Payment behavior “changed sharply in 2020 with the COVID-19 pandemic,” the Federal Reserve said today in a new research brief. In-person card payments exhibited an “unprecedented decline” in 2020, with the number of these payments falling by 11.7 billion—the first one-year decline of in-person card payments ever seen in the Fed’s data. Meanwhile, remote card payments increased by 8.7 billion, the largest on-year increase ever observed.
The value of remote payments also exceeded the value of in-person payments for the first time in 2020, the Fed said, reaching $3.85 trillion, compared to $3.2 trillion for in-person payments. E-commerce was a key driver in the increase of remote card payments; in 2020, e-commerce transactions comprised 67.8% of remote card payments by number and 59.2% by value, compared with 64% and 54.8%, respectively in 2019.
The study also found that consumers continued to adopt new payments technologies during the pandemic, including contactless payments, which increased as a share of all in-person payments to 4.63%, up from 1.7% in 2019 and 0.77% in 2018. The adoption of digital wallet also picked up significantly in 2020, as did P2P payments, which saw a considerable spike in the first quarter.
