What payment options do different generations want from businesses?

Nearly half of UK consumers have walked away from a purchase in the last year because their first choice payment method wasn’t available. For businesses this is a costly problem and it’s growing fastest among Gen Z. 

The importance of payments experiences 

The evolution of the digital payments landscape continues at pace and this leaves businesses with the challenge of meeting rapidly shifting generational expectations. Our previous research has confirmed what many businesses already suspected, that customer experience and payments are intrinsically linked.  

A survey across several industries across the public and private sectors highlighted the importance of payments to overall customer satisfaction. Even if you get everything right in terms of your product offering, service levels and pricing, a failure to offer the right payment channels could mean that people will take their business elsewhere. At the same time, differences in generational expectations means that finding the best combination of payment methods is far from straightforward.

Our research 

To help businesses navigate these changing demands, we have carried out further research to understand what different generations expect from businesses.  

We commissioned Censuswide to survey 1,000 consumers from across the UK about their preferred payment methods and a range of different factors impacting their overall experience making payments with businesses. 

How to avoid abandoned purchases 

Our latest research reveals that consumers are more willing than ever to abandon a purchase. 

• In the last 12 months, 45% of consumers have walked away from completing a purchase because they could not make the transaction using their preferred payment method.  
• This figure rises to 65% for Generation Z and 61% for millennials, compared to one in three of Generation X and one in four Baby Boomers.  
• The majority of Generation X (58%) and Baby Boomers (71%) reported that they haven’t abandoned a purchase because of the absence of their preferred option at checkout.  

What happens if customers can’t find their preferred payment method? 

We know how important a quick, easy and convenient payment experience is to increase the conversion rate of purchases, but far from simply delaying a sale or losing a single purchase, our findings show that the impact could be much longer-lasting.  

Our survey revealed that 35% of respondents would actively look for another business that offered their preferred method and, alarmingly, 31% would avoid shopping with them again. Just 20% reported that nothing would change as a result.  

There are significant differences in the actions of different generations. Almost half of Gen Z would look for another business, whereas 37% of Baby Boomers would avoid using that business again.  

We know how much time and money it takes to capture a prospective customer, and our research highlights that payments cannot afford to be an afterthought for businesses.  

What payment methods do different generations prefer?  

Clearly, offering your customers their preferred payment method is key. 90% of survey respondents reported that it was important for businesses to offer their preferred option when they shop. 

Unsurprisingly, the preferred payment method for UK consumers is a debit card.  

Our survey revealed that:

• Consumers use an average of 2.7 payment methods per month.
• 57% of respondents reported that a debit card was their most used option for everyday purchases. 
• This was followed by cash (37%), digital wallets (31%), credit cards (29%) and direct debits (25%).  

The generational differences in preferences are stark. Digital wallets are now the most frequently used payment methods for Gen Z. 45% of this generation use digital wallets most often for purchases, ahead of debit cards and cash.  

The majority of millennials (51%), Generation X (64%) and Baby Boomers (66%) still use a debit card most often.  

What do these findings mean for businesses? 

Our survey underscores that payments are central to customer experience. It’s no secret that customer experience and payments are deeply interconnected, but far more than being a small inconvenience, a failure to meet expectations will drive customers away from your business towards your competitors.  

The payment methods consumers use are becoming increasingly complex. Digital wallets continue to grow in popularity with younger customers, while more traditional methods like debit cards are still popular across generations.  

For businesses this means it’s not enough to offer one or two digital payment methods, you need to understand which payment experiences your core customers actually value.  

Perhaps most importantly, our research shows that there isn’t a single one-size-fits-all payment strategy. Businesses need to ensure they are continuously adapting their offering to meet changing expectations in the fast-moving payments landscape. As new technologies like open banking and embedded payments evolve, the generational payments divide is only set to widen. The winners will be those who anticipate those shifts before their customers do.  

To explore these findings in more detail and hear from payments experts on what this means for finance and customer experience leaders, join us for our upcoming webinar on 25 November. We’ll be unpacking the full survey data and discussing practical strategies to serve every generation through a unified payments platform. 

Register now to secure your place on the webinar.