Zillennials Ditch Cash for Digital Wallets When Dining Out

A recent PYMNTS Intelligence report, titled “In-Store and Online, Digital Wallets and Debit Are Zillennials’ Signature Payments” provides a compelling look into the payment preferences of a pivotal microgeneration: Zillennials, those born between 1991 and 1999. The study, based on a survey of over 2,500 U.S. consumers, analyzes their recent transaction behaviors across key sectors like grocery, retail, restaurants and travel, revealing a distinct set of expectations that merchants and financial institutions must heed. This digitally native cohort, having come of age in an era of rapid technological advancement, demands instant, frictionless and secure payment experiences, setting them apart from both their older and younger counterparts.

The findings paint a clear picture of a consumer segment that has wholeheartedly embraced digital convenience. Zillennials are not reaching for cash or even traditional credit cards with the same frequency as other generations. Instead, they are overwhelmingly drawn to the ease and speed of digital wallets, demonstrating a preference that is more than double that of the general population in categories like grocery shopping. This embrace of mobile payments underscores their desire to “tap and go,” reflecting a fundamental shift towards prioritizing seamless transactions both in physical stores and online. The report also delves into the reasons behind these preferences, highlighting convenience and ease of use as primary drivers for adopting digital payment methods.

Here are three key data points from the PYMNTS Intelligence report:

Digital Wallet Dominance: Nineteen percent of zillennials used a digital wallet for their last grocery purchase, more than twice the 9% of the overall consumer sample. This highlights a significant preference for mobile payments in everyday transactions.

Cashless Inclination: Only 11% of zillennials paid with cash at restaurants, a stark contrast to the 17% of consumers across all generations. This signals a strong move away from physical currency in favor of more convenient digital options.

Credit Card Caution: Just 24% of zillennials used credit cards for their last grocery purchases, compared to 32% of the broader population. This indicates a more risk-averse approach to credit, likely driven by a desire to avoid debt and overspending.

While zillennials lead the charge in digital wallet adoption and eschewing cash, their relationship with credit cards is marked by caution, with a notable preference for the immediacy and perceived safety of debit cards. For travel purchases, a significant 29% of zillennials opted for digital wallets, compared to just 18% of the general population, further solidifying their inclination towards digital solutions even for higher-value transactions. As this generation’s spending power continues its upward trajectory, understanding and catering to these distinct payment preferences will be crucial for banks, payment processors and merchants aiming to capture a significant share of the future market.