Generation Z prefers to forgo cash and relies on digital currencies. Many young people now mainly rely on apps like Apple Pay or Google Pay instead of cash. This is a trend reported by many studies. However, paying only digitally also poses risks that experts warn about.
The Germans love their cash, more than most other Europeans. This was established by a study that quotes, among others, die Zeit. However, at least in other countries, this love for cash is shrinking more and more. Especially among young people. Various reports independently confirmed this (via businessinsider.com):
- In the USA, the “Federal Reserve,” the central bank of the USA, found that cash accounts for only 14% of all purchases and that cash is predominantly used by people over 55 years old.
- A McKinsey survey (management and consulting) from 2024 revealed that one in five in the USA and Europe who use digital wallets often leave home without a physical wallet.
- Link Scheme, a non-profit organization advocating for access to cash in the UK, stated that only 38% of 18 to 24-year-olds see a wallet as essential for their daily lives.
The digital wallet fits better with the fast, mobile lifestyle of many young people
Why do young people consider cash outdated? There are various reasons for this. Many young people now mainly rely on apps like Apple Pay or Google Pay to pay their bills. Digital or so-called “mobile wallets” are more compatible with their mobile lifestyles than having to constantly carry cash:
36 percent of Gen Z do not shop at stores that only allow cash payments, while among Boomers, it is only 14 percent. This is reported by the magazine Spiegel. In Germany, already 25% of Gen Z are said to use digital wallets weekly, and 69% use debit cards daily or weekly to avoid debt.
For young people, cash is just an emergency fund: A representative survey conducted by the Allensbach Institute for Demoscopy (IfD) on behalf of the Initiative Deutsche Zahlungssysteme e.V. reports that 44% of those surveyed said they only have cash for emergencies and only rely on it when they cannot pay cashlessly (jungezielgruppen.de).
Furthermore, Gen Z is experimenting more with cryptocurrencies than older generations: 23% already own such currencies, while among Boomers, the figures are around 10%.
What speaks against the development? In case of power outages or technical problems, digital payments fail. In Sweden, for example, cash is almost gone, and there is a great fear that in the end, the network might fail, and nothing can be paid. This is reported by die Tagesschau.
Additionally, using digital wallets can exclude people who do not have access to them or who are otherwise restricted, or a state deliberately excludes people by shutting down digital payments. Moreover, data privacy is often a debated issue when it comes to digital currencies.
We live in financially uncertain times. Generation Z resorts to drastic measures to survive, primarily to pay off high debts. Young people are not depleting their savings to finance a vacation or other luxury but to cover unexpected emergencies or their high debts: Generation Z is depleting its savings, skipping meals, and selling their belongings just to get by
