Annual Wallet Payments Total More Than a Quarter Billion, According to Updated Fed Study

Transactions using mobile wallets totaled at least 250.6 million and amounted to at least $9.5 billion in value in 2012, according to a payments report issued Thursday by the Federal Reserve. These results, part of a comprehensive update to a study released in December, represent the central bank’s first effort to measure activity in the fledgling U.S. mobile-wallet sector.

Mobile wallets are being used for decidedly small-value purchases. More than two-thirds of the wallet payments were for transactions under $10, according to the data, with 42% of them falling under $5.

A closely watched form of electronic payments, mobile-wallet transactions give promise of continued growth, according to the Fed, despite recent missteps by wallet providers. “As this is the first time data on mobile wallets was collected, evidence that the category is growing is based on industry projections,” the report notes.

Recent wallet news has been mixed at best. Rumors circulated on Thursday that Apple Inc. is preparing to enter the wallet market, possibly with the expected fall introduction of its iPhone 6 smart phone. But Visa Inc. last week replaced its V.me product with a new service called Visa Checkout, while in May Square Inc. discontinued its Square Wallet and substituted a more narrowly defined app called Square Order. Search giant Google Inc. has struggled for years to establish Google Wallet with consumers and merchants.

Still, activity on mobile wallets exceeded that for electronic person-to-person and remittance transfers, which totaled 205.3 million transactions, according to the report, entitled “The 2013 Federal Reserve Payments Study.” The study expands on and updates a summary of results released in December as part of a triennial series of statistical reports on the U.S. payments market. The last such Fed study appeared in 2010 and reported numbers for 2009.

Results added since December’s release include these:

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• Among active general-purpose cards, credit cards (334 million) outnumber debit cards (283 million) and prepaid cards (159 million), but consumers are more active users of debit cards (23 monthly payments) than of credit (11) or prepaid cards (10).

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• Online bill payments came to 3.1 billion, with biller-direct transactions accounting for only 261 million of this total.

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• Evidence that electronic payments for small-value transactions are eroding check writing includes the fact that 45% of the drop in checks stems from a decline in checks for $50 or less.

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• The Fed’s study of checks shows further opportunity for growth in person-to-person payments, with 10% of all checks, and 5% of total check value, falling into the consumer-to-consumer category.

The Fed report, the fifth produced so far, is based on two surveys covering financial institutions, networks, processors, and issuers, and a third survey that looks at more than 41,000 check samples from 11 banks.