How Gen Z likes to get paid with Amex, Wise, and DailyPay

This episode of the podcast explores how Gen Z likes to interact with financial services. We explore Gen Z’s digital nature, their preferences for convenience, and their global outlook. The conversation touched on various financial tools and solutions offered by respective institutions to cater to Gen Z’s needs. We discuss the importance of financial literacy, transparency, and authenticity in engaging and educating this generation about financial wellness. Additionally, we delve into topics such as cross-border remittances, early wage access, and the evolving landscape of financial technology and services for Gen Z.

This conversation is part of a special podcast series where we explore the fascinating Gen Z deeper: their relationship with money, how they like to save, spend, and borrow money, their fears and aspirations, and their connections to social issues.

Joining me on this episode is Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking, Ankita Dmello, Senior Product Manager at Wise, and Rob Nardelli, Director of Commercial Banking and Strategic Partnerships, at DailyPay.

Tearsheet thanks our sponsor Publicis Sapient for their support. Read more and download customer research about Gen Z and financial services at Steezlife.Co

Now, let’s talk about Gen Z and their connection with financial services

The big ideas

• Digital Natives: Gen Z is highly tech-savvy and prefers digital platforms for financial interactions.
• Convenience Matters: They prioritize convenience in financial services, seeking seamless, hassle-free experiences.
• Global Outlook: Gen Z has a global perspective, influencing their financial decisions and preferences for cross-border services.
• Financial Tools: Institutions are adapting by offering innovative tools to meet Gen Z’s needs, like mobile apps, digital wallets, and intuitive platforms.
• Financial Literacy: Educating Gen Z about financial literacy is crucial, emphasizing transparency and authenticity in financial education.
• Tech Evolution: The financial landscape is evolving rapidly with fintech, impacting how Gen Z accesses and engages with financial services.
• Cross-Border Remittances: Gen Z’s global outlook necessitates efficient and cost-effective cross-border remittance options.
• Engagement and Authenticity: Institutions aim to engage Gen Z through authentic communication and services aligned with their values and needs.

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The following excerpts were edited for clarity.

Gen Z’s predilections for specific features and solutions

Ankita Dmello, Senior Product Manager at Wise: We know that Gen Z is a very digital generation. They want everything really fast, really quick. So in that sense, they’re slightly different to the other generations, because they’ve just grown up with the internet, they’ve grown up with so much convenience at their fingertips, that seeing anything different is almost not acceptable for them compared to other generations who are more used to waiting a bit longer for things.

I think specifically for Wise, a couple of things: I wouldn’t say that we’ve built something specifically for Gen Z. But the way that our product works really does cater to Gen Z. And the reason I say that is because we are digital first — we are mobile first. And because of that, Gen Zers do come to Wise maybe more so than other generations, who might want to see a brick and mortar building and just be like, hey, I want to actually go into branch.

A feature that we see Gen Zers really using and really appreciating at Wise is specifically the Wise account or our multicurrency product. Gen Zers are very global in nature. And again, that comes from having access to so much internet and social media — they are a lot more global, as a whole. So for them to be able to access different currencies, to convert into different currencies to travel and use the Wise Card and spend in all of these different currencies is definitely something that’s very appealing for them.

Additionally, on top of that, I think Gen Z is a generation that is very financially literate, or at least hungry for that. Some of the things that we tried to do specifically to cater to that is to be really transparent about how Wise works, about how our pricing works, about the changes in our product. And sometimes you think that a customer doesn’t really need to know all of this, but Gen Z really does. They almost think that if you don’t tell them, you’re hiding something.

Lastly, one of the features where we also see Gen Z coming in is Wise Business. We have a whole separate account that caters to small businesses, and what we’re starting to see more and more as Gen Z grows up, they are going to become this business segment, and a lot of them have side hustles that will probably spawn into bigger businesses. We do see them starting to shift to become some of our business customers as well.

Gen Z’s preferences for financial services

Rob Nardelli, Director of Commercial Banking and Strategic Partnerships, at DailyPay: How do Gen Zers consume their media? Their food? If they want to go somewhere, they’re not waiting till 8pm. And food, right? You’re going to order that typically through an app. If you want to go somewhere, you’re not going to hail a cab, you’re going to press a button. At DailyPay, the global leader in on-demand pay and earned wage access, we feel that your pay shouldn’t be any different. It’s your money, you’ve earned it. Why can’t you have access to that capital?

Gen Z entrepreneurs and business owners

Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking: With the rapid evolution of financial technology, small business owners, particularly the more digital and mobile savvy ones, such as Gen Z, they’ve really experimented over the last few years with a number of back office tools. There really has been this large proliferation of business apps that they’ve played with, whether it’s for their cards, their loans, their payment processing. I would argue that it has been great, because it’s been easy and convenient. But there is a little bit of a downside in that in terms of interoperability, and whether it gives small business owners that full cash flow visibility that they’re looking for.

I would argue that there’s a moment now where small business owners are looking to actually rebound off their back office, and there’s a great rebundling happening. American Express understands this. In Q1 of this year, we launched a free digital cash flow management hub for small business owners called Business Blueprint. It’s a one stop shop to see your money at rest, your money in, your money out — all in one place with easy-to-use visualization. It also has tools for American Express, such as a business checking account or business line of credit.

