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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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February 1, 2021

How Have Our Own Payment Habits Changed?

During our December webinar, Nancy Donahue, Jessica Washington, and I spent a good portion of the time discussing how the COVID-19 environment has changed how consumers shop and pay. In September, I reached out to my fellow Risk Forum colleagues and asked them if they had experienced or noticed any changes in their own shopping and payment habits during this year of the panedmic. While this was far from a scientific survey or sample, I found my colleagues' responses interesting and want to share with you how their payment and shopping practices evolved during the past year.

S: Shopping every weekend was a pastime for me and my best friend and has been for years. Since COVID, we have not set foot into a mall, which consequently cut my spending to $0. I have purchased a few necessary items online such as gifts or medications but have focused solely on paying off debt and saving during this time. Haircuts and styling have also been excluded—those usually occurred every 6 weeks and were my only cash transactions.

C: Grocery shopping has switched to completely online. I used to go to the pet store to buy dog food and treats but once the pandemic started, I switched to a subscription service, where they automatically deliver the food to the house every two months. I used to never buy clothes or shoes online because I wanted to try them on first. I've made some clothing purchases online over the last few months and so far, they've all worked out great. I may never step foot in a shopping mall again even after the pandemic ends! I have been tipping much more at salons and restaurants (with my card because I never have cash on me).

N: I have quit using cash completely and was previously a heavy cash user for daily purchases. I haven't had any folding money for six months. This change in behavior was not the result of COVID concerns per se, but more a lack of need for pocket change when my movements are largely confined between the bedroom, home office, and kitchen. Online shopping has increased exponentially to include groceries and restaurant takeout and all other home goods.

J: A dramatic reduction in gas expenses and card use owing to it. We previously went out to eat only occasionally, but now look for excuses or opportunities to do so. These opportunities aren't numerous as many of our favorite restaurants have limited to no capacity for dine in. We tip heavily when we do eat out, always with folding money.

M: I am shopping less for all categories except food. Grocery and carryout spending have increased. My tipping for restaurant carryout has increased. I try to keep a stash of $5 and $10 bills for the tipping. Prior to COVID, tips were usually included on the card charge.

D: Less frequent in-person grocery store visits and increased online ordering. Also, generous tips to food service personnel at our favorite restaurants where we are doing takeaways.

C: I stopped taking mass transit, so I have been tapping to pay less often. Instead of ordering in person and paying via mobile app (QR scan) at my favorite coffee shop, I have been preordering and tipping in the app. My grocery shopping habits are unchanged as I had been buying groceries online for the past five years.

D: I have been using contactless payments with the digital wallet on my phone substantially more often and am using it wherever it's offered. I have also started to use online shopping and delivery for groceries, although I still find myself making multiple trips to the grocery store each week.

It's pretty obvious that the Risk Forum members are behaving like many of the rest of U.S. consumers, with a major shift from in-person to remote shopping Adobe PDF file format. One area where this is especially true is in grocery shopping. Just as many of us have shifted to (or maintained, for the early adopter among us) buying groceries online, this has been a significant shift for many American households. One surveyOff-site link found that as of June, over one-third of U.S. households had used online ordering to buy some of their groceries. I also love the human touch that my colleagues have shown during this time through actively increasing their tipping to the service individuals who are serving them.