The widespread adoption of electronic payment systems has been spurred by the pandemic’s lockdowns, internet purchasing, and the resulting hysteria over potential infection. Therefore, Generation Z has embraced all digital uses of credit, including buy now, pay later options, electronic wallet services, contactless payments, peer-to-peer (P2P) payment apps, and more (BNPL).
More than one-third of the world’s population, or more than 2.5 billion people, are members of Generation Z, often known as Gen Zs or zoomers. Those who entered the world between the late 1990s and the early 2010s are the first generation to have grown up alongside the internet and social media.
Increasingly important to companies and service providers, Zoomers are only now entering the workforce. According to Bank of America’s study, the wealth of the generation born after 1995 will increase by a factor of four between now and 2030, reaching $33 trillion. By 2031, their wealth will have surpassed that of millennials.
Those in Generation Z spend a lot of time on social media, which has a significant impact on their tastes, interests, and consumption habits. The data demonstrates that this generation is the first to declare they feel more like themselves in the digital world than in the real world.
Supporting the payment habits of the millennial and Gen Z generations
The loyalty of millennial and Gen Z customers will be even more crucial to a company’s long-term success than it was to accommodate boomers and Gen Xers. Currently, the purchasing power of these two generations in the United States is estimated at $350 billion. Also, by 2030, as members of Generation Z begin to enter the workforce, their combined income is forecast to increase fivefold to $33 trillion, making up more than a quarter of global revenue.
But to win the allegiance of today’s millennial buyers, companies will have to adapt to the many payment methods preferred by this demographic.
The rise of contactless payment methods, including digital wallets
One way that younger generations like to pay is through contactless payments, in which customers pay by touching a contactless card at a point of sale or holding a smartphone or wearable device near the payment terminal.
To put it another way, more than half of millennials worldwide are less likely to shop at establishments that don’t accept contactless payments.
Among the young, digital wallets are a rapidly expanding contactless payment option.
In 2021, 65% of millennials aged 18-34 used a digital wallet, up from 59% in 2020. Even more impressive, by 2022, 57% of millennials will have switched to using digital wallets instead of paper ones.
Moreover, users of all ages increasingly use more than one digital wallet at a time. Apple Pay may be used to keep a flight reservation and pay at a brick-and-mortar store, while PayPal can be used for online or mobile purchases.
Willing to consider the benefits of cryptocurrency
The capabilities of digital wallets are growing to accommodate the growing interest among younger generations in decentralized digital currencies such as Bitcoin. More than 67% of millennials said they would be more likely to use bitcoin in 2021 than 2020, indicating that this demographic is among those most interested in crypto.
Embracing buys now, pay later.
Buy now, pay later (BNPL) is a popular alternative payment method among millennials and Generation Z customers since it gives them the flexibility to spread out their payments. During their purchasing experience, at checkout, or after the fact through credit card installment payments, customers have three opportunities to opt-in to BNPL.