FR3054_20191115_omb_B

Supporting Statement Part B for the
Payment Systems Surveys
(FR 3054; OMB No. 7100-0332)
Summary
For all information collections that involve surveys or require a statistical methodology,
the Board of Governors of the Federal Reserve System (Board) is required to provide a complete
justification and explanation of the use of such a methodology. For collections that employ
surveys without such a methodology, the Board should be prepared to justify its decision not to
use statistical methods in any case where such methods might reduce burden or improve
accuracy of results.
Background
The Board oversees the Federal Reserve Banks’ provision of financial services to
depository institutions; develops policies and regulations to foster the efficiency and integrity of
the U.S. payment system; works with other central banks and international organizations to
improve the payment system more broadly; conducts research on payments issues; and works
closely with the Bureau of Engraving and Printing (BEP) and U.S. Secret Service (USSS) on
currency design, quality issues, and to educate the global public on the security features of
Federal Reserve notes. Board officials serve on the Advanced Counterfeiting Deterrence group
(ACD), an interagency working group that is responsible for maintaining the security of U.S.
currency. As a member of the ACD, the Board supports the BEP in the design of next family of
U.S. currency by providing critical data on the use and circulation of Federal Reserve notes.
The Board periodically gathers data from various groups (including financial and
nonfinancial institutions, banknote equipment manufacturers, and global wholesale banknote
dealers) regarding demand for currency and coin, the quality and functionality of banknotes, the
public’s perceptions of security features, and how individuals use currency. These data are
considered particularly essential when (1) critical economic changes occur, (2) the BEP
encounters production problems and banknotes do not meet quality standards, (3) new banknote
designs are under consideration, (4) issues of immediate concern arise from Federal Reserve
System committee initiatives working on banknote security and issuance, or (5) Congress enacts
new or revised legislation that impacts currency production, currency issuance or coin
distribution.
In support of the Board’s currency recirculation policy, the Federal Reserve Bank of San
Francisco’s Cash Product Office (CPO) and the Federal Reserve Bank of Richmond’s Currency
Technology Office (CTO) monitor the quality of currency by analyzing data on banknotes
processed at Federal Reserve Banks each month. Once a year, the CPO randomly selects
depository institutions that have deposit accounts with Federal Reserve Banks to voluntarily
submit, as part of their normal deposits, currency that is unsorted from their commercial
customers, in order to assess the validity of the monthly monitoring and the quality of currency
in circulation.

The Board works closely with the BEP and USSS on banknote design to ensure that
banknotes consistently meet the needs of the public, are usable in all types of transactions
(including those involving automated equipment), and can be easily authenticated. To maintain a
sound money supply, it is important that currency functions properly in all types of transactions
and can be easily authenticated and denominated by all users. To assess how banknote
equipment manufacturers determine the authenticity and denomination of a banknote, the Federal
Reserve System conducts meetings and interviews with these stakeholders regarding currency
security features and key banknote design elements.
Universe and Respondent Selection
Ad Hoc Payments Systems Survey (FR 3054a)
The sample selection for the FR 3054a will vary with each iteration of the survey. The
proposed approach for the FR 3054a would be to conduct the survey up to five times per year,
reaching out to up to 4,000 respondents. Target respondents for the 3054a are primarily
individuals, but surveys may be deployed to financial institutions, retailers, or law enforcement
entities. Respondents will be selected based either on their business relationship with the Federal
Reserve System, or as identified by a market research firm. The Federal Reserve System cannot
predict what specific information would be needed because such needs are generally nonrecurring and time sensitive. Private firms may be utilized for the FR 3054a, in which case the
firm would be responsible for developing and testing proposed survey procedures, following a
sampling protocol which would be established by the Federal Reserve System before the survey
is administered, conducting the survey as specified by the Federal Reserve System, preparing
data files containing the responses, computing analysis weights, and documenting all survey
procedures.
Currency Quality Sampling Survey (FR 3054b)
The FR 3054b is conducted on an annual basis. The Federal Reserve Board analyzes the
quality of currency processed at all Federal Reserve Banks and it randomly selects 300
respondents whose deposits reflect the average quality of processed currency.
Currency Quality Survey (FR 3054c)
The FR 3054c would be conducted twice per year, once with depository institutions and
once with BEMs. Depository institutions may be selected from the Federal Reserve’s cash
customer advisory council and BEMs may be selected from the Federal Reserve’s central bank
cash machine group.
Currency Functionality and Perception Survey (FR 3054d)
The FR 3054d would be conducted four times a year with BEMs to prepare for and
participate in discussions with the Board, the BEP, the CTO, or the USSS. BEMs may be
selected from the Federal Reserve’s central bank cash machine group.

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Currency Education Usability Survey (FR 3054e)
The FR 3054e would be conducted approximately five times per year with primarily
individuals, but the Currency Education Usability Survey may request responses from depository
institutions or retailers to support the development of new digital education materials for these
stakeholder groups.
Procedures for Collecting Information
Surveys could be administered online or in person, through in-depth interviews, and
through observations of focus groups.
Methods to Maximize Response
Ad Hoc Payments Systems Survey (FR 3054a)
Methods to maximize response rates will vary with each survey, but generally it is
expected that each survey will receive about a 60 percent response rate, which is adequate to the
purposes of the collection.
Currency Quality Sampling Survey (FR 3054b)
The Board anticipates a 60 percent response rate, which is adequate to the purposes of the
collection.
Currency Quality Survey (FR 3054c)
The Board selects depository institutions from the Federal Reserve System’s cash
advisory council and banknote manufacturers from the Federal Reserve’s central bank cash
machine group. Because their businesses are directly affected by currency designs and currency
quality, the Federal Reserve anticipates a 100 percent response rate.
Currency Functionality and Perception Survey (FR 3054d)
Similarly to the FR 3054c, participants in the FR 3054d are banknote equipment
manufacturers selected from the Federal Reserve’s central bank cash machine group. Because
their businesses are directly affected by currency designs, the Board anticipates a 100 percent
response rate.
Currency Education Usability Survey (FR 3054e)
The Board anticipates a 60 percent response rate, which is adequate to the purposes of the
collection.

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Testing of Procedures
There has been no pretesting of procedures for these surveys.

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