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When it comes to payments, Millennials want options that match their mobile-first lifestyle, such as mobile wallets, says a study by payments platform provider PXP Financial Ltd.
Overall, 56% of Millennials—generally those born between 1981 and 1996—use a mobile device daily. Apple Pay is one of the most popular mobile wallets among Millennials, with 20% of younger millennials using the wallet on a daily basis.
When it comes to shopping categories, 14% of Millennials prefer mobile wallets for fashion and accessories purchases, 13% use mobile wallets for health and well-being purchases, and 11% prefer to use mobile wallets for fashion and tech purchases. For travel related payments, 9% of Millennials use a mobile wallet, especially for app-based hotel check-ins. For international travel, 64% of Millennials value multi-currency wallets, according to the report.
PXP surveyed more than 2,000 consumers in the United Kingdom and United States about their payment preferences for the report.
Despite the growing popularity of digital wallets among Millennials, debit and credit cards, and cash are popular alternatives. Some 40% of Millennials use debit cards for grocery purchases, while 38% use debit for hotel bookings.
For big-ticket purchases, credit cards are a favored payment option with 24% of Millennials using that payment method. Credit card perks, such as rewards or cashback, also play a big role in Millennials use of credit cards, with 24% saying they will use a credit card to access rewards.
Cash remains in the mix as an often-used payment method for Millennials, especially when dining out. Some 20% of Millennials prefer to pay with cash when dining out, often for splitting bills in group settings, the report says.
Security is a key factor for Millennials when choosing a payment option with 40% saying they place a premium on it. In addition, 34% of Millennials say they worry about fraud or data theft. Factors influencing why Millennials value security so highly include the threat of online fraud and data breaches. “With rising concerns over online fraud and data breaches, it’s no surprise that security tops the list when millennials choose how to pay…making it a make-or-break factor for [earning] their trust,” the report says.
Speed is another factor influencing which payment options Millennials use with 29% saying they will choose faster payment options wherever possible.
Hidden fees are a major pain point for Millennials when it comes to choosing a payment option, with 36% classifying them as an “annoyance.” Other pain points include complicated refund processes, especially for online transactions.
“As millennials transition into their 40s, their influence on digital payments remains strong,” the report says. “To capture this market, businesses must embrace tech-forward, mobile-first payment systems that offer security, personalization, and a smooth experience. Retailers who adapt will secure the loyalty of a generation that thrives on connection and meaningful spending.”
