Gen Z Holds the Cards in New Top-of-Wallet Showdown

Watch more: Banks and Credit Unions Battle for Digital Wallet Dominance as Gen Z Demands Instant Control

Banks and credit unions have long chased “top-of-wallet” bragging rights, but as consumers swap leather billfolds for digital wallets and tuned-in intentions, that coveted spot has never been harder or more consequential to win.

For the four executives who gathered for PYMNTS’ panel discussion on credit card primacy, the stakes are clear. The panel was based on PYMNTS Intelligence’s latest Consumer Credit Economy report, a collaboration with i2c, which showed that 41% of Generation Z cardholders pick a primary card based on mobile self-service features. It also found that nearly half would use a card more often if they could toggle flexible controls. Those shifting preferences are forcing issuers to abandon one-size-fits-all formulas in favor of finely tuned products calibrated by age, income and purpose.

Seth Perlman, global head of product at i2c, said top-of-wallet status now begins before a cardholder spends a single dollar.

“Instant digital issuance shortens the gap between approval and first tap,” he said, adding that mobile wallet provisioning prompts consumers to make the new credential their default payment method on the spot. The capability, still absent at many issuers, not only gratifies customers but also locks in early transaction share.

Credit union leaders echoed the point from the issuer side.

Gretchen Bartholomew, vice president of operations and payment strategy at Columbus-based Kemba Financial Credit Union, called instant access to real-time data “non-negotiable” for winning modern customers — and especially Gen Z.

“They value transparency and control,” she said, describing Kemba’s push to surface balances, offers and card alerts “in the palm of their hand.”

Agata Ruta, chief operations officer at Belize Bank, illustrated the payoff.

After the bank rebuilt its mobile app from a “static balance” screen into a full-service control center — pin changes, card blocks, dispute filing and two-way alerts — authorization rates rose and call center disputes on ATM transactions fell from more than 2,000 a year to near zero.

“Customers see their limits in real time and top up instantly, preventing declines,” she said.

Strategies and Tactics

Perlman said a second must-have is configurable alerts and cardholder controls that let users set spend caps, choose notification triggers and switch cards on and off.

Younger borrowers “want their hands on the wheel at all times,” he said.

Belize Bank’s experience supports the claim. It now pings travelers in high-risk geographies and automatically unblocks cards when customers confirm legitimate activity. It’s an approach Ruta called instrumental in “building trust” abroad.

For Sumeet Grover, executive vice president and chief strategic growth and digital officer at Texas-based University Federal Credit Union (UFCU), the formula also requires a “hybrid pathway” that marries mobile self-service with human guidance. High-stakes moments — credit coaching, disputes, loan decisioning — still demand empathy that an app alone cannot supply.

“Digital needs to scale for efficiency, but it also needs to scale for empathy,” Grover said.

If any cohort will decide tomorrow’s winners, the panelists agreed, it is Gen Z. The PYMNTS-i2c study found that Gen Z and millennials already use 30% and 27% of their credit limits, respectively, a heavier draw than older generations. That usage makes education and control features doubly important.

Kemba tailors its mobile road map with Gen Z front of mind, embedding credit score education and budget simulators alongside transactional data, Bartholomew said. Usage metrics focus less on raw adoption than on behavioral change — lower utilization rates, faster paydowns and growing deposits.

“The key metric is behavior,” she said. “Are they becoming fiscally healthier?”

UFCU takes the lesson to campus. Grover described interactive workshops at the University of Texas at Austin that frame cards not as abstract debt but as tools for milestones like first paychecks, first apartments and first trips.

“When you lead with literacy, loyalty follows,” he said, quoting research that 48% of Gen Z would swipe more often with embedded flexibility.

Perlman said data-driven nudges must coach rather than scold. Instead of telling a customer, “You spent too much on dining,” issuers might alert them when spending rises 20% month over month and offer to set an automatic threshold.

“It’s not to parent your customer; it’s to partner with them,” he said.

Ruta offered a case study on the power of back-office streamlining. By centralizing fraud rules and eliminating ad hoc blocks that once triggered up to 200 daily calls, Belize Bank freed staff and spared customers from friction.

“Sometimes hiring an army to handle exceptions is the wrong answer,” she said. “Better data, used centrally, removes the exceptions.”

Loyalty’s New Math

Rewards remain table stakes, but the panel said they must evolve from blanket cash back to surgical campaigns informed by portfolio analytics. i2c enables issuers to run merchant-funded offers or A/B-tested category bonuses targeted at micro-segments, Perlman said.

“If rewards are built for the mass, they’re ignored. If they’re built for me, they’re remembered,” Grover said, describing UFCU’s experiments with influencer-driven perks that tie benefits to peer endorsement.

Belize Bank couples its American Airlines co-brand with weekly — rather than monthly — mile credits, a change made possible by automating the accrual pipeline.

“Customers no longer wait for their miles, so they book sooner and spend more,” Ruta said.

The bank also uses debit card cash back to nudge customers from cash withdrawals to point-of-sale purchases, segmenting offers by lifestyle imagery printed on the plastic and by industry, not merchant ID, after data showed broader categories resonated better.

Kemba, meanwhile, rotates monthly “spend-and-get” promotions calibrated to seasonality. A 30-day “Eat Local and Earn” push lifted restaurant spend 10% and sustained that bump for six months, while 22% of participating members increased overall card usage.

“It’s a win-win — members earn, local merchants thrive, and our card stays on top,” Bartholomew said.

Sophisticated analytics undergird all these plays.

Kemba formed a data governance committee and built a “Big Five” dashboard tracking loan growth, deposits, ROA, penetration of an advantage member tier and Net Promoter Score.

“Data is only valuable if it tells a story we can act on,” Bartholomew said.

UFCU’s propensity models look beyond demographics to behavioral signals — transaction timing, life stage triggers and search queries inside secure portals — to surface the “right offer at the right time,” Grover said.

Belize Bank applies similar rigor to roadmap planning. Seeing that only 8% of cardholders had scheduled payments, the bank exposed an API-driven autopsy feature in its app, reducing late fee calls and protecting revolving lines.

Perlman said retention, not acquisition, is where data delivers the highest return. Visual dashboards that flag dormant accounts, predict delinquency risk or spotlight high-value shoppers let managers intervene before spending migrates.

“It’s cheaper to save a leaky bucket than refill it,” he said, urging issuers to pair insights with automated triggers for SMS reminders, credit line tweaks or time-boxed bonus multipliers.

Gen Z on Deck

Asked to distill their 12-month game plans for 25-year-olds, panelists converged on three imperatives: mobile-first convenience, hyper-personalization and real-time relevance.

Bartholomew pledged to weave digital issuance deeper into Kemba’s omnichannel messaging; Grover vowed to “let young cardholders co-create” through flexible rewards and spend controls; Ruta championed self-service features “informed by data, data and data”; and Perlman, slipping briefly into issuer shoes, summed it up: “Think mobile, think personal, think relevant.”

Winning the front spot in a consumer’s digital wallet is no longer about the shiniest metal card or the richest sign-on bonus. It is about meeting customers — especially younger ones — where they budget, socialize and buy; giving them granular control without judgment; teaching them enough to thrive; and rewarding them in ways that feel individualized and immediate.

The institutions that can stitch those threads together will not simply occupy top of wallet today, panelists said. They will earn a durable place in consumers’ financial lives for years to come.

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