Generational payment methods: insights for SMEs

Our payment method insights will help you master the art of accommodating different payment preferences for different generations.

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Putting friction in front of a customer at point of payment is one of the worst mistakes a business can make. It’s no good setting up your ecommerce checkout or credit card processing system, only for the tech involved to be irrelevant for a large sector of your potential customer base. Technology continues to revolutionise the way we conduct business – and it should come as no surprise that payment preferences among different generations are evolving as well.

Understanding these preferences is more than just a matter of convenience; it’s a strategic move that can significantly impact the success of your small business. 

Whether it’s accommodating Gen Z’s love for mobile wallets, Millennials’ embrace of online transfers, Gen X’s comfort with credit card machines, or Baby Boomers’ trust in traditional payment methods like cash and cheques, tailoring your payment strategies to align with the expectations and habits of various generations can not only enhance customer satisfaction, but also unlock new avenues of profitability for your business.

In this article, we will explore the payment preferences exhibited by different ages, plus the opportunities and challenges of catering to a customer base that spans generations. 

Payment preferences by generation

From embracing digital payment options to providing personalised experiences and prioritising security, this section serves as a comprehensive guide to what each generation desires in their payment gateways and online payment systems.

Gen Z

Did you know?

According to Digital Transactions, nearly 60% of Gen Z make payments with a mobile wallet.

Generation Z, born between the mid-1990s and the early 2010s, are true digital natives. They prefer digital payment methods, such as mobile wallets, online banking, and contactless.

Gen Z has grown up with technology and is confident in using digital payment methods. They often expect a high degree of convenience and security from the start, and will be quick to air their grievances (in the form of chargebacks and refunds, or social media discontent) if the levels of quality are not up to par. They also value independence and autonomy, seeking ways to pay that allow them to manage their finances with minimal interference.

This generation values speed and convenience, so SMEs need to offer seamless, tech-driven payment options to attract and retain this demographic. They appreciate instant results and seamless experiences, and they may become frustrated with slow or complicated payment processes.

How to accommodate payment preferences for Gen Z

  • Offer mobile payment options like Apple Pay or Google Wallet.
  • Implement an intuitive and user-friendly online payment portal.
  • Ensure a responsive and mobile-friendly website.

While not a traditional retailer, Netflix is one brand that is doing all three of these things well. It offers an excellent example of a mobile-friendly website and their platform is accessible on mobile devices, allowing Gen Z subscribers to stream their favorite shows and movies on the go.


Did you know?

According to, 75% of millennials have a PayPal account.

Millennials, born between the early 1980s and the mid-1990s, are a tech savvy and diverse group with varying preferences. They often use a combination of digital payment methods, credit cards, and traditional banking.

Many millennials embrace mobile payment apps like Venmo and PayPal for peer-to-peer transactions, making it essential for SMEs to support these platforms.

Millennials value financial empowerment and control. They prefer payment methods that offer transparency and easy access to transaction information. They appreciate personalised experiences and are more likely to engage with businesses that offer tailored rewards, discounts, and payment options.

And as the generation that grew up tinkering with Myspace and learning the intricacies of technology and growing it into what it is now, Millennials are optimistic about technology’s potential to improve their lives, and open to adopting new payment technologies if they will enhance their convenience and security.

How to accommodate payment preferences for Millennials

  • Accept mobile payment apps and consider offering discounts for using them.
  • Enhance your online shopping experience, including easy checkout processes.
  • Leverage social media for payment-related promotions and updates.

Gen X

Generation X, born between the mid-1960s and the early 1980s, tends to prefer a mix of traditional and digital payment methods. They are comfortable with credit cards and online banking.

Gen X tends to be pragmatic and value-oriented. They seek reliable payment methods and are less likely to be swayed by trendy options.

They place a high emphasis on security and are cautious about sharing their financial information. Building trust is crucial when catering to Gen X, so SMEs should prioritise robust cybersecurity measures when catering to this demographic.

They are generally open to digital payment methods but may still rely on traditional options. They appreciate businesses that offer a range of choices.

How to accommodate payment preferences for Gen X

Starbucks has a highly successful loyalty program called “Starbucks Rewards.” Gen X customers earn points for their purchases, leading to free drinks and other perks, which encourages them to return to Starbucks regularly.

Baby Boomers

Baby boomers, born between the mid-1940s and the mid-1960s, often favour traditional payment methods like cheques, cash, and in-person transactions.

They place great importance on personal relationships with businesses, so taking payments over the phone may work for this generation. In-person interactions and exceptional customer service are key. SMEs targeting baby boomers should focus on providing excellent in-person customer service, accommodating their payment preferences.

Baby Boomers value stability and familiarity in their payment methods. They often prefer traditional options like cash and cheques, are focused on financial security and may be more cautious when adopting new payment technologies. Trust-building is vital.

How to accommodate payment preferences for Baby Boomers

  • Accept traditional payment methods like cheques and cash.
  • Offer personalised in-store experiences with attentive customer service.
  • Provide clear and straightforward pricing information.

Known for its exceptional customer service, John Lewis provides personalised in-store experiences that resonate with Baby Boomers. Their attentive staff and commitment to customer satisfaction aim to ensure a very welcoming shopping environment.

How to accommodate payment preferences for each generation

Gen Z: embrace mobile payment options and contactless payments, along with loyalty programs offering digital rewards and discounts.

Millennials: provide a seamless online payment experience with a focus on secure transactions, and implement personalised offers and loyalty programmes to enhance engagement.

Gen X: offer a variety of payment methods, including credit cards and online banking, while highlighting robust security measures to gain trust.

Baby Boomers: accept traditional payment methods like cheques and cash, prioritise in-person interactions, and excel in delivering exceptional customer service.

Challenges of meeting the needs of multiple generations

Meeting the diverse payment preferences of various generations presents several challenges for SMEs. 

You may need to invest in new payment infrastructure and software to accommodate the preferences of the generations, and this transition can be resource-intensive or costly in the beginning stages.

Security is another significant concern, particularly when it comes to online transactions. Ensuring the safety and trustworthiness of digital payment methods becomes paramount, especially for older generations who tend to be more cautious about the security of their financial transactions.

Crafting effective marketing strategies that resonate with different age groups requires careful consideration and adaptation. Each generation possesses distinct values and communication styles, making it essential for SMEs to tailor their messaging accordingly.

And finally, the process of training staff to handle a variety of payment methods (as well as customer preferences and grievances) is crucial, but can be time-consuming.

While these challenges may appear daunting, it’s important for SMEs to recognise that they are not insurmountable obstacles. With the right strategies, SMEs can overcome these challenges and thrive in an environment that caters to these diverse payment preferences. Customisation has the potential to pay off big time in terms of return on investment for all your efforts.


For SMEs, the ability to remain flexible and innovative will be essential in the years to come. This flexibility may even extend to rebranding your business if necessary, aligning your image and offerings with the changing preferences of diverse customer groups – or proactively seeking new payment methods that extend better to your customers’ needs.

Understanding of the unique payment habits exhibited by Gen Z, Millennials, Gen X, and Baby Boomers will allow your businesses to customise its approaches and cater to every customer group. 

In doing so, embracing the diversity of payment methods across generations can pave the way for heightened customer satisfaction (and sales) in the era of digital transactions.

Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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