Cash App Could Make Gen Z the First Bankless Generation

Simon Tiffen
Strategist in Residence

While most Gen Zs (born between 1996 and 2015) have a bank account and a mobile banking app, it might just be because their parents do. More and more, they are moving away from traditional banking activities and are exploring fintech and branchless alternatives as a way to manage finances.

Until recently, consumer financial institutions have been largely immune to the disruption that taxis, travel agencies, hotels and restaurants experienced via online/mobile apps. However, people have grown increasingly dependent on mobile apps to do just about everything (especially in this pandemic year). It stands to reason that the Gen Z consumers under 24-years-old (who grew up in a fully digital world) are downloading and heavily using fintech apps such as Cash App, Venmo and PayPal or digital-only banking apps like Varo for when they need to send/receive money, purchase goods and services, and, increasingly, other financial tasks. It would be easy to explain this simply in terms of smartphone usage. It’s no secret that Gen Z spends a lot of time on their smartphones—with more than a third spending five+ hours on them every day. 

This shift among Gen Z consumers is important because Gen Z represents a hefty portion of the populace:


Since their economic weight will continue to grow as they graduate and find employment, they will be a segment to reckon with. 

Fintech is more than digital payments. 

Simply put, financial technology (fintech) is used to describe new technology that seeks to improve and automate the delivery and use of financial services to consumers. Depending on your point of view, this definition could encompass mobile banking and digital-only challenger banks such as Simple, Chime and Varo. 

Cash App comes of age

However, if we are looking at fintech as the major disrupter it has become within the Gen Z demographic, apps such as Cash App come to the fore. It was founded in 2013, is owned by Square and worth between $27 billion and $30 billion in enterprise value.One cornerstone of its appeal with Gen Z could be its popularity among rappers and hip-hop artists. The Wall Street Journal noted it’s easy to see how hip-hop influencers and their loyal followers grew Cash App’s monthly active users from seven million in 2017 to 30 million in 2020.

But beyond the power of influencers, the Gen Z attraction to Cash App is apparent. You don’t need a bank account for some services, and there is an optional free debit card unique to the user’s account but not connected to any personal bank account. It also offers instant discounts—Boosts—when you use their Cash Card (debit). And when it comes to cash flow, Cash App comes through with paychecks, tax refunds and other direct deposits available up to two days early.

Fintech vs traditional banking

According to a recent survey by NerdWallet and Harris Poll, adult members of Gen Z are participating in “traditional” retail banking activities to a lesser degree than their Gen Y predecessors. 

So, OK, we get it. Gen Zs are different when it comes to banking. To expand on that, the proliferation of fintech apps being downloaded, adopted and recommended can be tied to younger consumers wanting an all-mobile, flexible, low-cost, convenient and transparent experience that encapsulates their financial life. There’s also a substantial desire for a personalized experience. The most-wanted functionality includes, but is not limited to:

  • Digital payments/mobile wallets
  • Purchases of goods and services
  • Investing (Gen Z investors want convenience, security —and often— socially conscious choices)
  • Lending

Currently, not all banks are offering all of these services via mobile-only usage. For instance, you still often have to go to a branch to finish the entire process of opening a checking account, notarizing documents and typically, finishing a loan/mortgage process.

To sum it up, Jamie Warder, EVP, Head of Digital Banking at KeyBank, believes the entire banking industry faces the same two challenges. Warder describes these as, “1. Customers who want to bank, shop and pay differently than was the case only a few years ago; 2. Dealing with a growing mix of traditional and new competitors including fintechs who are constantly forcing us to innovate.”

What’s a bank marketer to do?

Well, we definitely see where things are going. This from SensorTower’s State of Fintech Apps:

While these data points are not specific to Gen Z, the appetite for access to financial technology can only grow as Gen Zs mature and make more money. But let’s not panic. What we have are immense opportunities to communicate the most salient aspects of traditional banking/mobile banking. UX will be increasingly important—new iterations of mobile apps and even the online version must surely consider what Gen Z likes about using those fintech apps that have risen to the fore on the list above. 

The sample represented in the charts below is drawn from a cross-section of banking customers. But given what we know about what Gen Z wants in terms of personalization and a sense of multi-functional financial control, there’s room to lean into many of the strengths banks already have. 

The bottom line is Gen Z certainly hasn’t walked completely away from traditional banks, especially mobile banking apps. The challenge for banks and their marketers will be in thinking more like fintech and delving into what specific features of fintech apps really appeal to Gen Z. With many bank branches continuing to experience intermittent closures due to COVID, now would be a good time to develop new products, refine UX and test, test, test. 

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Simon Tiffen
Strategist in Residence