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How Gen Z’s preference for digital is changing the payments landscape

EY survey shows Gen Z embraces simple, seamless payment methods.

In brief
  • A recent EY survey revealed that Gen Z leads the generational pack in adopting digital payment methods. 
  • Gen Z prefers quick, easy payment experiences and is less concerned about data and privacy.
  • To gain the trust of Gen Z, payment providers need to simplify their offerings, create seamless transaction experiences, and speak to Gen Z’s values.

As the first cohort of true digital natives, members of Gen Z like moving fast. When they make purchases, they whip out their phones, preferring to pay with digital methods and with the expectation that the process will be immediate. But while Gen Z sprints through the digital landscape, it would be a mistake to think of this generation as risk takers. In mindset, they have more in common with previous generations of millennials and Gen X.

Born between 1997 and 2012, Gen Z has experienced crises that include 9/11, the Great Recession, and the COVID-19 pandemic. These experiences have made them pragmatic, purposeful and cautious, according to the EY article “4 keys to understanding Gen Z.” Now representing 68 million consumers in the US, Gen Z has enormous spending power, and it’s more than doubled since 2019. To capture Gen Z’s business, consumer payment providers need to tailor their offerings to the unique mindset of this digitally savvy, risk-averse cohort.

A demographic and digital shift

In the EY Gen Z Payments Survey, Gen Z showed a significant departure from previous generations in how they paid for goods and services.

  1. Leads in alternative payment methods adoption: Gen Z is racing ahead of baby boomers, Gen X, and millennials and is up to three times more likely to use an alternative payment method, such as contactless payments, payments apps, Buy Now Pay Later, and in-game currencies.
  2. Less concerned with data and privacy: Unlike their older counterparts, Gen Z is less concerned with data and privacy. Only 40% of Gen Z rated data and privacy as extremely important compared with 65% of non-Gen Z respondents.
  3. Prefers debit cards to credit cards: Debit cards are the most popular payment form for Gen Z, with 69% reporting daily or weekly use. Gen Z values saving money, according to the EY article “Is your business ready for Gen Z?” A desire to live within their means and avoid additional fees could explain why credit card use lags, with only 39% of Gen Z reporting frequent use, compared with 51% of older generations. Among those who don’t use credit cards, Gen Z is twice as likely as non-Gen Z respondents to cite a lack of understanding of credit card offerings as the reason.
  4. Heightened expectations around experience: Gen Z doesn’t like to take any extra steps when paying. Among Gen Z respondents, 39% considered entering a PIN to be a pain point when using a debit card compared with just 29% of other generations.
  5. ESG awareness: Values matter to Gen Z. Among Gen Z respondents, 51% cited environmental, social and governance (ESG) factors as important when choosing a payment provider, compared with 36% from previous generations.
  6. Strong sense of loyalty: Gen Zers like to stick with their preferred form of payment. When the preferred method isn’t available, Gen Z respondents were twice as likely to report delaying their purchase rather than using an alternative.

How to attract Gen Z

To connect with Gen Z consumers and gain their loyalty, payment providers should consider these three key takeaways:

  1. Use clear and simple messaging: Gen Z wants payment methods to be easy to understand, including rewards, benefits and terms of use. Credit card companies should present their offerings in plain, simple language.
  2. Streamline the experience: To compete effectively, payment providers should remove any extra steps during the transaction experience.
  3. Think memes, not billboards: When choosing between offerings, Gen Z looks for companies that align with their values. Payment providers should incorporate messaging around their values into creative campaigns that engage Gen Z through digital channels.

Hyper-connected and digitally intuitive, Gen Z is starting to have a profound impact not only in what they buy but how they buy it. Consumer payment providers that emphasize simplicity and speak to Gen Z’s earnest, cautious nature will be the ones to profit from this group’s enormous spending power. 

Ankit Rao, Director, EY-Parthenon, contributed to this article.


Now the largest generational cohort in the US, Gen Z is flexing their spending power and is rewarding payment methods that provide simple, seamless digital experiences.

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