How are Millennials and Gen Z shaping the future of payments?

According to researchers millennials and Gen Z will dominate the workforce, making up 72% by 2029. Their collective spending power and influence will significantly impact the future of business and commerce.

Who are Millennials?

Millennials are the generation typically born between the early 1980s and the mid-1990s. They are known for growing up in the digital age, experiencing rapid technological advancements, and often characterized by tech-savviness, diversity, and a strong desire for work-life balance.

Who are Gen Zs?

Gen Z, also known as the post-millennial generation, refers to individuals born between the mid-1990s and the early 2010s. They are the generation that came after millennials and grew up in an even more technologically connected world, often called digital natives. Gen Z is characterized by traits such as being tech-savvy, socially conscious, diverse, and entrepreneurial.

Millennials and Gen Z are very comfortable with technology since they've grown up with smartphones, social media, and fast internet. They're used to doing everything on their phones, like shopping, ordering food, booking vacations, and even investing. They expect everything to be quick and easy, with just a tap on their phone screen.

To keep Millennials and Gen Z customers happy, it's important to know how they like to buy things and use the payment methods they prefer. Whether you're selling stuff or providing payment services, making sure the process is smooth and easy for them is key to keeping them around.

What do Millennials and Gen Z prefer as their payment methods?

Younger generations prefer using new payment methods like digital wallets and contactless cards instead of traditional ones. They like the ease and speed of contactless payments, where they can just tap their phone or card to make a purchase.

For businesses to thrive in the long run, it's crucial to win over the loyalty of Millennials and Gen Z customers. However, to do so, businesses need to be flexible and accept the various payment methods that these younger consumers prefer.

Going contactless

These days, more customers prefer to make payments without using physical cards, opting instead for cardless and contactless methods. Digital wallets have become popular among millennials and Gen Z because they offer secure and convenient ways to make purchases remotely, without needing physical cards or traditional payment methods. Younger generations love using contactless payments, where they can simply tap their card or hold their phone close to the payment terminal to make a purchase at the store. More and more young people are embracing digital wallets as a convenient way to make contactless payments. It is becoming normal for people of all ages to use different digital wallets for different purposes.

Use of Cryptocurrency

Younger generations, particularly millennials, are increasingly interested in using digital wallets for alternative currencies like cryptocurrency, such as Bitcoin. Even the banks are getting more interested in investing in cryptocurrency and digital currencies because they're facing challenges in traditional banking. They're targeting millennials and Gen Z because these groups make up a big part of the market and are more open to using cryptocurrency as a reliable and better alternative for payments. Small businesses are also starting to use cryptocurrency, along with regulatory bodies, central banks, and certain platforms that help with crypto transactions.

Buy now Pay Later (BNPL)

Both Gen Z and Millennials like a payment method called "buy now, pay later" (BNPL). Instead of paying for something all at once, they can choose to pay over time. They can decide to use BNPL when they're shopping, at the checkout, or even after they've already purchased by splitting the payment into installments on their credit card.

More and more people, especially millennials and Gen Z, are moving away from using traditional credit cards and preferring buy now, pay later (BNPL) services instead. Unlike credit cards, many BNPL services don't have extra fees like annual fees, balance transfer fees, cash advance fees, foreign transaction fees, or late fees. This makes it simpler for users to handle their payments without having to stress about extra charges.

Going Live and video-enabled

The future of online shopping involves making purchases directly during live video streams. This trend, known as livestream selling or live commerce, lets sellers interact with customers through chat tools, reaction buttons, and instant ordering features. It's like a modern version of TV shopping channels, but it happens on social media platforms. Celebrities and influencers often host these live streams to attract big audiences and sell products instantly.

Millennials and Gen Z prefer social commerce, like shopping on Instagram, TikTok, and Facebook. They like features such as live streaming and videos that make the shopping experience fun. These platforms allow you to pay instantly, making shopping quick and simple and giving you a better overall experience as a customer.

Gen Z prefers genuine, personalized content and enjoys shopping on social media platforms. This shift in their habits highlights the growing importance of social commerce. For businesses and banks to stay relevant in the digital age, it's essential to adapt to these changing trends.

What to expect in the future

Technology is constantly changing how we pay for things, making it easier, safer, and more inclusive. Millennials and Gen Z are leading the way in driving these changes, with new trends in payment methods emerging all the time.

More and more people are using biometric authentication, like fingerprints or face recognition, to confirm payments. Both these generations like it because it's fast and safe, making their shopping experiences smoother and more secure.

Blockchain technology, which supports cryptocurrencies, is becoming widely used in the payment industry. It's seen as one of the most powerful technological tools, revolutionizing how people make payments and buy things.

New initiatives are using advanced technology like artificial intelligence, blockchain, and decentralized identifiers to create digital identities. These digital identities will change how people prove who they are for financial services and completely transform the way authentication works.

Millennials and Gen Z are leading the charge for big changes in how we pay for things. They're using digital technology to make payments easier and more flexible. With innovations like cryptocurrency, buy now, pay later, and social commerce, younger generations are changing the way we buy things. Businesses need to keep up by being flexible and creative to meet the high-tech preferences of these consumers. The sooner we learn about these new payment methods, the faster we'll advance and use them more widely.