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Updated Apr 10, 2024

Know Your Customers: How Different Generations Prefer To Pay

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Julie Thompson, Contributing Writer

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Which payment method your business accepts isn’t about jumping on the hottest tech trend or sticking to the system that’s easiest for you. 

Selecting the right payment tools for your business requires understanding how your customers want to pay, so you’re equipped with all the things you need to meet their expectations and remain competitive in the market. Here’s a look at how different demographics like to purchase their items and services.

How each generation prefers to pay

Whether your goal is to attract mobile-dependent Gen Zers or tech-cautious baby boomers, you want to use the right payment tool for your clients.

Generation Z

Gen Zers (born 1997-2012) represent the most significant generation in the United States with over 86 million. A substantial portion of consumers born in this generation prefer to use cash in person – 37% – according to Logica Research. However, as Gen Zers grow up in the digital age, they are likely to adopt payment apps; and even create them.

Typically, Gen Zers are comfortable using technology for financial transactions – including mobile payment apps and apps that allow them to transfer funds instantly on their mobile device. This demographic also makes up the second largest user group of digital wallet users, after millennials, according to Global Payments.

Most Gen Zers prefer digital subscriptions like music, TV and gaming over physical CDs, DVDs and games. Gen Z is also known for its budget-conscious consumers, thrifting their wardrobe and accessories and purchasing second-hand. However, Gen Zers are less likely to sign up for loyalty programs. This generation believes that such programs make them spend more than they might normally.

Gen Zers are showing caution when taking on debt and using buy now pay later (BNPL) programs. This is most likely from experiencing older generations cash strapped because of misusing credit cards, or perhaps the rising cost of living and student debt.

While Gen Zers enjoy shopping online, this group prioritizes retailers that offer brick-and-mortar stores and an e-commerce option compared to brands with an online-only presence. Known as the most diverse generation, Gen Z can’t be categorized easily. Therefore, systematic research is required to effectively engage this generation to understand their evolving digital and financial needs.

Did You Know?Did you know

Nearly 60% of Gen Z make payments with a mobile wallet, according to research in Digital Transcations. And date from FIS Global found that a whopping 67% are intrigued with the notion of paying with a microchip in their hand.


Millennials (born 1981-1996) are more likely than older consumer segments to use technology and mobile devices to pay; they’ve come of age surrounded by rapid technological advancements.

Also known as Generation Y and the Net Generation, millennials are more likely than Gen X or baby boomers to use mobile wallets that include credit, debit and prepaid cards. About 75% of  millennials have a PayPal account, and frequently split bills or pay using a P2P payment app like Cash App, Venmo or Zelle.

This reward-obsessed generation frequently signs up for branded mobile payment apps, such as Starbucks and Dunkin Donuts, which provide frequent discounts. Millennials tend to prefer smaller rewards more often, thus prolonging brand loyalty.

FYIDid you know

Pymnts found that millennials have the highest percentage (25%) of high payments diversification (HPD), using at least three payment types. Millennials have adopted digital wallets, dabbled in crypto and participated in BNPL.

Generation X

Gen Xers (born 1965-1980) are the majority group who own smartphones. While Gen X remembers the analog life, they don’t usually have a problem adapting to digital services. 

Gen Xers are heavy users of credit cards. According to, this generation is far more likely to have credit card debt than millennials and baby boomers, carrying an average of nearly $8,000 in credit card debt.   

Gen X is the oldest generation comfortable sharing personal financial information via online apps and retailers. Additionally, Fis found that more than half of Gen Xers (62%) agree that contactless payment is seamless for everyday purchases.

Baby boomers

Baby boomers (born 1946-1964) have seen significant changes to technology, consumerism and payment options. Like Gen X, they use credit cards but are more likely to pay their monthly balances.

With 35% of baby boomers in retirement, according to Fis, this generation is attached to the traditional ways they have shopped and paid over the years. However, baby boomers are surprisingly open to adapting to digital payments if it provides convenience and value. 

Bottom LineBottom line

Understanding which payment method your target audience prefers is vital to communicating that you understand who they are and what they want, and you value their business enough to tailor your omnichannel payment processes to their tastes.

Best POS systems for accepting payments

A point-of-sale (POS) system does more than tally sales. The best POS systems can accept multiple forms of payments, manage inventory and analyze sales data. No matter the size of your business, a POS system is essential for taking your business to the next level.

The best POS systems are easy-to-use. The software is intuitive for seamless integration from generation to generation. In addition, the POS system combines online and offline sales to provide big data needed to adapt to future generations.

You can learn more about some of the top options in our review of Clover, our Lightspeed review, our review of TouchBistro and our Toast review.

Additional reporting by Kristen Gramigna.

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Julie Thompson, Contributing Writer
Julie Thompson is a professional content writer who has worked with a diverse group of professional clients, including online agencies, tech startups and global entrepreneurs. Julie has also written articles covering current business trends, compliance, and finance.
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