Age is an important factor when it comes to preferences among bank customers, particularly during various life stages and events. Generations of consumers tend to view their finances, make purchases and approach payments differently.
In this third installment of our 2022 Primax Payments Pulse blog series, we review the differences in payment preferences across multiple generations.
Baby Boomers – Ages 58+
Baby Boomers generally have more stability regarding their life events and personal finances – their payment preferences reflect that. Half of bank customers in this generation say that credit cards are their most preferred payment method. They’re also using more established credit card accounts, with only 8% of bank customers in this generation saying they applied for a new credit card through their financial institution in the past 12 months.
Baby Boomers are also the generation most worried about the economy. Most (90%) say they are concerned about the overall economic outlook, while about two-thirds (66%) are concerned about the economy’s impact on their personal financial situation.
Generation X – Ages 41 to 57
With the continued shift to digital banking channels, fraud is a top concern for many members of Gen X. A majority of these accountholders (76%) say they are concerned about identity theft, and nearly half (45%) say they are more concerned about fraud. Although in the past year, only 4% have been a victim of identity theft, and 3% have experienced card fraud.
Despite their concerns about fraud, an impressive 92% of bank customers in this generation say they trust their financial institution, more than any of the younger generations. Half say they interact with their bank online, compared to 48% who report engaging face-to-face in a branch and 46% who report calling on the phone.
Older Millennials – Ages 33 to 40
The older group of Millennials prefers to use debit more than any other generation, with more than half (51%) saying it is their preferred payment method. Despite their heavy use of debit, Millennials applied for credit cards more than any other generation last year – nearly three in ten (28%) applied for a new credit card in the past 12 months, with 67% receiving a real-time approval or denial.
Tech-savvy Millennials were the most active generation in the metaverse. A notable 21% say they engaged in a metaverse or metaverse-like experience in the past 12 months. Of those who engaged in a metaverse experience, 70% say they monetized or sold real or virtual products or services.
Younger Millennials – Ages 25 to 32
Younger Millennials are more likely to participate in modern payment trends like cryptocurrency or NFTs than other generations. They reported interest in learning more about cryptocurrency (53%) and NFTs (44%) from their financial institutions and look to their banks for more information about financing options. Over half (54%) say that if their bank offered a Buy Now, Pay Later (BNPL) program, they would be likely or extremely likely to use it.
Younger Millennials are also the most active users of mobile wallet technology. One in two (51%) say they use their mobile wallet at least a few times per month, and 21% use it a few times per week or more. They cite ease of use (70%) and convenience (62%) as the main reasons for using mobile wallet technology.
Generation Z – Ages 18 to 24
The youngest generation of adult consumers has experienced far more significant life events in the last year, like changing jobs (43%) and losing their job (18%), than older generations. Unsurprisingly, this group also expressed more financial worries than any other age group, with 83% saying they are concerned about their personal finances due to the current economic outlook.
Debit is the preferred payment method for nearly half (49%) of Gen Z cardholders. Like other generations, Gen Z customers value choice when it comes to payments – 87% say they are using a greater variety of payment methods than they were a few years ago, and 86% of these cardholders reported using contactless card technology at least a few times per month.
Key Takeaways:
Here are the key takeaways for financial institutions from each generation:
- Baby Boomers – This well-established generation feels relatively confident about their own financial situations, but their life experience tells them to take heed of the overall economic outlook. Financial institutions should inform this generation of economic shifts, particularly those that impact them directly, like interest rates.
- Gen X – Because trust is essential to this generation, financial institutions should work to strengthen relationships with Gen X customers, whether online, on the phone or in person. Because they worry about fraud and identity theft, it’s also important to inform these cardholders how their data and money are being safeguarded, so they know that their bank is looking out for them.
- Older Millennials – Older Millennials still want credit cards, even though they typically pay with debit cards. Because this generation was the first to grow up with the instant gratification of the internet, they are used to doing everything online, including engaging in the metaverse. Banks can engage with these cardholders by offering services like credit card approvals or denials within a metaverse-like environment.
- Younger Millennials – Digital-savvy Younger Millennials want modern, convenient payment options, like BNPL, so banks looking to win the business of these consumers should keep pace with innovative digital trends. This generation also looks to their financial institution for credible information on cryptocurrency and NFTs, so banks should be prepared to provide reliable guidance and resources.
- Gen Z – These young adults are coming of age during a tumultuous time – on the heels of a pandemic and with fears of a recession looming. They need sound financial advice from a trusted banking partner. Banks should build relationships with these consumers by helping them establish financial security. Additionally, this group wants access to convenient payment options like contactless cards, so banks should ensure this technology is readily available.
For more key takeaways on payment preferences through generations, as well as additional information on consumer preferences, download the full 2022 Primax Payments Pulse study. The Primax Payments Pulse provides insights and market trends to help banks make decisions and optimize growth opportunities.
Kimberly Ploof has more than 30 years of leadership in the payments industry. As Managing Vice President, Kim leads teams that foster in-depth, strategic and productive relationships with Primax clients.
Prior to working with Primax, Kim was the Chief Operating Officer of Covera in Albany, NY. At Covera, Kim was instrumental in building the business model and rebranding the organization to be a widely known payment processing solutions provider. Within the payments industry, Kim has served on the Member Access Network Operations Committee, CSCU Advisory Committee, CO-OP Operations Advisory Committee and CUNA Payments Policy Sub-Committee.
