The Federal Reserve Board on April 5 revealed more details about its 2010 payments study and found, not surprisingly, that debit and prepaid card were the largest growth areas for electronic payments between 2006 and 2009.
Debit card payments in 2009 totaled 37.9 billion, up 51.6% from 25 billion three year earlier and representing an annual growth rate 14.8%, according to the Fed (
The value of the 2009 debit purchases totaled $1.4 trillion, up 39.9% from $1 trillion. The average value for a debit card purchase in 2009 was $38 ($37 for signature debit and $39 for PIN debit). By comparison, the average value for a debit card purchase in 2006 was $39 ($40 for signature debit and $37 for PIN debit).
The Fed estimates consumers conducted 30 million contactless signature-debit transactions in 2009 totaling $1 billion. They accounted for 0.15% of total signature-debit payments and 0.08% of the total value of those payments. The average value of a contactless payment was $20.
Prepaid card transactions experienced the largest growth, as payments increased 81.8%, to 6 billion from 3.3 billion. Prepaid sales volume totaled $140 billion in 2009, up 75% from $80 billion.
The Fed included general-purpose prepaid, closed-loop and electronic benefits transfer transactions in the prepaid category.
Closed-loop cards topped all prepaid categories in use in 2009, accounting for 2.7 billion transactions, up 42.1% from 1.9 billion in 2006. Those cards, however, experienced the lowest annual growth rate at 11.8% per year. The value of those transactions rose 33%, to $40 billion from $30 billion.
Consumers conducted 2 billion transactions with EBT cards in 2009, up 81.1% from 1.1 billion in 2006, or an annual growth rate of 21.5%. The value of those transactions rose 66.6%, to $50 billion from $30 billion.
Open-loop cards experienced the largest annual growth rate at 63.4% per year. Consumers conducted 1.3 billion transactions with open-loop cards in 2009, up 333.3% from 300 million in 2006. The value of those transactions rose 300%, to $40 billion from $10 billion.
Overall, all electronic-payment types except credit cards showed increased use from 2006 to 2009. The number of noncash payments overall increased 14.3%, to 108.9 billion from 95.2 billion. The Fed estimates the value of all 2009 noncash payments at $72.3 trillion, down 4.4% from $75.7 trillion.
Credit card payments, which include both network-branded and private-label card, decreased slightly, to 21.6 billion from 21.7 billion. The value of credit card payments declined 9.5%, to $1.9 trillion from $2.1 trillion, or by an annual rate of 3.4%. The average credit card purchase in 2009 was $89, down 9.1% from $98 in 2006.
“The decline in credit card spending likely reflects the economic recession and may not represent permanent changes in payments preferences of consumers and businesses,” The Fed notes in the study report.
Consumers initiated 20 million contactless network-branded card payments in 2009 with an average value of $43.
Check use continued to decline as more consumers paid monthly bills from their checking accounts and used debit cards, the study notes. The number of checks paid decreased 20%, to 24.4 billion from 30.5 billion. The number of checks paid in 2009 had a value of $31.6 trillion, down 24% from $41.6 billion. The average value of each check decreased 5.2% from $1,363 from $1,292.
The number of check written decreased 16.9%, to 27.5 billion from 33.1 billion. Checks written in 2009 had a total value of $32.4 trillion, down 23.4% from $42.3 trillion. The average value of each check decreased 8.7% from $1,277 to $1.165.
The number of checks paid differs from the number of checks written because use of the ACH system converts some consumer checks presented to billers and merchants into electronic payments, according to the study report. ACH transactions increased 30.8%, to 19.1 billion from 14.6 billion.
Cardholders initiated some 6 billion ATM withdrawals last year in 2010, up 3.4% from 5.8 billion. The value of the withdrawals totaled $629 billion, up 6.9% from $588 billion. The average value per withdrawal in 2009 was $108, up 8% from $100.
Consumers in 2009 initiated 4.2 billion ATM withdrawals at commercial banks valued at $478.5 billion. They initiated an additional 1.4 billion withdrawals at credit union ATMs valued at $132.2 billion, and 300 million ATM withdrawals at savings institutions worth $35.9 billion.
The Fed released an early summary of the report in December (
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