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Cash and the Next Generation: Why Gen Z Consumers Still Value Physical Money
Global Banking and Finance Review
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by Helena Müller, VP Banking Europe, Diebold Nixdorf
by Helena Müller, VP Banking Europe, Diebold Nixdorf
Have you ever heard of the Lindy effect? This theory suggests that the longer something has been around, the longer its remaining life expectancy. In other words, if a technology or idea has survived for decades, or even centuries, it is more likely to persist well into the future. Cash is a perfect example of this phenomenon. Introduced over 3,000 years ago[1], physical currency remains not only relevant but surprisingly essential in our increasingly digital world. And contrary to the popular narrative that digital natives are abandoning cash, younger generations in Europe are showing that the future of payments is a blend of physical and digital solutions, where freedom of choice is paramount.
Access to cash is still a deal-breaker for most Europeans, regardless of their demographic. A recent YouGov study commissioned by Diebold Nixdorf found that between 70 and 90% of consumers would not open an account with a bank that doesn’t provide easy access to cash withdrawals. This challenges the assumption that modern banking can be exclusively digital. Despite the soaring popularity of contactless payments, mobile wallets, and instant transfers, the ability to withdraw physical money remains a core banking expectation, even among young people.
While cash is stereotypically regarded as just a habit of older people, consumer research shows that Gen Z individuals are increasingly embracing physical money. In Ireland, for example, young adults aged 18-24 are the heaviest users of cash, with 35% reporting that they use it daily[2].
This affinity for cash can be explained by several factors, including security concerns and budgeting needs.
Tech-savvy and digitally native, Gen Zers and Millennials are all too familiar with data breaches and cybersecurity threats. They worry about data privacy in electronic payments and view cash as a safer alternative. Unsurprisingly, anonymity was cited as the biggest advantage of cash by younger Germans (aged 18-39) who participated in a recent YouGov survey commissioned by Diebold Nixdorf.
Cash is also well known as an antidote to overspending. Its physical nature helps visualize limits and build greater financial awareness. In recent years, a budgeting trend known as “cash stuffing” has gained popularity on social media, with Gen Z influencers demonstrating how to allocate money to envelopes for specific purposes, such as holidays, eating out, or car-related expenses.
This hands-on, visual approach to money management isn’t limited to adults. For generations, parents and educators have relied on physical money to teach children the fundamentals of spending, saving and budgeting. This trend continues today with Generation Alpha, comprising children born between the early 2010s and the mid-2020s. Using coins and banknotes helps the youngest members of society connect with the value of money in a way that digital transactions can’t replicate. In fact, 73% of Swiss parents consider cash to be the most suitable means of payment for children to develop financial literacy and learn how to handle money, because it is tangible, valuable, and limited[3].
Cash is also the most accessible and inclusive payment method because it doesn’t require smartphones, internet access or digital literacy. This matters to young people, who tend to advocate for greater social equity. Research conducted by NielsenIQ on behalf of Diebold Nixdorf indicates that banks' diversity and inclusion efforts, as well as their commitment to environmental, social, and governance principles, translate into revenue advantages and higher customer loyalty, particularly among Millennials and Gen Zers.
The revival of cash among younger generations also carries an element of nostalgia. The majority of Millennials and Gen Zers report feeling digitally fatigued[4] and turn to analog hobbies such as knitting and film photography to take a break from their screens. Similarly, the tactile experience of cash offers a welcome respite from tech overload.
Younger Europeans are not rejecting electronic payment methods; rather, they are seeking freedom of choice, and cash continues to play an active role in this. Ultimately, consumer satisfaction isn’t about choosing between cash and digital payments; it's about having both options available. The best customer experience offers flexibility, allowing people to choose the right payment method for each situation.
[1]How has money changed over time? | Bank of England
[3]Learning to manage money | PostFinance
[4]Gen Zs favour social media ban for under 16s as digital fatigue hits | Deloitte UK
Helena Müller, VP Banking Europe, Diebold Nixdorf
Cash management refers to the process of collecting, managing, and investing cash to optimize liquidity and ensure that a business can meet its financial obligations.
Financial literacy is the ability to understand and effectively use various financial skills, including personal finance, budgeting, and investing.
A mobile wallet is a digital application that allows users to store payment information and make transactions using their smartphones.
Budgeting is the process of creating a plan to manage income and expenses, helping individuals or organizations allocate resources effectively.
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