The ZBD Gen Z Payments Study, based on a survey of over 2,000 18 to 27 year olds in the US and UK, sheds fresh light on what this vitally important generation wants from its interactions with payments, banking and fintech providers. The deep-dive exploration of what shapes Gen Z’s payment behavior reveals that a staggering 86% of Gen Z believe that cashback and loyalty rewards are an important part of making a purchase, and 99% say financial education is important.

Gen Z will likely be the largest and richest generation in human history. Having grown up as digital natives, there’s a tendency to assume they’re exclusively digital and only want to embrace the new. Based on the study, Gen Z regularly use both debit cards (62%) and cash (57%), though usage of digital-first payment methods such as apps (45%) and digital wallets (48%) has overtaken credit cards (41%).

This new study reveals that, far from automatically adopting emerging technologies, Gen Z values diversity and flexibility in their finances across established and emerging methods. They invest in cryptocurrency (24%) as much as equities (22%), yet trust traditional banks (35%) far more than online-only neobanks (5%). Amid seemingly contradictory trends, Gen Z’s interest in rewards and education is a common thread that binds together everything they do.

Key findings of The Reward(ed) Generation: A ZBD Gen Z Payment Study:

• The Reward(ed) Generation: 86% of Gen Z believe that cashback and loyalty rewards are an important part of making a purchase. 70% expect to earn rewards while using apps and playing games.
• Education: Gen Z overwhelmingly believe financial education is important (99%). They learn the most about financial management from family members (47%), considerably more so than school, colleges and educational programmes (29%).
• Plastic not so fantastic: Credit card usage is dwindling due to new credit facilities such as buy now, pay later, and new rewards structures. Payment apps (45%) and digital wallets Google and Apple Pay (48%) have overtaken the use of credit cards (41%) among Gen Z.
• Traditional trust: Traditional banks (35%) are the most trusted type of financial company, while neobanks (5%) are the least trusted.
• Confident but stressed: 80% feel confident in their ability to manage their finances effectively, but 68% often feel stressed about doing so. 76% use at least one type of financial app to help manage their money.
• Ownership: 82% of Gen Z still thinks ownership of physical things is important. 69% are confident of owning a home in future.
• Investing: 67% have at least one investment. Cryptocurrency (24%) is a more popular asset class than equities (22%).
• US vs UK tech adoption: US Gen Z are twice as likely to choose payment apps as their preferred payment method over their UK counterparts (18% vs 9%).
• Financial Security: 64% of Gen Z feel financially secure at this moment in time. However, many are on the borderline. When asked to rate their position on a scale from no financial security to total financial security, the figure was 6.2/10.

Ben Cousens, Chief Strategy Officer at ZBD, commented:

“Our research shows that Gen Z is far from unreachable for the financial services industry; however, it’s true that there’s no one single touchpoint for them. What’s clear is that they expect their engagement with and loyalty to retailers, merchants, platforms and providers to be meaningfully rewarded, not just acknowledged. This paradigm shift is both being powered by and is set to radically alter the payments and fintech landscape, and is why we’ve labeled Gen Z ‘The Reward(ed) Generation’. As an industry, we need a diverse, multichannel proposition that - crucially - rewards Gen Z for the time and money they spend with us.”