PULSE Perspective - November 2021

Gen Z’s Future Payment Preferences
The Financial Times, August 2021

The Financial Times reports on the Logica Future of Money Study exploring how older Gen Zers (16-24 years old) will pay for purchases in the future. Just 22% say they will pay with cash at the point-of-sale (POS) in the future. Meanwhile, POS debit usage is expected to decline from 35% to 26%, and credit card usage from 16% to 14%. Picking up share will be payment apps, expected to rise from 5% to 19% of in-person payments.

PULSE Perspective: While changes over time are inevitable, we expect consumers will continue to turn to different forms of payment for different purposes. Debit has a bright future in this mix.

Overdraft Fees Bounce Back
Banking Dive, August 2021

According to S&P Global Market Intelligence, overdraft fees are on the rebound, jumping nearly 40% in 2021’s second quarter from the same period in 2020. Banking Dive reports that total is still 33% lower than 2019’s second quarter. The banking industry saw a dip of around 50% in overdraft fees during the first half of 2020 as consumers clamped down on spending.

PULSE Perspective: Recognizing that consumers detest overdraft fees, some banks, such as TD Bank, are offering accounts that don't allow customers to overdraft. Frost Bank introduced a feature allowing customers to overdraw their checking accounts on transactions up to $100 without penalty.

Get Ready for Central Bank Digital Currencies
CNN Business, August 2021

CNN Business reports 81 countries – including the U.S. – are exploring Central Bank Digital Currencies (CBDCs), and five countries have already launched one. That comes from think tank Atlantic Council, which says China's digital yuan is leading the race, having already been trialed in transactions totaling over $5 billion. Some are calling on the U.S. to be more proactive or risk missing an opportunity to shape the future of digital money.

PULSE Perspective: A big challenge for cryptocurrency is its volatility, which is why the stability promised CBDC may be a game changer. This is another example of how digital and crypto currencies are aligning more with traditional currencies.