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Gen Z spends $143 billion

Whether they’re called Generation Z, centennials or digital-natives, this generation born after 1994 is now the largest in the United States, lacks any discernible attention span and has only seen Seinfeld in syndication. Their favorite celebrities are from YouTube, their friend networks exist mostly on social media networks and they actually know how to pronounce GIF.

The first members of this generation might’ve tossed their hats at college graduations just a few years ago, but Gen Z now represents up to $143 billion in buying power – and that’s without accounting for the influence they have on household spending. If you’re collecting payments for insurance, loans, education or taxes – this generation owes you money.

Collecting that money means developing a greater understanding of these consumers, who are, contrary to popular belief, quite different from Generation Y. Aside from attention spans (12 seconds for Gen Y, 8 seconds for Gen Zers), there is also a shift in social media usage. 34% of Gen Z thinks Facebook is for “old people.” What does that mean for those of us who thought we’re too old for Facebook?

Writing for Forbes, Jeff Fromm states, “Each new generation to the market brings its own set of attitudes, beliefs and behaviors, which can sometimes make them feel mysterious.” We’re here to help solve the mystery of understanding Gen Z, getting them to pay on time and without calling you.

Gen Z doesn’t understand bills

30% of Gen Z finds their bills to be confusing versus the 22% average for Americans of all ages. Given their relative youth and inexperience in paying bills, it seems natural that this would be the case. Adding to this is the anxiousness with which Gen Zers approaches their bills. Gen Z is the most anxious of all age groups when it comes to paying their bills, which manifests itself in calls to call centers and late payments.

Gen Z forgets to pay

The issue of late payments is not limited to Gen Z, though unfortunately, they lead the way in late payments. 53% of Gen Z paid a bill late in the last 12 months compared to 46% for Americans of all ages.

Is this a matter of not having the money? Not necessarily. In fact, if we look beyond confusion, one key aspect is that Gen Z has not developed the financial habits that promote on-time payments. Almost 35% of Gen Z simply forgot to pay a bill in the past 12 months. Just over 10% of senior citizens, those who are typically thought to be less tech-savvy, have forgotten.

Gen Z is just as likely as other generations to be able to pay bills without credit or a loan, but as newcomers to managing their finances, they’re confused about how to pay bills.

Gen Z contacts companies more with billing questions

Confusing bills lead to calls, and Gen Z is not shy about calling. 81% of Gen Zers contacted the company with a question about their bill or account in the last year versus 73% for Americans of all ages.

Companies don’t make paying easy

Gen Z pays late and calls more in large part because companies have not met their needs for easy ways to pay.

79% of Gen Z shows signs of emotional distress when kept away from their personal electronic devices. Have you ever tried to take a phone away from your kids? Yet, less than 20% of companies format their bills for mobile phones.

But formatting your bills for mobile phones isn’t enough. Gen Z receives so many emails and texts in the course of a day that it’s easy to get lost in the mix. To keep things “100” and turn those “frownie” face emojis into smiley emojis, companies must personalize these messages, while keeping them short and clear.

Fortunately, many companies are sprinting to keep up with consumer demand and 49% are currently developing mobile optimized bills.

Beyond building relationships with mobile communications, companies are proving that adding recurring payments and real-time payments decreases delinquencies and customer service calls.

Consumers using recurring payments have 70 percent lower delinquencies

To Better Serve Gen Z, Focus On the 3 Rs: Relationship, Recurring, Real-Time

To build a better relationship with your Gen Z customers, you must improve engagement with them. The good news is, your company doesn’t need a Beyonce-level Instagram feed to win over Gen Z. Put these three at the top of your IT priority list.

Bill management

Managing bills is one place where senior citizens surpass Gen Z in tech. More senior citizens (53%) than Gen Zers (39%) use the web for information on their bills. 43% of Gen Zers have not heard about or know how to manage their bills on the web.

Interestingly, 76% of consumers find online communication tools to be “very” to “extremely helpful”—removing their need to contact the company sending them the bill. If you’re looking to deliver clarity, you must create an intuitive online experience and promote it throughout your customer touchpoints.


According to Javelin Strategy & Research, “Gen Z is the first generation that is truly mobile-native. When the oldest Millennials hit age 25 in 2008, the smartphone with its apps was being born. In that same year, the first of Gen Z was just starting to enter middle school.”

