Connolly and Stavins (2015) showed that payment behavior is strongly correlated with consumers’ demographic and income attributes over the 2009–2013 period. In this paper, we apply a random effects panel data model with sample selection based on Wooldridge (1995) to estimate the effect of each attribute on payment-instrument adoption and use. We find that age, education, income, and race are significant in explaining payment behavior even after controlling for all the other attributes of consumers and for payment-instrument characteristics. Most notably, the lowest-income, lowest-education, and minority consumers adopt a very limited set of payment instruments compared with their counterparts even when education and age are controlled for. These consumers also have a significantly different pattern of payment use conditional on adoption; they rely significantly more on cash and less on credit cards for their transactions. The data do not allow us to isolate supply-side and demand-side factors to explain the causes of these discrepancies. Women use significantly less cash than men, but use more debit cards, checks, and online banking bill pay, even when we control for the degree of bill-paying responsibility they have for their households. Single people use more cash, while married people use more checks. Although characteristics of payment instruments, such as cost, convenience, and security, significantly affect payment behavior, consumers’ socio-demographic attributes explain most of the variation. Separating the effects of consumers’ age from the effects of birth cohorts indicates that in most cases age and birth-cohort trends move together.