How Different Age Groups Prefer To Pay

Gone are the days when people used cash to pay for everything. Alongside the broad shift to digital, most industries also opened their doors to diversified payment methods.


Consumer behaviour has been a driving force in the continuous diversification of payment methods. With the pandemic speeding up the shift to cashless (and contactless) modes of payment, consumers were able to discover new and easier ways to pay.


A US statistic shows that post-pandemic, only 16% of Americans still carry cash at all times. Also, most people carry less than $50 on average. A vast majority use debit or credit cards to pay for goods and prefer to do so because it’s convenient.


That being said, many businesses and establishments are likewise looking for ways to cater to consumers’ preferred payment methods. This is because conversion and payment methods go hand-in-hand.


Consumers generally feel more at ease checking out from stores that offer their preferred payment methods. A survey conducted by BigCommerce and PayPal reveals that 70% of consumers spend more with a retailer that carries their preferred mode of payment.


Marketers suggest that businesses should be quick to adopt new strategies as consumer behaviour continues to shift. This includes looking into BNPL (Buy Now, Pay Later) solutions and letting consumers know the different payment options you have.


In this article, we’ll discuss the types of payment options popular among different age groups. Depending on your target market, you may choose to offer a combination of payment methods to ensure that you don’t miss out on converting any segment.


Senior Citizens (Baby Boomers)

Most senior citizens reportedly prefer using American Express cards and paper-based checks. Owing to its prestige, AMEX is considered more appealing among high-income retirees who do not mind paying higher annual fees.


A large percentage of senior citizens (68%) over 65 also prefer to pay bills via checks and the postal service. 70% of older individuals still prefer paying in cash for smaller purchases that cost less than five dollars.


Although most of these methods present their own inconveniences, older consumers still prefer them over newer digital models, perhaps because they still distrust technology for various reasons, including accessibility, fear of making mistakes online, and a sense of social responsibility towards local businesses.


Middle-Aged Adults (Generation X)

Gen X-ers grew up during the golden years of the credit card boom and therefore prefer using credit cards to purchase goods and pay bills. The concept of indulging in larger purchases without needing to pay upfront is part of credit cards’ foremost selling points.


As such, Gen X adults compose the vast majority of people who drove the ‘swipe and sign’ credit card culture during the ‘70s and ‘80s. Newer models such as EMV cards tend to be a bit confusing to middle-aged consumers due to a departure from the classic swipe and sign method. EMV cards utilize credit card chips and PINs to combat credit card fraud.


Another preferred payment option for middle-aged adults is paper-based checks, commonly used to pay for certain purchases and bills.


Millennials (Generation Y)

Millennials have the most varied preferred modes of payment. They’re influenced by both older and newer payment methods, such as:

● Credit Cards

● Checks

● Digital modes of payment (PayPal, BNPL solutions, mobile payment apps)

● Cash

● Prepaid Cards


Surprisingly, millennials also rely heavily on cash more than older and younger generations. However, the most preferred payment method among millennials is mobile wallets. Research reveals that 50% of millennials use their mobile devices regularly for payments and that 70% of them prefer mobile apps because of rewards and payment incentives.


Credit card ownership also increased by age, with 50% of younger millennials (25 - 31 year-olds) and 63% of older millennials (32-40 year-olds) reportedly owning at least one credit card.


Gen Z

Having grown up in the digital age, most younger consumers largely prefer electronic payment methods, such as:

Peer-to-peer payments

● Mobile wallets

● eCommerce


Comfortable with technology, Gen Z prefers using apps that allow them to transfer funds instantly. Personalized experiences and loyalty programs also tend to appeal to this group. They also tend to be more budget-conscious than their older counterparts and thus favor apps that allow them to split expenses with their peers.


In Conclusion

If your clients are a healthy mix of all age groups, it’s best to offer as many payment types as possible. After all, having payment options that customers prefer dramatically increases the likelihood of conversion. For any assistance, feel free to contact our merchant services team today.




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