No More Credit Cards, Cash, or Checks? Is the Future Really Cashless?

The last few years have seen a dramatic shift in how people interact with technology. The COVID-19 pandemic accelerated the adoption of digital services, pushing many to try new methods of communication, shopping, and banking. One significant change has been the increased use of digital payments, with more people across all generations embracing this technology.

Technology Adoption by Generation

While Millennials often lead the way in technology use, Gen X and Boomers are not far behind. According to a Pew Research Survey:

• 97% of U.S. Millennials own a smartphone
• 89% of Gen Xers own a smartphone
• 68% of Boomers own a smartphone

This trend indicates a growing acceptance and reliance on technology among older generations. For instance, in 2011, only 25% of Boomers had a smartphone, but by 2024, that number had surged to 68%.

Increased Trust in Digital Payments

A study on digital payments adoption by Early Warning Services, LLC, released in early 2019, showed that 50% of first-time Peer-to-Peer (P2P) Payment users are ages 45 and older. This reflects a growing trust in digital payment services, such as Zelle, especially among older adults. Given the increased need for contactless transactions during the pandemic, it is likely that this number has grown even further.

Why Are Older Generations Adopting Digital Payments?

Digital payments have become more appealing for several reasons:

• Trust in Financial Institutions: 52% of Generation X and 46% of Boomers said they “trust” P2P payments and are interested in using available solutions.
• Familiarity: 76% of Generation X and 74% of Boomers ranked “offered through a financial institution they use” as a top reason to trial P2P payments.

Benefits of P2P Payments

P2P payments offer numerous advantages over traditional payment methods:

• Checks: Can cause delays and are easily lost.
• Cash: Requires exact change and lacks a digital transaction record.
• Credit Cards: Convenient but can incur fees for both vendors and consumers.

In contrast, P2P payments are quick, easy, and secure, providing a seamless transaction experience.

The Transition to a Cashless Society

Digital wallets and mobile payments are becoming increasingly popular. The shift towards digital payments, accelerated by the pandemic, is likely to continue, driving demand for simple, instant P2P payment options from trusted sources.

For credit unions, keeping up with these trends is essential to remain competitive and meet member expectations.

How FLEX Can Help

FLEX has partnered with Zelle® to offer person-to-person payments directly within the FLEX mobile banking app. This integration provides a mobile-first payment platform that enhances the member experience, offering a fast, safe, and easy way to send and receive money with people and businesses they know and trust - typically within minutes.

To learn more about how your credit union can benefit from our Zelle integration, download our eGuide!