It also allows you to put in other institutions, external institutions, external banks, external cards. And so it really is about giving a full picture to the small business owner, because that’s what they’re craving on their phone, not on their desktop anymore. That’s really where we’re pushing to cater to Gen Z entrepreneurs.

Financial inclusion and accessibility

Rob Nardelli, Director of Commercial Banking and Strategic Partnerships, at DailyPay: We recently ran a Harris Poll commissioned by Funding Our Future and DailyPay. We found that 96% of Gen Z hourly workers find managing their finances to be stressful — this was the highest of all the categories. I also find managing finances stressful, but specifically, how can you help folks and Gen Zers who average $30,000 in college debt for those that graduate. So add that layer of complexity on top of it.

Mental health is a very serious issue that we’re working through in this country and across the globe. At DailyPay, we have the ability for folks to unlock their wages as they earn it in real time, not having to wait until regularly scheduled payday. And when you think about it, all our bills do not come neatly tucked in tight on payday. Life happens between paychecks. So here’s a tool that allows folks at any time where you can see the available balance on the app. So if and when you need access to those wages, you can do so by the click of a button.

Ankita Dmello, Senior Product Manager at Wise: I think one of the big things about Gen Z is this idea of education and empowering them to feel like they have ownership of their financial payments. I think that the way that I see Gen Z really harnessing that is they use multiple products. They’re not the most loyal generation to a particular bank or particular fintech — which is really going to change the landscape of fintech because you no longer have this generation that is going to bank with one bank and do everything with one bank and stay super loyal for decades to come. What you’re going to see is a generation that is very hungry and very eager for change to the best products. If you are not the best, they will go find it somewhere else. I think what that does is it forces companies to really think about how to be relevant, how to put the best product out there.

I think for Gen Zers themselves, it actually just helps educate the future generations to come to say, Hey, these are the best products out there, this is what you should be using. Because of their digital nature, Gen Zers switch between like 20 different apps a second probably, so they don’t have an issue working with multiple different products. On some level, that’s really exciting. I think that pushes the barriers of competition. I’m just excited to see what else comes up and what new products come out as a result of their behavior as a generation.

Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking: I grew up in a family of small business owners, and what they used to say is ‘cash is king’. What happens now in such a digital savvy world is ‘cash flow is king’. Actually, having access to that and seeing it is what is king. We did a recent survey. And this was a staggering stat to me: 40% of small business owners are passing up on growth opportunities in the year because they don’t know if they have the cash to fulfill on that opportunity.

An example, if you’re a small designer and you finally get a big box retailer to tell you that they’re going to make a big order. It’s great. And it’s scary, because you don’t have that money up front. You don’t know based on the ins and outs whether you can pay for that — to buy the cotton, the zippers, the linen, whatever it is. That’s why I think back to this cash flow visibility — it’s really where we’re focused. It is bringing it in from a myriad of sources, because they’re looking at multiple financial institutions for the best and most authentic product. But you can see what’s happening from your cash, and then they have the chance to pick the best product for them, such as a working capital loan, a line of credit, a term loan, it could be from multiple institutions. I think that’s really going to be the game changer: understanding the data and then picking their options based on the data that’s very endemic to their business.

Gen Z, earned wage access, and building good financial habits

Rob Nardelli, Director of Commercial Banking and Strategic Partnerships, at DailyPay: I’m going to go back to the poll which said that 43% of Gen Z hourly workers are saving less than they were a year ago. We ran this study in July of this year. That’s a concern. In terms of bells and whistles, we have what’s called the Save feature. With our Save feature, we can send $2, $20, $50, whatever you can afford, and put it in a separate savings account for no cost. And you can build those habits. We already know managing finances is stressful. But what if you call that account a ‘laptop’, or you called it a ‘car’, or eventually one day, a ‘home’? Now you’re really helping folks not just unlock working capital, but helping them on their financial wellness journey.

The international nature of Gen Z

Ankita Dmello, Senior Product Manager at Wise: Wise started as a money transfer company. And I think over the years, what shaped the shift and direction into becoming an international account was our customers. Our customer base was growing and changing. Whenever we interview our customers, you’ll often find certain people saying, Hey, I decided to take dance lessons and my teacher actually lives in Turkey and you’re like, oh, okay, I didn’t know you could do a dance lesson on Zoom. But again, these are things that blow my mind. I’m like, Wow, this generation is so different and so impressive in terms of seeking out and going and finding things themselves.

But in terms of the global nature of it, they really are super International. A lot of them seek opportunities internationally. We realized that people were using Wise as an international account, and we started building features to support that. One of our biggest features, which may be less known, is the ability to receive money. Maybe you live in Singapore, but you are a freelancer, and you can now get paid in US dollars, because we offer the ability for you to have a local US bank account number and a routing number. You can actually get paid. All of these things play a really huge role in Gen Z’s lives, and particularly with the effects of the pandemic and this whole shift to remote work, which we also know Gen Z quite like.

That’s a whole other thing of being able to use this account in that way — to facilitate remote work, travelling while you’re working, all of these different things.

