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There’s no doubt that Gen Z is moving strongly ahead with their spending power and, as this generation comes into their own, brands need to deeply understand trends affecting this diverse, progressive group. In our ongoing Logica® Future of Money Study, we expand our sample with an augment of older Gen Zers (age 16-24) so we can take a closer look.
One of the interesting standouts from our study is that Gen Z is still using cash to pay—37% of our older Gen Zers in the study prefer to pay with cash (even after cash payments declined during COVID-19). In terms of digital payments, there is room for growth in usage among this population. Gen Z is using their phone for online purchases and about a third plan on using payments apps to pay for online purchases in 5 years.
And while digital peer-to-peer (P2P) payments have grown significantly during the pandemic among Millennials and Gen X, Gen Z is slower to adopt—with P2P growing only 5 percentage points over the past year, compared with growth of 23 percentage points among Millennials and growth of 20 percentage points growth among Gen X. We see the same with Buy Now Pay Later (BNPL) installment plans, with BNPL growing 7 percentage points with Gen Z compared to growth of 15 percentage points in usage among Millennials and Gen X.
For financial brands, Gen Z offers an area of significant growth and innovation—it will be key in the coming years to gain insights into their motivations and behaviors to encourage adoption of various payment options available in today’s world.
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