No wallet, no problem: Why Gen Z and millennial Philadelphians are using their phones to pay for everything

Cash isn’t the only payment method that is going out of style among young consumers.

For some Gen Z and millennial Philadelphians, they prefer not to take out a credit or debit card — or even carry the piece of plastic

More often than not, they’re paying with their phone.

“I will always tap my phone before I pull anything out of my pocket,” said Jackson Beck, 26, of Fishtown.

“It’s really convenient,” said Dominique Mitchell, 33, of Northern Liberties. “I usually have my phone in my hand or right in my pocket.”

About 80% of Gen Zers — the oldest of whom turn 27 this year — use digital wallets, such as Apple Pay and Google Pay, as do about two-thirds of millennials — which the study defines as people in their late 20s to mid 30s — according to a recent survey by the financial research firm Pymnts Intelligence.

Across all generations, people who earned more than $50,000 a year were more likely to use the technology than those who made less, according to the study, and mobile payers spent more on average than those who used other methods, especially at retail stores and restaurants that accept digital wallets.

“Most stores, most coffee shops, most delis, most markets have it now,” said Beck, who works as a contract administrator. “I’m using it a lot more. It definitely gets a little dangerous, because I tap my Apple card as if Apple is paying for it.”

A decade ago, digital-wallet technology struggled to take hold among U.S. consumers who had no complaints about swiping their credit cards. In 2014, New York Times consumer technology writer Brian X. Chen referred to widespread everyday use of mobile wallets as “a tech entrepreneur’s dream.”

Then, coronavirus hit, and contactless payment became the method of choice for germ-wary consumers. People got used to tapping a credit card or paying with the phone that was already in their hand. In 2021, about half of consumers told Visa researchers that they avoided stores that didn’t offer contactless payments. In time, people became less concerned about touching surfaces like card readers, but their pandemic payment habits stuck.

“Right around COVID is when I tried to stop carrying my wallet altogether,” said Mitchell, who works in finance. “I didn’t want to have a lot on me.”

“Ninety percent of the time I don’t have my purse,” said Alyssa Kennedy, who recently moved from Graduate Hospital to Virginia. “It’s so much better. It’s less to lug around with you.”

“If I’m going out to a bar, I’m 34 now,” added Kennedy, who works in the insurance industry. “I don’t get carded as much.”

Several Gen Z and millennial consumers said they only carry a small wallet or a cardholder attached to their phone if they are driving or may get carded at a bar. Digital driver’s licenses are available in some states, including Delaware and Maryland, but not in Pennsylvania or New Jersey. Lawmakers in both states have introduced legislation that could change that, though it’s unclear whether digital IDs would be accepted at private businesses.

Most days, Mitchell said she only carries her ID and her phone. If she’s at Giant, Target, or Whole Foods, stores she frequents, she uses their apps, which allow her to gain loyalty points, make returns, and pay with the debit card information she already has saved on the platforms (a digital version of the rewards cards that use to hang off key chains). She avoids going to Walmart, she said, because it doesn’t accept Apple Pay, only Walmart Pay, their own payment app.

She hasn’t had an issue using digital wallets anywhere else, except for rare occasions when payment machines have been finicky, she said. “All the small corner stores, they even take mobile pay.”

As more consumers stopped carrying cards, let alone cash, some Philadelphia businesses also implemented new policies.

After being closed to fans for more than a year during the pandemic, Citizens Bank Park, Lincoln Financial Field, and the Wells Fargo Center reopened in 2021 as completely cashless venues. Earlier this month, the Fillmore Philly announced it was going cashless, too, and would only accept physical credit or debit cards, not mobile pay.

» READ MORE: Cashless businesses are banned in Philadelphia. How do concert and sport venues get around it?

In 2019, Philadelphia became the first major U.S. city to prohibit most retail stores from going cashless, However, there are exceptions, including for parking lots and garages, and venues, such as the stadiums and the Fillmore, that have reverse-ATM machines, which allow patrons to load cash onto a prepaid debit card.

Elsewhere, businesses that accept cash, cards, and mobile pay have noticed changes in consumer habits.

“People, generally skewing younger, are walking around without a wallet anymore,” said Jane Lipton, owner of Fat Lady Brewing in Manayunk. “Maybe some cash in their pocket.”

Only 6% of the brewery’s transactions last year were cash, said Ashley Wolf, the operations director, with the remaining 94% being credit, debit, or mobile (Fat Lady’s system doesn’t break out digital payments from those made with a physical card). If customers do have a few dollars in their pocket, they usually leave it as a tip and pay for their beers with a physical or digital card.

Brewery manager Louis Aguirre, 25, can relate: “I sometimes don’t even leave home with my wallet anymore.”

At Shibe Vintage Sports in Center City, Apple and Google Pay accounted for nearly 18% of transactions in 2023, the first year the shop’s payment system tracked the data, said co-owner Brian Michael. Anecdotally, he said digital wallets made up less than 5% of transactions pre-pandemic.

Since rolling out contactless payments on buses, subways, trolleys, and the high-speed line in late September, SEPTA has seen a week-over-week increase in riders who pay for their fare via a tap of their phone or credit card, said spokesperson Kelly Greene. The agency has recorded 3.3 million “taps” for trips to date, accounting for $4.8 million in sales, she said, and contactless payments accounted for about 8% of ridership as of earlier this week.

Still, about half of consumers of all ages don’t consider themselves digital wallet users, according to the Pymnts Intelligence survey, The November survey of 2,500 U.S. consumers found that older generations were less likely to reach for their phones to pay, with only about a quarter of consumers 60 and older reporting having done so.

“I usually pay with an actual plastic debit card,” said Patricia Kane Williams, 74, of Cherry Hill. “I see people tap their phone on the little doohickey that you have to touch. I don’t do that.”

At restaurants, the retired attorney prefers to pay in cash to avoid credit-card fees and keep her card information safe. She will pay with a card, she said, if she can see the transaction happening in front of her, but not if a server takes it out of her sight.

Williams — and nearly half of nonusers in the national survey — cite a similar reason for not using digital wallets.

“It’s just all on my phone, which doesn’t feel very secure,” Williams said.

Experts say digital wallets can be as safe as, if not safer than, using physical cards, though users should take precautions, such as not using them on an unreliable WiFi network and taking steps to protect their data if their phone is stolen.

Debra DeVries, a 63-year-old retired software developer, said she has only used Apple Pay once when she got to a store and realized she had forgotten her wallet.

“I’m not sure why it’s not my default, because it is certainly handy,” said DeVries, who recently moved from Collegeville to Tyrone, a small central Pennsylvania town where some stores don’t accept credit cards. “The wallet I think is more critical for me maybe as an older person … The medical cards are in my wallet.”

Edward Gracely, 69, carries a wallet containing cards, cash, and even checks.

He has never used Apple Pay or Google Pay, but has used PayPal linked to a credit card. The Drexel University professor said he remains wary of giving out his bank account information online, though he may cave soon in order to put some essential payments, such as utility bills, on auto pay. He currently pays bills by check or credit card.

Even avid digital-wallet users can’t convince some of their loved ones to adopt the technology.

Mitchell, the Northern Liberties resident who makes most of her purchases with her phone, said her boyfriend still pays with physical cards most of the time, and her parents wouldn’t even consider Apple Pay.

“If I’m with either one of my parents, they don’t use their phone at all,” she said. “They don’t trust that.”