Skip to main content
Inside WEX

Millennials: How They Pay Today

November 2, 2015

Today’s youngest generation of workers, Millennials, are currently in the ballpark of 18 to 35 years of age—and they’re easily the most scrutinized and talked-about segment of the population for their influence as both consumers and employees. By most accounts, they’re the largest generation in history, even behind the baby boomers. Let’s explore Millennials’ relationships—behavior, preferences, and expectations—with the most common payment methods:


A study by the Federal Reserve Bank found that compared with those older than them, young Millennials aged 18-24 used cash for nearly half of their purchases, and 40% of these Millennials actually prefer cash, the highest percentage of any age group. However, a JWT study, The Future of Payments and Currency, reveals 85% of Millennials have used cash in the past year compared with 95% of other generations. This discrepancy might be explained by the fact that young adults (those in the 18-24 age range) may have limited access to banking, which impacts what they carry in their wallets, leather or digital.

Checks’s The Unbanked Generation: A Guide to the Financial Habits of Millennials, highlights that more than one-fifth of Millennials have never written a physical check to pay a bill. It’s no surprise that virtually no consumers younger than 35 prefer checks, according to data from the Federal Reserve Bank of San Francisco. Checks as a form of bill payment have naturally been crowded out by digital alternatives. Millennials are coming of age in the era of digital payments that can be made online with a credit card or scheduled for automatic withdrawal from a bank account.

Credit Cards

A Bankrate survey shows 63% of Millennials ages 18-29 don’t have a credit card compared with 35% of adults 30 and over, which researchers attribute at least in part to a fear of debt. Millennials grew up as the economy was slow and most likely racked-up significant college debt along the way—and if they don’t plan to pay off a credit card balance each month, the form of payment be seen as another bill to pay. It is widely argued that Millennials are “missing the boat” on the many advantages of credit cards (e.g. security and the building of a strong credit history), as discussed in Time articles 3 Credit Card Mistakes Millennials are Making and Millennials Prefer Debit Cards to Credit Cards. Here’s Why They’re Wrong.

Debit Cards

A debit card provides the convenience of a swipe-able credit card without the risk of charging up a balance. And interestingly, the cash-loving 18-24 year olds in the Federal Reserve Bank data set has the highest preference for debit cards. The Millennials with Money study shows Millennials (45%) use prepaid cards more than Gen-Xers (35%), Boomers (18%), and those ages 68 and older (4%), likely because they help them manage their spending.


Research supports the obvious: that younger people love their mobile devices—and they’re among the first to embrace mobile-based payments in order to, as revealed by Payfirma, to speed up transactions, split bills or expenses with friends, or keep better track of their purchases. The study done by shows that 86% of those aged 25-34 are smartphone users, and Millennials use apps and mobile tools to make bill payments (38%) and set up automated recurring payments (24%).

Alternative Payments

What about all of those other innovative payment methods that have been slower to catch on across the generations? As might be expected, Millennials are earlier adopters when compared with their elders.

  • Research presented on shows 52% of Millennials use or are considering using nontraditional payment companies like PayPal or Venmo, and that’s twice the percentage for those 50 and over.
  • The JWT study shows 38% of Millennials would be open to a virtual currency like Bitcoin compared with 17% Gen X-ers and 7% Boomers.
  • JWT also indicates 45% of Millennials would be willing to connect their payment info to a wearable device in order to make fast, hassle-free payments.
  • During an enlightening, yet informal, exploration among a small group of Millennials, Financial Services Roundtable’s VP of Government Affairs of Payments discovered that young adults are using P2P money transfer apps regularly—and confidence, trust, and security are important priorities regarding the service they use.

The next question to tackle is “What lies ahead for the payments industry?” There’s a lot of data to wade through and evaluate, but the underlying message is obvious: Millennials are driving change, and their behaviors today predict how payments will be made tomorrow. Stay updated on this topic—more insights into Millennials’ role in shaping payments are soon to come.

Stay connected

Subscribe to our Inside WEX blog and follow us on social media for the insider view on everything WEX, from payments innovation to what it means to be a WEXer.

"*" indicates required fields

Find out how WEX can help grow your business