Why is Gen Z choosing fintech platforms over traditional banks? With current spending power estimated at $450 billion, and projected to reach $12 trillion globally within five years, this generation is already influencing the future of banking. For card issuers, understanding what drives Gen Z is essential to staying relevant.
According to PYMNTS research, 54% of Gen Z primarily use non-traditional financial providers. If you’re a card issuer looking to improve Gen Z engagement or wondering how to future-proof your card programs, here are five strategic areas to focus on:
1. Design for Gen Z’s Financial Reality
Gen Z isn’t just younger, they’re financially different. Many manage gig work, freelance income, or irregular pay schedules. They expect products that help them:
- Track and manage spending in real time
- Build credit based on cash flow, not just credit scores
- Access flexible credit and budgeting tools
Fintechs are already offering these features. Issuers can remain competitive by delivering similarly adaptive debit and credit experiences.
2. Deliver Real-Time, Mobile-First Experiences
Speed and control are non-negotiable. Gen Z expects:
- Instant approvals and transaction alerts
- Fast access to wages and account updates
- Seamless digital interfaces across all devices
Slow processes or outdated UI can quickly lead to churn.
3. Build Trust Through Radical Transparency
This generation has little patience for hidden fees or vague decline reasons. They want:
- Clear, personalized messages when transactions are declined
- Transparent terms and conditions
- Honest communication that reflects their values and voice
Issuers who prioritize clear, user-friendly messaging stand to gain long-term loyalty.
4. Align Product Strategy with Social Values
Gen Z is more likely to choose brands that reflect their values. That includes:
- Environmental sustainability
- Social equity
- Ethical data practices
Issuers should consider how their products and communications signal purpose—not just profit.
5. Fix the Decline Experience with Smarter Tools
When Gen Z users face a card decline, it breaks the experience. Many will abandon the card, or even switch providers.
To reduce NSF declines and protect customer trust, card issuers can explore smarter collaboration models like Kipp. By enabling merchants to cover select transactions, issuers can approve more payments without increasing risk or passing fees to the cardholder—resulting in a smoother experience for Gen Z users.
What This Means for Card Issuers
Meeting Gen Z expectations is now core to long-term success for card issuers. These cardholders expect real-time access, simple and clear communication, and seamless transaction experiences. They are setting the standard for how financial products should work.
Issuers who evolve their product strategy, improve approval logic, and reduce declines will be better positioned to build loyalty and engagement with this influential generation.
Want to reduce NSF declines and improve the Gen Z cardholder experience? Talk to our team to learn how Kipp fits into your card program.
