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Winning Millennial and Gen Z Loyalty: A Strategy for Debit Growth

Author Svetla Pavlova
Key Takeaways
  • Younger consumers value debit but nearly half are willing to switch providers due to a lack of trust, security, or rewards.
  • What they value in these areas is more about the customer experience than a specific incident.
  • Issuers are already focused on enhancing debit capabilities but may want to consider expanding those plans to win the loyalty of this group.

Young Millennials and Generation Z present a significant opportunity for debit issuers to grow volume and improve debit-program performance. Consumers in this segment already embrace debit but are willing to add or switch providers. Learn which features these cardholders value and how those capabilities align with enhancements issuers are currently prioritizing.

Younger consumers expect to be valued

A recent PULSE webinar highlighted the results of a West Monroe survey of 500 older Gen Z and Millennial consumers, ages 25-39. The survey sought to understand debit use, loyalty, and interest in features among this age group.

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More than half (55%) of this group have more than one debit card, said Sofia Rojo del Busto, Senior Manager of Market Research and Insights for West Monroe. Nearly two-third (62%) have a bank-issued card, and 48% use fintech apps. They choose debit for smaller purchases but could be persuaded to expand use to other categories.

The features that can entice many in this group to switch card issuers are shown below.

Pie charts show that 48% of younger consumers would switch debit providers for improved security, 46% for debit rewards, and 39 to 44% for in-app person-to-person payments, Buy Now Pay Later capability, and spending insights/personalized guidance.

Experiences they cited most often as likely to cause them to switch include:

  • A breakdown in trust – Respondents cited unexpected or “unfair” fees such as overdraft fees, as well as the service experience when they contact the issuer about such fees.
  • Security concerns – Rojo del Busto noted that it is not the event itself that erodes loyalty but how the issuer responds to it. These users expect clear communication and a quick resolution.
  • Absence of rewards – Younger consumers want to feel like their provider values their business.

Rojo del Busto stressed that this group does not expect debit rewards to be on par with credit rewards. ”Even a modest reward can help people feel recognized and valued,” she said. “A small token plays a strong role in retention.”

Issuers are working to enhance capabilities

The 2026 PULSE Debit Issuer Study revealed that issuers are seeking to enhance their competitiveness by investing in each step of the value chain:

  • Issuance – Instant issuance, personalized card design, and card delivery tracker are high on issuers' roadmaps.
  • Digital wallets – Issuers are seeking to improve provisioning and digital issuance (push provisioning).
  • Disputes – Many issuers are adding self-service tools to initiate and track disputes. Those who have enabled this capability noted, however, that greater convenience can increase dispute volumes, more than offsetting any cost savings realized.

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Comparing the results of the consumer and issuer surveys reveals that, while issuers are investing in a number of enhanced capabilities, they may need to revise their plans to better attract younger consumers.

Many of the capabilities mentioned by younger consumers are already offered by most issuers:

  • 94% of issuers surveyed offer card freeze/unfreeze capability
  • 88% offer custom alerts
  • 57% allow cardholders to block certain transactions

In contrast, 18% of issuers currently offer debit rewards, though another 20% reported they were planning to add them this year. Covered issuers are more likely to offer merchant-funded rewards, while exempt issuers have more diverse programs. Fewer covered issuers are planning to add the benefit this year.

The survey did not ask issuers about their plans to add person-to-person payment tools, Buy Now Pay Later capabilities, or personalized insights and guidance. These are features younger debit users would like to access via their debit provider’s app rather than having to switch to a different app.

Institutions that aren’t ready to add these new capabilities can still benefit from targeting younger consumers. Rojo del Busto recommended that issuers focus on increasing debit use in certain spending areas with this group:

  • Defend debit use for everyday expenses and spending (groceries, restaurants, fitness, personal care).
  • Compete for discretionary spending in areas where credit is sometimes chosen (online shopping, entertainment, bill payment).
  • Concede areas where credit has a clear advantage (travel expenses, electronics/tech).

For more information on the survey of older Gen Z and Millennial debit users, replay the West Monroe webinar. To delve deeper into the 2026 Debit Issuer Study, download our report.