Gen Z at work

Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking:
We recently did a survey during the second half of the year around small business owners and their attitudes sorts towards AI. Small business owners are very AI curious. And that is particularly led by Gen Z. We found 41% of small businesses are testing AI these days. The number for Gen Z is well above that. They’re just so comfortable trying new technology, and they’re so focused on efficiency that some areas like that are very exciting and appealing to them.

The big use cases to start are things like making servicing easier. You can imagine chat functionality, making your marketing much more rapidly agile, testing new copy and things of that nature.

With the holiday season approaches, hiring is a big topic, as you can imagine. 68% of Gen Z business owners are looking for seasonal employees this holiday season. And what do they turn to? They’re turning to social media to hire. I think we all know about social commerce. Social hiring is also a very real aspect of it. I think that goes back to the ethos that we talked about: they grew up with crowdsourcing looking for trusted recommendations on products to buy. Why would that be any different when you become a business owner, and are looking for people to invest in? I think that some of those tools that that are there today, they’re adopting them quicker and they’re just using them in different ways that I think we didn’t initially think small business owners would do.

Shopping internationally

Ankita Dmello, Senior Product Manager at Wise: One of the things that we also see is the facilitation of customers purchasing something. It’s not really like an ecommerce transaction, but in a way, it’s like, hey, I want to buy that thing from you. And this is the best way to get it. I think Gen Z are just a lot more open to buying things that they’ve not seen physically before and getting it shipped to them or whatever. Cross border remittance, even with Gen Z, is going to still be very strong and will continue on the path that we have seen for the last few decades.

Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking: Cross border and international is becoming increasingly prevalent in two areas. The first is, there’s been an entrepreneurial boom coming out of the pandemic with over 10 million small business owners created in the last two years — 40% above pre-pandemic rates. Often what they’re starting is an online business, because that’s cheaper, easier to start up. And with an online business, your footprint doesn’t have to be your home state or your home region. It can be global or regional. Accepting cross border payment is really important on the website. That’s a big aspect that small business owners are grappling with, which maybe they didn’t grapple with before. And the second is the importance of engineering and hiring, and that hiring no longer has to be just within your country — it really can be finding the best developers, the best people globally.

Financial education and Gen Z

Brett Sussman, VP Head of Sales & Marketing at American Express, Business Blueprint & Banking: One of the pieces that we believe will be enduring with Gen Z is their need for financial literacy and their desire for it to be authentic. This open finance world of visibility from all your institutions is going to last for this generation. I think what you build on top of that visibility is recommendations, and that could be AI generated or not. But those recommendations need to continue to be authentic. And the authenticity is, hey, we may have great products from our financial institution that does this well. But there are also other products out there from other financial institutions. I think that’s a change. Recommendations always felt slanted to the existing financial institution. I think if we can show and provide the transparency of products one institution has versus the other, that’s going to be really helpful. I hope the future is that visibility, with recommendations, and then full transparency, so the business owner can compare their needs, price, cost, and other terms and conditions all in one place.

Ankita Dmello, Senior Product Manager at Wise: One of the common misconceptions about Gen Z, which I’ve made myself, is that they just have less of a tolerance for mistakes. There’s a big cancel culture and all of that, but I actually don’t think that that’s true. I think Gen Z does get it — they have grown up around Millennials and other generations. I think that they just want businesses as a whole to be honest and authentic and whatever it is that they do. I think if that’s the mindset — that’s what they expect.

So even from a financial literacy standpoint, I think being transparent and being honest about whatever it is that you’re setting out to do is really key for them. That’s what we really try to do at Wise — to make our communication simple, understandable by anybody who wants to read it.

I will say, though, that it is a tricky balance as well, because our customers are global in nature and come from lots of different generations. Sometimes we get customers from other generations or businesses who want the fine print detail, who want things to be explained in a way that looks very similar to what maybe a bank would show. So we’re really trying to cater to a lot of people at the same time. I think that’s probably one of our biggest challenges that we have as an industry is how do you maintain trust across so many different generations when their needs are all quite different? I find that a really interesting topic. I don’t think we’ve solved that. I don’t know if I’ve seen anyone out there in the market that solved it super well.

Rob Nardelli, Director of Commercial Banking and Strategic Partnerships, at DailyPay: When it comes to financial wellness, it’s the whole reason why I exited the banking sector, although I’m still working very closely with financial institutions. I wanted the ability to innovate and truly help folks, serving the underserved, helping folks wherever they are in the financial wellness journey, and helping them move forward. I think it has to happen in three steps. And in order, inspire, educate, and give them the tools to succeed. If you just educate, and you don’t inspire, it’s going to go in one ear and out the other. And if you’ve seen some of these budgeting tools that others have put forward, they’re not very interactive. They’re pretty boring to read through, even though they are helpful tools.

What if you could inspire folks to make things simple enough that anyone could understand them, and then educate right through the lens that people are actually motivated to save for that laptop or for that car. Then you got to give them the tools to succeed, meaningful tools, like the Save feature and others that are out there, but communicate that in a way that drives their inspiration first, and then educates them about the tools that are available to them.