Younger Generations Boost Adoption of Digital Wallets
Recent studies report a significant increase in the adoption of digital wallets among travelers, particularly among Gen Z. A study by TerraPay estimates that these wallets will account for approximately 27% of global payments by 2028.
According to Koert Grasveld, the Vice-President of Payments at TerraPay, “79 percent of Gen Z use digital wallets. They are the instant generation driving travel toward a mobile-first, real-time experience. With an attention span of merely eight seconds, Gen Z demands fast and seamless payment processes. Digital wallets meet this expectation, facilitating real-time payments that lower costs and broaden access.”
What’s fueling this trend?
Social media’s influence is paramount; it’s where Gen Z often plans their travels. Notably, around 40% of Gen Z travelers made bookings based on TikTok recommendations, with Instagram also being a major source of travel inspiration for 49% of the generation.
What are digital wallets?
Digital wallets are secure electronic applications that allow users to make contactless payments using smartphones, wearables, and more, reducing the need for cash or physical cards.
Why Get a Digital Wallet?
- Convenience: Quick payments without juggling cash or cards.
- Security: Advanced features to reduce the risk of fraud.
- Currency Exchange Made Easy: Handle it seamlessly, avoiding traditional exchange hassles.
- All-in-One Access: Store tickets, passes, and membership cards in one location.
- Contactless Payments: Enjoy hassle-free transactions in stores and restaurants.
- Budget Management: Tools to help track and manage spending effectively.
- Rewards: Access to exclusive discounts enhances the travel experience.
Resistance in Adoption
Despite the willingness of younger consumers to embrace digital payments, many smaller operators in the hospitality sector lag in technology adoption. Grasveld points out that “small property owners often face challenges with international transactions due to a lack of tools and the high costs tied to traditional banking. Slow transaction speeds and hidden fees further complicate their ability to compete globally.”
In efforts to integrate digital wallets, a January 2024 report from GuestService highlighted that platforms like PayPal equip hotels to accept secure payments instantly, enhancing customer convenience.
Grasveld is optimistic that continued digital wallet usage in the travel industry will accelerate adaptation among service providers, pledging, “With 97% of TerraPay transactions completed instantly, real-time payments are achievable for everyone.”
