Aside from centerpieces, natural diamond engagement rings, and home ownership, apparently carrying a physical wallet is also a great gift no matter what generation you’re in.
In fact, many headlines suggest that digital wallets (Apple Wallet on iPhones, Google Wallet and PayPal on Androids) are the only way for the Gen Z demographic (those born between 1997-2012) to make payments.
“For a growing number of young people, a wallet full of cash and cards is as outdated as millennials, frumpy socks and skinny jeans,” the New York Times wrote in March.
Similarly, in February, the New York Post declared that “carrying money, ID and debit cards in a wallet is like carrying around old butterscotch candies.”
So why are conversations about digital wallets focused specifically on Generation Z?
Harry Temkin, chief digital officer at financial technology platform DriveWealth, told Yahoo News it’s about making digital wallet design suitable for a digitally growing generation. They want convenience, options and accessibility.
“If you look at any of the above [digital] wallets, they offer direct deposit, they offer two-day advance, [might be] It offers high efficiency savings,” said Temkin. “They bring all of this together in super cool, innovative ways, and it appeals to a younger audience.”
Some of the push towards digital wallets occurred after contactless payments became popular during the pandemic; During this period, many members of Generation Z began opening their first bank account, withdrawing cash at their first job, or using their first credit card. Temkin stated that the attractive design of the wallets is what makes them attractive to young people.
However, Generation Z is not the only one interested in these. Generation Z’s connection to digital wallets may be a marketing tactic. For example, WARC, a marketing platform, claimed that association with the term “Generation Z” “shapes trends and influences what is popular.”
McKinsey reports that by 2022, nearly nine in 10 Americans across all age groups use some form of digital wallet, and that number will continue to grow.
Temkin, who is in his late 50s, said he and his children all use digital wallets.
Google Wallet executive Dong Min Kim said that as more people use digital wallets for payments, it’s inevitable that consumers will want it for “non-payment essentials” such as health insurance cards, public transportation cards and ID that already exist. However, there are only a few states that allow residents to provide digital versions of their state IDs or driver’s licenses.
However, there is also a security element for some digital wallet users. The 21-year-old Florida resident told the New York Times that in the event of a mugging, his credentials and cards would not be compromised because physical copies of them could not be made, they would all be encrypted. on your phone.
Gen Z has concerns even after growing up in the digital age
But on the other side of the coin, growing up in the digital world has made many Generation Z members more cautious.
Gemma, 23, told Yahoo News she has Apple Pay but is trying to use cash more often.
“I don’t want to contribute to the obsolescence of cash,” he said. “I have a friend who pays cash for everything, right down to her mortgage. I think my other friends are pretty 50/50. “They pay their bills online, they do some online shopping, but everything they buy in person, they do with cash.”
A 20-year-old Reddit user who declined to give his name also agreed. They told Yahoo News they don’t have credit cards and carry cash because “it’s accepted by almost everyone.”
Gabe, 28, said he saved his credit card information in a secure digital wallet app to make it “easier to shop online.” But he also highlighted the “nightmare” of his phone battery dying, leaving him without any other access to money or identity.
“Two or three cards won’t take up much space,” Gabe added. “I was actually hiding [subway] “I put my card in my phone case, and at that point it was even more useful than a digital wallet.”
In terms of public transportation, some cities like New York and Chicago have tap-to-pay options where commuters can use their digital wallets instead of purchasing physical tickets. Other major US cities, including San Francisco and Philadelphia, allow users to download apps for digital transit tickets.
Gemma added that another issue was privacy. Concerns about digital surveillance have reached an all-time high, especially with the recent proposal to ban TikTok.
“I don’t like having my purchases tracked and judged,” he said.
Google Wallet told Yahoo News that it is “secure and private” and “does not share your real credit card number with businesses.”
“You have choice, control and transparency when it comes to your privacy,” the spokesperson said.
A representative from Apple Wallet said, “iCloud encrypts your wallet data when it is sent over the internet and stores it in encrypted form when it is on Apple servers. Apply Pay uses a unique transaction code when you make a purchase, so your card number is never shared with a merchant or transferred to Apple servers .”
DriveWealth’s Temkin added that from a regulatory perspective, “there will always be monitoring to ensure customers are kept safe.”
“Our wallet technology creates this seamless transformation of money,” Temkin said. “And that’s something that simply wasn’t possible a few years ago.”