Mobile offers you the ability to bill Gen Z in a way they understand and feel comfortable with. Your bills must be designed for mobile, which is just good practice in general, as 87% of U.S. consumers use smartphones. Again, be sure your messages are personalized and to the point.

Companies today must start looking at innovative payment methods, such as text message payments, as a standard part of their communications. Text messaging is now the preferred customer service channel of Americans.

Another payments innovation that will help Gen Z pay on time is the virtual collection agent. The virtual collection agent acts just like a human collection agent, giving payers the ability to ask questions, receive answers and negotiate payments. 82% note that a website allowing them to pay over time or negotiate the amount they owe would help them pay on time. What’s more, all ages are in favor of virtual collection agents.

Recurring payments

Recurring payments are your answer to forgetful payers. Currently, recurring payments are an under-utilized service, with only 39% of all bill payers taking advantage of this convenience.

The upside is that 72% who pay late are “very” to “extremely likely” to pay on time if they can pay with a debit or credit card. This can easily be combined with recurring payments to create a strong pairing to help customers pay on time.

Though cards are prevalent in all facets of society, some companies do not yet except them in every way consumers could interact with them (mobile, web, live chat, in person, phone). This is a frustrating experience for all consumers, with Gen Z being the most frustrated at their inability to pay by card.

Real-time disbursements via debit card

Remember when we said that Gen Z had an attention span of eight seconds? It should come as no surprise that Gen Z prefers real-time disbursements using their debit card. 19% had already received a real-time disbursement, and of those who have not, 55% would like to in the future. Insurance claims, loan pay-outs and student refunds are just some of the scenarios where Gen Z wants to receive money immediately.

As evidence of this demand for real-time disbursements via a debit card, only 36% of disbursements received by Gen Z were by check, whereas 51% of Gen Y, 58% of Gen X and 77% of senior citizens received a disbursement by check over the past 12 months.

While ACH accounts for 50% of disbursements to Gen Z today, there’s strong interest in switching to real-time disbursements like Visa Direct and Mastercard Send. As this group is the most likely to call and ask, “Where’s my money?” it is important that you consider faster disbursement methods to prevent calls and maintain customer satisfaction.

Interest in real-time disbursements isn’t limited to Gen Z. 67% of Gen Y and Gen X and 48% of senior citizens say that they’d like to use them. Overall, 63% of Americans who received a real-time disbursement to their debit card found it to be “very” to “extremely helpful” to avoid calling the company that owed them money.

In response, organizations are adding new payment methods

Across verticals, from healthcare to auto financing and higher education, organizations are offering or developing new payment options to help Gen Z pay on time and not have to call with questions. In terms of new payment options, executives are most interested in the following:

  • 77% text message payments
  • 68% bills optimized to mobile phones
  • 67% virtual collection agent
  • 64% real-time disbursements
  • 62% recurring payments

Promoting new payment methods

Adding new billing and payment methods is step one. Getting consumers to know they’re available is step two. While consumers want to use new payment methods like text message payments, many don’t know they’re offered. This speaks directly to the need for improved consumer communications.

Promoting your payment methods can pay big dividends. A top-25 bank shifted 33% of its call center payments to self-service with a search engine marketing program. We just created a series of videos to help you learn how to follow suit and raise consumer adoption of electronic billing and payment.

Staying relevant requires constant change

The unique attributes of Gen Z could spell the demise for companies that are slow to change. Traditional TV giants like NBC are threatened by the likes of YouTube because that’s where Gen Z goes for entertainment. How your company responds to the challenges of engaging Gen Z may determine its long-term success.

[1] Unless otherwise noted, all data comes from consumer survey sponsored by Visa and ACI Worldwide, conducted by Aite Group.

Director of Product Management

Marc Sczesnak serves as Director of Product Management for ACI Worldwide and has held numerous leadership roles in the financial services industry at Chase, Citi, US Bank and retailers Sears and Macys.  Most recently before joining ACI, Marc lead TD’s North American Retail Card Services business as President. Marc lead the business to achieve a 27% Compound Annual Growth Rate over his last three years at TD with a 40% return on invested capital.  Marc also orchestrated the rebranding of the Macys Star Rewards program and the launch of the largest Gold MasterCard program at Sears.  Marc writes about the convergence of marketing, loyalty and payment processing. He believes in the untapped potential in your most frequent consumer touchpoint – your electronic bill. By introducing interactive eBilling, Marc sees organizations improving their customer experience, lowering costs and increasing consumer touchpoints.