As Gen Z Gains Spending Power, Merchants Need to Adapt.


Gen Z’s spending power is increasing and will continue to skyrocket in the next couple of years. In a recent Javelin report, “Gen Z is Reaching Adulthood and Merchant Service Providers Need a Plan,” Daniel Keyes, Senior Research Analyst of Merchant Services at Javelin Strategy & Research, examines this generation’s purchasing power and why merchants need to focus and build on their relationships with these young consumers.

Unlike some of their older cohorts, many Gen Z consumers are comfortable with a vast array of payment methods—whether it’s paying with a mobile wallet, through a peer-to-peer (P2P) app like Venmo, or via their credit or debit cards.

While Gen Z has grown up with alternative payments methods readily available, leading to some uncertainty about the long-term prospects for debit and credit card use among younger consumers, Keyes is skeptical that this will radically change the omnipresence of cards. “We don’t know how that’s going to shake out,” said Keyes. “But I don’t think it’s going to take a big chunk out of credit or debit payments. As long as credit cards have substantial rewards, they have a unique value that can’t really be supplanted.”

“I would expect that when Gen Z is 30, 40, 50 years old, they will be using credit cards at least as often as current people in that age group,” he said. “And very likely more so, because of the rising need for digital payments. Credit is going to stick around and be more popular.”

Overall, when it comes to payment methods, Gen Z goes for what’s convenient to them at the moment. Therefore, it’s critical for merchants to ensure their payments operations are readily available to handle any type of transaction.

“Gen Z is looking for very seamless checkout experiences both online and in-store,” said Keyes. “Online, that’s nothing really new. But in-store, the ability to use mobile point-of-sale technology and other new checkout technologies can really streamline the checkout process.”


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