Gen Z embraces digital wallets but they actually want more

  • A significant portion of younger consumers are increasingly interested in exploring alternative uses of digital wallets, especially for specific money transfer purposes.
  • The higher spending habits among Gen Z digital wallet users underscore their potential value for merchants and businesses aiming to cultivate future core customer bases.

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Gen Z embraces digital wallets but they actually want more

The adoption of digital wallets is expected to grow with new use cases this year. McKinsey predicts that more than two-thirds of Americans expect to have a digital wallet within two years, and many will likely hold multiple wallets. This indicates a shift away from physical debit card usage toward using debit cards through digital wallets.

“Using digital wallets and mobile payment apps were once emerging trends but are now becoming common practice for both online and in-store purchases,” Christine Roberts, EVP, and President of Citizens Pay told Tearsheet recently.

According to Roberts, this validates the need for omnichannel solutions focusing on the customer experience throughout the [shopping] journey, and the continued evolution of contactless payment options beyond credit or debit cards.

Dong Min Kim, Director of Google Wallet, shared some payment insights with Tearsheet, “As digital wallet adoption continues to grow, consumers want their wallets to include additional non-payment essentials we need to navigate our daily lives, including identification, health insurance cards, transit passes, and more.”

Google Wallet has been working with the ecosystem to expand the types of passes people can save in their Google Wallet, for example. In June 2023, the firm announced support for new non-payments pass types including mobile driver’s licenses – which are now live in Arizona, Colorado, Georgia, and Maryland – and a secure pass type to store digital healthcare cards.

While these are among the top non-payment features consumers prioritize, many younger consumers are inclined to explore additional ways of using digital wallets for specific money transfer purposes, as outlined in a recent PYMNTS report.

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