In 2009 recession-hit Americans cut back on their use of plastic cards and returned to cash, according to figures from the Federal Reserve Bank of Boston.
According to a survey of 2169 Americans, conducted by the bank's Consumer Payments Research Center (CPRC), the average person made 64.5 payments per month in 2009, down slightly from 67.4 in 2008.
Debit cards were the most commonly used instrument at 19 payments per month, ahead of cash at 18.4. However, the gap narrowed considerably from 2008 when Americans used debit cards for 21.2 transactions per month compared to just 14.5 for cash.
Meanwhile, fewer Americans actually held debit cards in 2009; 77% compared to 80.2% the previous year. A similar decline was seen for credit cards; 72.2%, down from 78.3%.
Just under half of respondents - 48.8% - have set up online banking bill payment by 2009 and 56.3% have used bank account number payments - both down on 2008. The noncash payment instrument still held by most Americans is the old-fashioned cheque - 85.4%.
The CPRC says that weaker economic conditions probably encouraged a shift away from credit card payments, for both supply and demand reasons, and perhaps toward cash because it can help cut costs and improve budgeting. However, the centre also stresses that changes in government regulations on plastic cards may also have played a part.
Scott Schuh, director, CPRC, says: "For many years, consumers had been migrating away from paper instruments toward cards and electronics. In 2009, consumers reversed that trend and moved back to more reliance on cash. The findings released today raise the important question of whether this move signals a permanent reversal or a transitory response to the severe recession."
Overall, the centre concludes that the long term trend away from paper instruments to cards and electronics payments appears to remain on track. About one in three consumers have at least one of the many forms of pre-paid card, and 30% have a nonbank payment account, such as PayPal or Google Checkout.
Meanwhile, mobile payments are slowly gaining a foothold in the market. About three per cent of respondents have made an m-payment, with SMS text messaging still the dominant means although one per cent have used their handset for a contactless transaction.
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