European millennials and their relationship with payment systems

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The research

The financial services sector is in constant evolution, with payment systems among the areas subject to the most dynamic change. Technological advances have in fact had a significant impact on the increase in the means and tools that individuals, families and businesses can use to exchange money and to pay for goods and services.

“European millennials and their relationship with payment systems” is a study carried out by Reply to look at this phenomenon with a focus on millennials as the target audience, in view of their ease with technology, their openness to change and their willingness to embrace innovations more quickly and enthusiastically than other demographics.

The data collected from the study, which involved a survey of 3,000 millennials in the UK, Germany and Italy, allows us to assess current behaviours associated with this demographic, while also examining their expectations with regard to future trends.

The use cases examined include person-to-person transfers, in-store and online purchases, the adoption of new payment tools and methods and possible changes to be seen over the coming years, for a complete view of the phenomena involved.


A more conservative approach emerges, compared to what might have been expected, especially taking into account the young / digital target, both in terms of current use, as well as propensity for the near future:

  • Cash will continue to play an important role in most use cases analysed
  • Despite the Millennials’ openness towards players such as Google, Amazon, Apple, PayPal, etc., banks are still the key player from which new payment services are expected
  • The use of smartphones does not appear to be as significant as might have been expected, as a rationale for choosing a possible alternative tool to traditional ones

Research results

The research conducted by Reply has revealed the following main findings about millennials and their relationship with payment systems.
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    Amongst all the tools availables, Paypal is a mass payment tool

    Paypal is available to a percentage of millennials comparable to the most widely used tool: the traditional current bank account. The pervasive use of PayPal, available to 77% of the sample, is somewhat surprising, proving that it has in fact become a “mass” payment tool.

  • P2P transfers are diversified, characterised by low amounts and often in cash form

    P2P transfers, when considered individually, do not represent a frequent occasion for the use of payment tools, although as a whole they reach a share of approximately 9 transactions per month per person. The amounts exchanged are low and the preferred tool is cash.

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    In-store purchases are frequent, specific and paid with cash or cards

    As a whole, in-store purchases are found to be a very frequent payment opportunity, as every Millennial carries out an average of 25 transactions per month. Cash and payment cards are the main tools in this case.

  • Online purchases are frequent, diversified and paid using traditional payment tools

    An average of 160 online purchases are made per person per year, with a variety of use cases. Payment cards are the most commonly used tool, with cash still playing an important role.

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    Amongst all the new payment tools, Paypal is the most popular and smartphones are used for small purchase amounts

    Paypal is the most well known innovative tool and 95% of millennials consider it useful. On the other hand, limited enthusiasm is noted for the use of smartphones as a payment tool, chosen primarily for small amounts.

  • Innovations by banks and the decline in the use of cash are the future trends

    Millennials expect new payment tools to be offered by the banks. More than 50% of the sample expects a decline in the use of cash, with a corresponding increase in the use of payment cards and Paypal. Security is the most crucial factor in choosing a new payment tool, followed by simplicity, affordability, spending controllability and, to a lesser extent, universal usability.