The case for carrying cash
Cash feels anachronistic. But as a backup system, it’s unmatched.
Cash settles without internet, without apps, without bank
authentication, without a charged phone. That property is why it
keeps showing up in the data even as the transaction count itself
keeps shrinking: the average consumer made six cash payments a
month in 2025, down 57.1% from 14 in 2016. Shaun O’Brien, Federal Reserve
Financial Services’ lead data and policy analyst and a co-author of
the Diary, put the reason plainly to Digital Transactions: “cash simply works
when nothing else does — no internet required, no power
needed.” People keep it on hand, he said, as “a safety
net for situations where cards aren’t accepted.”
Read the 2026 Diary carefully and you find two numbers moving in
opposite directions. Cash is about 1 in 7 payments
— a minority instrument, third behind credit and debit for the
sixth year. But more than 80% of participants used cash at least once
in the prior 30 days, ahead of the share who used credit cards (71%) or
debit cards (67%), and about 90% say they plan to keep using it.
A small share of transactions, near-universal retention. (Transactions,
not dollars — the Diary counts payments, and cash skews to small
ones, so its share of money spent is smaller still.) That is not the
profile of a payment method being abandoned. Note it isn’t the profile
of an untouched emergency reserve either — people are clearly
still using cash, just for a small slice of what they buy. It behaves
less like a rainy-day fund and more like a tool most people keep
within reach and reach for rarely.
1 in 7payments made with cash
$69average carried on the person
5 of 6cash payments were under $25
9 vs 6monthly cash payments, rural vs urban
The backup has a ceiling
Here’s where the insurance analogy stops being comforting. The Fed
measured the size of the policy: 76% of consumers carried cash in 2025,
and the average amount on the person was $69 —
which the Diary reports as consistent with 2024. A separate 45% stored cash somewhere else,
averaging $364, but that money is in a drawer at home. It is not at the
table when Venmo goes down.
Five out of six cash payments in 2025 were for transactions under $25.
That’s a fact about what cash gets used for — coffee,
parking, a tip, a taco truck — not a direct measure of what any
wallet could stretch to. But the two together sketch the same shape:
cash in America is provisioned and spent at small-transaction scale,
and a group dinner is not that.
Across splitty’s own US-leaning scanned restaurant receipts, nearly
half (48%) of group bills run $150 or more, and about two-thirds clear
$100. Those are the checks that actually need fronting when a rail goes
down — and a single person carrying the national average cannot
front them.
Read the number carefully: $69 is a population
average, and the 76% counts anyone holding cash on at least one of
their three diary days — not “had cash at dinner.” So this
doesn’t tell you what your table can muster tonight. What it rules out
is the comfortable assumption underneath “someone will have cash”:
nothing in the Fed’s data supports expecting a few hundred dollars to
materialise around a table on demand.
Geography shifts the odds, though less directly than you’d hope. Rural
residents made an average of nine cash payments a month against six for
urban and suburban residents. That’s how often cash gets
used, not how many people have it on them — the Diary
doesn’t report carrying rates by geography. Still, a table where cash
changes hands more often is a table where the fallback is more likely
to be live.
Don’t plan on topping up mid-meal: a Venmo outage
doesn’t take ATMs down with it — different operators, different
rails — but stepping out to find a machine, and paying whatever
it charges, is its own tax on the evening. In a broader infrastructure
or power event, both go at once. Cash works as a backup mainly when
it’s already in your pocket.
Source: 2026 Findings from the Diary of Consumer Payment Choice
(full report PDF), Federal Reserve Financial Services, May 11, 2026.
Survey fielded October 2025. The 30-day usage shares, the five-of-six
figure and the rural/urban counts are from the full report.
Cash-decline figure and O’Brien quote: Fed Payments Diary: Cash Use Dips, But Remains Resilient,
Digital Transactions, May 12, 2026.
