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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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January 18, 2022

Payments Report Sheds Light on Pandemic’s Early Impact

Cast your mind back to spring 2020, the early months of the COVID-19 pandemic. With my apologies for the bad flashback, did you change how and where you shopped that spring? Maybe you ordered groceries online for the first time. Maybe you decided to skip browsing at your favorite clothing store. Maybe you exchanged eating out for ordering in.

You can see glimmers of your behavior—and that of consumers and businesses here in the United States—by looking at fluctuations in the mix of credit and debit card payments made remotely and in person in spring 2020.

Perhaps you remember making fewer in-person payments in spring 2020 because you were reluctant to be out and about, you worked at home, or businesses were closed. The Federal Reserve Payments StudyOff-site link (FRPS) recently reported that the number of in-person card payments dropped 19 percent from the first quarter of 2020 to the second.

Perhaps you moved some shopping online. The number of remote payments (including purchases and bills) was up 18 percent from Q1 to Q2 2020. You can see the combined effect of these changes in the chart below. As a percentage of general-purpose card payments by number, in-person payments dropped from more than 68 percent in the first quarter to less than 60 percent in Q2 (shown by the red line in the chart below).

In-person payments as a share of all card payments recovered somewhat in later quarters to total 64 percent of all general-purpose card payments for the year 2020 (the blue line in the chart), a substantial drop from 72 percent in 2019.

chart 01 of 01: Shares of general-purpose card payments made in person by number

The December report, Developments in Noncash Payments for 2019 and 2020: Findings from the Federal Reserve Payments StudyOff-site link , also contains quarterly data for depository institution accounts with digital wallet activity and with P2P activity using bank-sponsored apps.

January 10, 2022

What We'll Be Watching in 2022

At our end-of-the-year Talk About Payments webinarvideo file in December, we noted that the global pandemic has touched every aspect of our personal and professional lives. The tragic loss of life, risk of illness, surge in remote work, restrictions on or shutdowns in business operations, and supply chain disruptions: these are the factors that affected the behavior of consumers and businesses.

As we enter 2022, none of us knows what lies ahead for consumer payments behavior. After all, as one Nobel prize-winner said, "We are prone to overestimate how much we understand about the world and to underestimate the role of chance in eventsOff-site link."

For that reason, we are not making any predictions when it comes to payments. Instead, each of us in the Retail Payments Risk Forum will be closely watching the trends and issues in 2022. Throughout the year, we will blog on these items based on research from the Federal Reserve or external sources.

  • Nancy Donahue: As the United States continues to expand and improve broadband infrastructure, I am interested in the long-awaited 5G rollout currently scheduled to begin January 19. As we start the year with a return to virtual learning in some school districts and continued remote work for many people in the labor force, access to high-speed broadband internet remains on the forefront as an important component of financial and economic inclusion.
  • Claire Greene: Flashing my phone or tapping my watch is fun, but I'm enamored of the information content that flows along with newer ways to pay. So for 2022, I'm excited about QR codes. Increasingly since March 2020, QR codes have shown their value as a physically distanced information delivery system. I can access menus, maps for museums and walking trails, theater programs, even my vaccination card. My question for next year is: In the United States., will QR codes become a popular way to pay?
  • Scarlett Heinbuch: Cash—its preservation, usage, and merchant acceptance—remains an interest area to watch in 2022, along with the rise of digital currency. I am interested to see how these payments streams converge and coexist in the coming years.
  • Mary Kepler: Although contactless payments have been around for quite some time, the concept didn't seem to catch on in the United States until the pandemic provided a reason to avoid touching things. I'll be watching for the tap-to-pay trend, and other contactless applications, to continue to grow.
  • Doug King: The evolution of buy now, pay later (BNPL) as well as the emergence and growth of account-to account paymentsOff-site link in retail.
  • Dave Lott: Since its peak in the second quarter of 2020 at 16.1 percent, ecommerce sales as a percentage of overall retail sales has remained strong. Still, it has declined to 120 basis points over its prepandemic level of 11.8 percent. What levels will in-person shopping reach as we start another year still in the throes of the pandemic? Related to that payment behavior, how will third-party delivery services be affected?
  • Catherine Thaliath: With the acceleration of digitization efforts in business-to-business payments, I am curious to see what the future holds for accounts payable/accounts receivable automation, paper checks, virtual cards, etc.
  • Jessica Washington: Risk and fraud mitigation techniques and tools are what I’m watching. We have been seeing rapid growth and adoption of innovative payment services. The payments industry, including banks, fintech and regulators, will need to keep pace and work together on how we fight fraud and mitigate risks.

So, what are your "must watch" payments issues and trends for 2022? Let us hear from you.

Happy new year from the Risk Forum team!

Photo of RPRF

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 6, 2021

Lather, Rinse, Repeat: 2021 Year-in-Payments Review

I have always believed that the instructions "lather, rinse, repeat" on the shampoo bottle are a marketing ploy to sell more shampoo. Colloquially, the phrase has taken on the meaning of continually repeating the same actions or behaviors. As the Retail Payments Risk Forum team members prepare for our annual look-back at payments news and developments, we're asking ourselves, "How different was 2021 for consumers and businesses compared to 2020? Or was it a case of lather, rinse, repeat?"

With a global pandemic emerging in early 2020, consumers, businesses, and payments providers were forced to consider their payments choices in ways not before experienced. Cash acceptance and use, coin circulation challenges, contactless adoption, migration to e-commerce for everyday items like groceries, and financial inclusion issues highlighted by the pandemic were frequently featured in mainstream news as we all sought to keep ourselves healthy and safe.

As we approach the two-year anniversary of the COVID-19 pandemic, we're also asking, "To what extent is the pandemic continuing to shape consumer and business payments habits and behaviors? As daily life slowly returns to normal, will consumers and businesses revert to their prepandemic ways?"

In the Risk Forum's December 16 year-end Talk About Payments webinar, four payments experts will explore these questions and discuss emerging or increased risks since 2020. Some topics for discussion include:

  • Data security, ransomware, and fraud
  • Real-time payments and underserved consumers
  • E-commerce and shopping trends
  • Crypto and the persistence of cash

As always, we're allotting time for participant questions, and we welcome the insights you have gained navigating the last two years.

Please join us for our 2021 Year in Payments Review webinar on December 16 from 1 to 2 p.m. (ET). The webinar is free and open to the public. However, you must registerOff-site link, after which we'll send you login information. If you cannot attend the live event, a recording of the webinar will be posted before the end of the year.

If you'd like to view previous webinars, go to our Talk About Payments webinars page.

We hope to see you on December 16!