Cash, P2P Apps, Fast Food: Is There a Generation Gap in Payments?
In the middle of December, I'm willing to bet that Mariah Carey is on your mind. The grocery store, the gym, your spouse's holiday party, streaming: this Gen Xer is everywhere.
Maybe you prefer baby boomer Bruce Springsteen's "Santa Claus Is Coming to Town" (1981). Or you've got an earworm courtesy of millennial Ariana Grande's "Santa Tell Me" (2014). Perhaps your kids have on repeat a new cover of a Joni Mitchell classic, Gen Zer Olivia Rodrigo's singing "River." From Nat King Cole (chestnuts roasting...) on through the decades, every generation has its holiday anthem.
Turns out holiday music is just like payments: different times, different generations, different preferences. Whatever our age or generation, we all enjoy—or abhor—these classic songs. Whatever our age or generation, most of us use the classic payment methods.
First, all ages use cash and cards.
- Eighty percent of people in Gen Z—for example, Olivia Rodrigo—used cash in the 30 days ending in October 2022. That compared to 86 percent of Gen Xers like Mariah Carey.
- Over the same period, 80 percent of both Gen Z consumers and Gen X consumers used a debit card.
Gen Zers are the digital natives, aged 10 or younger when the iPhone was introduced. These data are limited to adult members of Gen Z, ages 18 to 26 and born between 1997 and 2004. Gen Xers, sometimes called the MTV generation, were born between 1965 and 1980. Today, they are in their prime earning years, aged between 43 and 58. Many are parents of Gen Zers.
Second, some differences between the generations likely have to do with age in 2023 and not so much with birth year:
- Gen Z consumers made 20 percent of their payments for fast food in October 2022, underscoring their youth, compared to 13 percent of payments by Gen Xers.
Third, other gaps in behavior probably have to do with generational differences, reflecting the long-term move away from paper payment methods:
- Thirty-seven percent of Gen Z consumers have a paper check on hand, compared to 78 percent of Gen X.
Fourth, looking at newer ways to pay, younger consumers lead:
- Gen Z is more likely to be using person-to-person, or P2P, payment apps. Two-thirds of Gen Z make mobile P2P payments, compared to less than half of Gen X consumers.
As we gather with family and friends at this time of year, you might see disparities of behavior and opinions among people of different ages. Here are two topics that can bring everyone to the table: holiday music and payments. For more data like that in this blog post, check out the interactive charts and reports of the Survey and Diary of Consumer Payments Choice.
By Claire Greene, payments risk expert in the Retail Payments Risk Forum at the Atlanta Fed
