Shopping options. So many ways to pay. And with the surge in digital wallets it’s hard to imagine anyone still carrying physical cards. It’s the kind of incredulity you express when someone says, “of course I still carry cash.”
Yet for each generation, there are preferred payment methods. Consumer trends vary widely based on who your merchants may be selling to.
For many, the familiarity, comfort, and security of carrying a debit or credit card — the standard card-present transaction — is still the favored method. As the title may have spoiled: Some generations’ payment preferences still live in a classic card format.
We may think we’re done with the plastic, but the plastic isn’t done with us.
The importance of understanding payment preferences.
You and your business-owner customers know that giving the people what they want is the golden rule of consumerism. Understanding preferred payment methods — and being able to accept a variety of them — is an essential part of running a successful enterprise.
Boom goes the dynamite: Factors influencing Boomer preferred payment choices.
It’s an oversimplification to say Baby Boomers (born 1946-1964) are sentimental due to their age. Yet there is ample evidence that this is a generation stuck on their stuff, on staying in tune with the touchstones of their youth.
Where Millennials and Gen X may enjoy pins about Garbage Pail Kids, N64s, or Swatches, Boomers are into re-acquiring tangible keepsakes from their past. Much has been written about this generation’s fascination with nostalgia and collectibles.
Certain toys, wearables, watches, a gold card — these were symbols of status, coolness, and success.
That line of thinking has persisted in their advancing years — and the payment methods they prefer. Research has shown that while Boomers do use newer payment methods, they prefer to pay the way they grew up. With 35% of this generation in retirement, they’re still attached to the traditional ways they have shopped and paid over the years. In fact, 37% of Boomers prefer to use paper money when purchasing in person. “Of course I still carry cash.”
As they age, Boomers are also increasingly preoccupied with a sense of security. Fraudsters continue to innovate in inventive and diabolical ways — and older people are statistically more likely to be their marks.
Having a proven payment method they know and trust — the act of physically handing a card to a merchant — gives Boomers peace of mind.
X why Z: Payment methods for different generations.
Then there’s the next generations: X, Millennial, Z, Alpha. They buy stuff, too — or will soon enough — and they each have their own preferences for payment.
Billy Idol’s favorite group, Gen X (born 1965-1979), own the lion’s share of smartphones in the U.S. While they recall an analog existence, they have made the leap to the digital domain.
They may still pull out the plastic on occasion, but a majority — 62%— are all in on contactless methods. According to Fool.com, this generation is also far more likely to have credit baggage than Millennials and Baby Boomers, carrying an average of nearly $8,000 in card debt.
Having come of age in digital times, it’s not surprising that Millennials (born 1980-1994) are more likely than their predecessors to use technology and mobile devices to pay.
About 75% of the Millennial kind also have a PayPal account, and they’re more at ease having high payments diversification (HPD). They like to split their bills and pay with P2P services like Cash App, Venmo, or Zelle.
Then there’s the final alphabetic generation, Gen Z (born 1995-2012). This group is all about the tech when they spend. A majority, 60%, make payments with a mobile wallet.
They’re also into digital subscriptions for music, TV, and gaming — and not so into taking on debt. However, this generation has fully embraced the burgeoning buy now, pay later (BNPL) trend.
Variety is spicy for life — and business: Offering a range of payment options.
You’ve probably already guessed where all this generational data is going. Knowing the demographics — consumers’ payment preferences — for your merchants’ businesses is a huge asset in structuring payment processing. Being nimble, ready to take whichever payment method is preferred — and preferred — is going to make for a better business experience for everyone.
Your friends at NAB are here to help. We can help you create customized solutions that work for every business owner with whom you do business.
Does a merchant need a bespoke API for their online sales? We can help you build it. Need a reader that works with Billy Idol’s black card? We have many options. We have processing that works with plastic strips, chips, and all kinds of touch-free tech.
We can help your business owners serve every generation’s needs. Just be ready for that brain-pay AI when Gen Alpha turns 18.
