- Teens and millennials increasingly using payment apps to send money
- Cash or card still preferred for merchant payments and purchases
Apps are the new preferred method of payment for many teens and millennials, who are forgoing traditional cash transactions to exchange money with friends, pay rent or do business with private contractors.
Some of the most popular instant payment apps include PayPal's Venmo, Cash App from Square, and payment features linked to social networks like Snapchat or Facebook. Many smartphones also have built-in payment apps, like SamsungPay and ApplePay, that millennials can use to send money. These apps connect to a checking account or credit card and can be used to exchange funds as easily as texting.
Fees for these payment app transactions can vary.
Square's Cash App, for example, doesn't charge for person-to-person payments or standard deposits that post in one to three business days, but users pay 2.75% on business transactions and up to 1.5% on instant transfers. Venmo payments are free when users send from a linked bank account, prepaid cash card or debit card, but a 3% fee is charged on credit card transactions.
Zelle, on the other hand, is backed by some of the biggest traditional banks in the US and offers money transfers with no additional fees and free instant payments.
For many younger users of these payment apps, the variation in cost doesn't seem to be a particular concern and most are willing to pay a little extra for the convenience of sending money from anywhere in just a few quick clicks and swipes on a smartphone screen.
While traditional cash and card purchases are still preferred by millennials for things like Netflix and grocery shopping, many landlords and other private service providers are now accepting app payments, especially from students.
