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About


Take On Payments, a blog sponsored by the Retail Payments Risk Forum of the Federal Reserve Bank of Atlanta, is intended to foster dialogue on emerging risks in retail payment systems and enhance collaborative efforts to improve risk detection and mitigation. We encourage your active participation in Take on Payments and look forward to collaborating with you.

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December 27, 2021

Federal Reserve Payments Study Finds Effects of the Pandemic in US Payments

It's the week before the New Year, and we promised not to post this week. But I can't resist letting you know that a new report from the Federal Reserve Payments Study reports quarterly data related to the effects of the COVID-19 pandemic on US payments. This is interesting and important news, so I'm breaking the holiday hiatus.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study, on the Federal Reserve's websiteOff-site link, includes new information about core noncash payments and some evolving areas of payments:

  • While data from 2019 largely show a continuation of past payment trends, with card and ACH both gaining share at the expense of check, 2020 data show that payment behavior changed sharply with the COVID-19 pandemic, with ACH gaining substantially as a share of noncash payments by both number and value.
  • The share estimates combined with other information imply that ACH was the only one of the three core payment systems to grow by number in 2020.
  • The total number of card payments declined in 2020, driven by a marked decline of in-person card payments. This was the first annual decline in the number of card payments recorded by the payments study.
  • As in-person card payments dropped in spring 2020, remote card payments took up much of the slack. Later in the year, in-person card payments recovered somewhat.
  • The pandemic may have helped spur growth of innovative payment methods, such as in-person contactless card, digital wallet, and person-to-person (P2P) payments.
    - First-time use of bank-sponsored P2P payments spiked in the second quarter of 2020, a time of business closures and stay-at-home orders.
    - First-time use of digital wallets was highest in the third quarter, when some restrictions on in-person shopping were lifted. When used with a mobile device, a digital wallet provides a low-touch option for in-person card payments.

The report covers card (credit, non-prepaid debit, and prepaid debit), ACH, and check payments.

Go to the Federal Reserve's websiteOff-site link to see other findings.

Happy new year! We look forward to continuing the payments conversation with you in January 2022!

December 27, 2021

Federal Reserve Payments Study Finds Effects of the Pandemic in US Payments

It's the week before the New Year, and we promised not to post this week. But I can't resist letting you know that a new report from the Federal Reserve Payments Study reports quarterly data related to the effects of the COVID-19 pandemic on US payments. This is interesting and important news, so I'm breaking the holiday hiatus.

Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments Study, on the Federal Reserve's websiteOff-site link, includes new information about core noncash payments and some evolving areas of payments:

  • While data from 2019 largely show a continuation of past payment trends, with card and ACH both gaining share at the expense of check, 2020 data show that payment behavior changed sharply with the COVID-19 pandemic, with ACH gaining substantially as a share of noncash payments by both number and value.
  • The share estimates combined with other information imply that ACH was the only one of the three core payment systems to grow by number in 2020.
  • The total number of card payments declined in 2020, driven by a marked decline of in-person card payments. This was the first annual decline in the number of card payments recorded by the payments study.
  • As in-person card payments dropped in spring 2020, remote card payments took up much of the slack. Later in the year, in-person card payments recovered somewhat.
  • The pandemic may have helped spur growth of innovative payment methods, such as in-person contactless card, digital wallet, and person-to-person (P2P) payments.
    - First-time use of bank-sponsored P2P payments spiked in the second quarter of 2020, a time of business closures and stay-at-home orders.
    - First-time use of digital wallets was highest in the third quarter, when some restrictions on in-person shopping were lifted. When used with a mobile device, a digital wallet provides a low-touch option for in-person card payments.

The report covers card (credit, non-prepaid debit, and prepaid debit), ACH, and check payments.

Go to the Federal Reserve's websiteOff-site link to see other findings.

Happy new year! We look forward to continuing the payments conversation with you in January 2022!

November 22, 2021

We Are Thankful For…

Two years ago, prior to Thanksgiving, I asked each Risk Forum member to provide me the one thing they were thankful for in payments. This year, I posed a bit of a different question to my colleagues and asked them what payment innovation they are most thankful for. Without further ado, the Risk Forum presents our 2021 Thanksgiving week "What payment innovation are you thankful for?" list.

