Cashless Payments: Types and How They Work

What counts as a cashless payment
The main types (US definitions)

A cashless payment is any payment made without bills and coins. The main types are credit cards, debit cards, prepaid cards, bank transfers such as ACH and instant payments, checks, and payments made through a mobile app. They differ in where the money comes from: a credit card borrows it, a debit card takes it from a bank account, and a prepaid card spends money loaded onto the card in advance.

Billed publishes this page. Definitions are quoted from the US Consumer Financial Protection Bureau (CFPB) and the US Federal Reserve, and US payment figures from the Federal Reserve's 2026 Findings from the Diary of Consumer Payment Choice, all opened on October 30, 2026. For taking payments on a phone, see the guide to mobile payments; for what happens after a customer pays by card, what is payment processing; and for setting up online payments on invoices, how to accept online payments.

What counts as a cashless payment

The Federal Reserve's Diary of Consumer Payment Choice sorts US consumer payments into these groups: cash, check, credit, debit, ACH, mobile payment app and other. Its note on the figures says that other payments "include prepaid cards, money orders, traveler's checks and transfers." Every group except cash is a cashless payment.

The main types (US definitions)

Credit card. The CFPB says: "Credit cards are ways to borrow money." It adds: "When you use a credit card, you're borrowing money, and you must repay it on the payment due date."
Debit card. The CFPB says: "With a debit card, you are spending money you have in your bank or credit union account."
Prepaid card. The CFPB says: "A prepaid card is not linked to a bank or credit union account. Instead, you put money into the card account, sometimes called loading money onto the card, before you can spend it."
ACH transfer. The Federal Reserve says: "The automated clearinghouse (ACH) system is a nationwide network through which depository institutions send each other batches of electronic credit and debit transfers." Its examples: "The direct deposit of payroll, social security benefits, and tax refunds are typical examples of ACH credit transfers. The direct debiting of mortgages and utility bills are typical examples of ACH debit transfers."
Instant payment. The Federal Reserve describes its FedNow Service as "a new service for instant payments built by the Federal Reserve to help make everyday payments fast and convenient for American households and businesses."
Check. The Diary counts checks as their own group, separate from cash.
Mobile payment app. A payment made through an app on a phone. The Diary counts these as their own group too. For the apps themselves, see digital wallet apps.

Cards can look alike. The CFPB notes that prepaid, debit and credit cards "could show a card network logo, such as Visa, MasterCard, American Express, or Discover," so the logo doesn't tell you which type a card is.

How a cashless payment reaches a business

A business needs a way to accept each type it takes. Card payments go through a processor; see what is payment processing and how to accept credit card payments. ACH and instant payments go from bank to bank. For payments built into invoicing or sales software, see what are integrated payments.

How US consumers pay (Federal Reserve data)

From the Federal Reserve's 2026 Findings from the Diary of Consumer Payment Choice, which covers payments made in October 2025:

"The average U.S. consumer made 47 payments per month in 2025, compared to 48 payments in 2024."
"The number of credit card payments decreased from 17 to 16, while the number of debit card payments increased from 14 to 15."
"Cash accounted for an average of six payments per month (14% of total payments) and remained the third most-used payment instrument."

So in that survey, about 86% of US consumer payments were made without cash (100% − 14% = 86%). These figures describe consumers, not any one business's customers.

Sample: sorting a week's payments by type

The business and figures here are a sample, invented for this example.

A bakery records how each sale was paid over one week:

Cash: 32 sales, $400
Debit card: 41 sales, $900
Credit card: 38 sales, $1,100
Mobile payment app: 8 sales, $200
ACH (one catering invoice): 1 payment, $600

Totals: 32 + 41 + 38 + 8 + 1 = 120 payments; $400 + $900 + $1,100 + $200 + $600 = $3,200.

Cashless: 120 − 32 = 88 payments, worth $3,200 − $400 = $2,800, which is $2,800 ÷ $3,200 = 87.5% of the week's sales.

Sorting by type tells the bakery which deposits to expect: card and app payments arrive from the processor, the ACH payment arrives from the customer's bank, and the $400 in cash goes to the bank by hand.

Where Billed fits

Billed's accept payments page says: "Billed integrates with Stripe to enable online payments on invoices." It also says: "Keep track of all the payments from offline sources like checks, cash etc." Billed's mobile app page says: "Invoices include a card pay button when Stripe or PayPal is connected, so you can get paid from the field."

Frequently Asked Questions

What is a cashless payment?

Any payment made without bills and coins, such as a credit, debit or prepaid card, an ACH or instant bank transfer, a check, or a mobile payment app.

What is the difference between debit, credit and prepaid cards?

A debit card spends money held at your bank or credit union, a prepaid card spends money loaded onto the card in advance, and a credit card borrows money that you must repay by the payment due date.

Is a check a cashless payment?

Yes. A check isn't bills or coins, and the Federal Reserve's Diary of Consumer Payment Choice counts checks as a separate group from cash.

What share of US consumer payments are made in cash?

The Federal Reserve's 2026 Findings from the Diary of Consumer Payment Choice says: "Cash accounted for an average of six payments per month (14% of total payments) and remained the third most-used payment instrument." The figures are for 2025.

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