank-owned consortium created an entirely new set of payment rails, enabling financial institutions to move funds between payer and payee bank accounts in a matter of seconds.

RTPs operate on a “credit push” model, with funds availability occurring almost instantaneously. Another key feature of RTPs is their finality; unlike ACH or card transactions, they cannot be reversed.

This speed and irrevocability makes them ideal for certain use cases, like contract payments, house closings and mortgages.

The Federal Reserve announced plans for a similar service, called FedNow, that it intends to operate starting in 2024.

NACHA unveiled its Same Day ACH option in 2017, which performs as a “real time lite” offering. All three methods make it clear: fast, electronic payments will revolutionize transactions going forward.

Our business and personal payment habits continue to evolve. While no one can predict the full impact or duration of COVID-19, we can be sure it will forever alter certain aspects of society. Making a positive payments experience part of your go-forward plans is just one way to keep employees and customers safe and satisfied.

Toolkit: Coronavirus (COVID-19)

Stay up-to-date on ways to advance your business during the outbreak.

Subscribe to the Toolkit

Get tips to keep you, your employees and your business going


Keep your business moving forward

businesswoman using tablet

Blog Enterprise

Mindshifts to modernize AP and AR processing

The technology is here, but few enterprises report high levels of automation in their Accounts Payable or Accounts Receivable processes. Here are three mindshifts to consider when modernizing enterprise financial operations.