Younger Consumers Embracing Mobile Wallets, BNPL

Millennial consumers, along with their counterparts from Generation Z, have increasingly begun to turn to digital-first technologies to meet their banking and payment needs, with mobile methods being particularly popular among them.

A study conducted in March found that 38% of millennial consumers reported using mobile wallets to pay for their purchases in the month leading up to the survey, compared to 22% of baby boomers.

Millennials said they were also more likely to complete their purchases via debit cards rather than credit cards, remaining wary of incurring debt and credit-related fees.

The survey found that 63% of millennials said they used debit cards more often than credit cards. This suggests that millennials are looking for swift, digitally connected but also budget-friendly methods of payment, a trend that could provide important opportunities for the continued growth of embedded finance.

Meanwhile, these same young consumers are also more likely to embrace embedded finance tools such as buy now, pay later (BNPL) solutions, according to another study.

Younger consumers were early adopters of BNPL, with India and the U.S. leading this trend. Nearly three-quarters of millennials and 73% of Gen Z consumers in India said they had paid for something using BNPL tools. Millennials in the U.S. are following closely behind those in India, with 61% now tapping BNPL methods to meet their payment needs.

BNPL methods can be attractive to younger consumers in particular because they do not come attached with the same fees as other payment methods such as credit cards. These tools can also be easily added to eCommerce sites’ checkout experiences, making them convenient for younger consumers who have become used to swift, one-click payment experiences.

For more on how younger consumers are reshaping the world of embedded payments, download the May Embedded Finance Tracker, a collaboration between PYMNTS and Galileo Financial Technologies.