  • Nancy Donahue, project manager: I'm thankful for innovation in voices contributing to payments because it's through these different and diverse viewpoints that the industry develops solutions that are inclusive of all consumers!
  • Claire Greene, payments risk expert: I am thankful for the electronic receipt of bills and automatic bill pay. As a payments expert who doesn't want to think about her personal payments, I remember the monthly stack of envelopes on my dining room table.
  • Scarlett Heinbuch, payments risk expert: I am thankful for the innovation of dongles and payments apps that make it easy for small businesses and individual sellers to accept credit card payments.
  • Douglas King, payments risk expert: I am thankful for innovation in payroll that makes my payday afternoons more flexible through the ability to receive my paycheck via direct deposit. Prior to direct deposit, I distinctly remember receiving a check at my job and then heading to a bank only to wait in a long teller line on Friday afternoons with others to deposit our paychecks.
  • Dave Lott, payments risk expert: I am thankful for the ability to make contactless payments with my debit card at stores and gas pumps as it is much faster.
  • Sally Martin, senior business analyst: I am also very thankful to be able to schedule payments electronically, either once or as many times as I want out to infinity. Keeps me honest and doesn't allow me to rob Peter to pay Paul as easily. Also, I don't have to think about doing it every month when the due date comes along.
  • Catherine Thaliath, project management expert: I am thankful for digital wallets that make it convenient to store my credit cards, boarding passes, concert tickets, loyalty cards, etc., all in one place!
  • Jessica Washington, payments risk expert: I am thankful for mobile deposit capture. When I do get lucky enough for someone to give me money (outside employer) and it is a check (whah, whah) I love that I can pop that moolah into my account right after I open the mail or birthday card.

And we are thankful for YOU, our readers of Take On Payments and supporters of the Risk Forum. We sincerely appreciate your comments, kudos, and criticism, and hope that you all find value in the information we provide and share. As we enter into these crazy last weeks of 2021, we wish you and yours a wonderful holiday season.

August 23, 2021

A Mindset Shift among the Younger Generation

Back in 2019, I wrote a post about millennials being risk-averse when it comes to finances. This is largely due to a number of financial hurdles and crises they had to face growing up—the 9/11 attacks, the Great Recession, an unstable job market—all events that negatively shaped this generation's attitudes toward taking financial risks and the financial system in general. In fact, a surveyOff-site link found that of the millennials in credit card debt, more than a third said "debt is the scariest aspect of their daily lives," more so than the thought of dying or of war. Move ahead two years and here we are in another global crisis, with the younger generation taking yet another economic hit. According to some researchOff-site link from the Federal Reserve Bank of St. Louis on employment between 2000 and 2020, "weakness in the job market in 2020 was experienced very differently across age groups and genders. Young men and women [born after 1985] felt the greatest impact of lower employment during that period."

The pandemic has forced everyone to rethink many things: how we work, how we conduct business, how we communicate with others, and how we use technology, among other things. But could it have helped push millennials and Gen Z-ers to think more positively about taking financial risks? As my Risk Forum colleague Claire Greene noted in her recent blog post, millennials became more likely to have a credit card during the pandemic in 2020—66 percent of millennials had a credit card in 2019, and nearly 80 percent did in 2020. In addition, more millennials are buying homes now and are opting into other long-term investments rather than spending money on rent and more short-term activities.

Of course, it's important to point out that this change in millennial behavior may not be solely attributable to COVID-19, but I believe the pandemic may have been a factor. A studyOff-site link the Pew Research Center conducted showed that in July 2020, a majority of young adults (ages 18–29) in the United States resided with one or both of their parents, something that hasn't happened since the Great Depression. A number of relief measures offered in response to the pandemic—interest rate cuts, economic impact payments, student loan payment deferments, and flexible credit card repayment options, coupled with the money saved from living with mom and dad—could all have contributed to millennials' decisions to take more financial risks. Other factors independent of the pandemic, such as the increased availability of financial education tools and millennial-centric innovations in financial technology, may have also contributed. Whatever the reasons, I'm happy to see that taking financial risks is being viewed more positively among the younger generation, despite all the chaos of this past year.