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Federal Reserve Releases 'Diary of Consumer Payment Choice'


March 31 - Merchants today are faced with a confusing and changing landscape of emerging payments options, often driven by consumer adoption of new devices and systems. In the 4th quarter of 2013, the amount spent in retail consumer sales was estimated at $1.147 trillion. More than 90 percent of those retail sales were made at the physical point of sale and an additional $69 billion was spent in e-commerce (at 6 percent of total retail sales).

With trillions of dollars spent each quarter, the payments choices consumers make today can have a major impact on the merchants and payments system of the future. In 2012, a national study, the Diary of Consumer Payment Choice, was conducted. The research revealed that a demographic shift in consumer payments choices has taken root: the younger generations are increasing their use of mobile payments and their choices are setting the payments course of the future.

The Diary of Consumer Payment Choice was a national online survey that tracked all payments made by participants over a rolling three-day period in October 2012. The Diary method was chosen because household surveys are one of the best ways to find out about individual consumer spending behavior and may also provide a comprehensive snapshot of individual demographics, including age, family size, income and education.5
Over the three-day period, 2,467 individuals, ranging in age from 18 through 94, completed the Diary, making 12,647 transactions and spending a combined total of $453,655. Participants entered all payments online and were also provided a Diary to record payments and purchases and to increase recall for more accurate reporting.

The Diary participants began at different times during the month, which provided variance in payments based on the time of the month. For example, people who began the Diary at the beginning of October may have made larger payments for rent or a mortgage because those payments are typically made in the beginning of the month. Participants recorded the following: amounts spent, the merchant or vendor where payments were made, the payment instrument used, including cash, check, credit, debit, gift card, or other payment type, and the payment device they used (including computer, laptop or desktop, tablet, mobile or landline phone, mail or delivery services) at the time of the actual transaction.

The 2012 Diary of Consumer Payment Choice was designed to provide a point-in-time snapshot of actual consumer payments behavior. In the 4th quarter of 2012, the amount spent in estimated total retail consumer sales was $1.156 trillion. More than 90 percent of those sales were made at the physical point of sale. An additional $72 billion was spent in e-commerce (at 6.2 percent). With trillions of retail dollars at stake each quarter, the implications from an emerging generational preference for payments speed and efficiency may jolt merchants into an awareness of important payments trends will be to their future success. To read the full paper, go to